Individual Retirement Accounts (IRAs)
Supplement your retirement plan with a safe, secure investment that won't be impacted by financial market fluctuations. With our IRA CDs, your principal is insured by the National Credit Union Administration, and you will earn a guaranteed interest rate on your money.
You can save money by
consolidating your debt with us!
Regular CDs and IRA CDs (Be sure to check out the rate bonus chart below)
| Months | Minimum Deposit | Dividend Rate | APY |
|---|---|---|---|
| 6 | $3,000 | 3.50% | 3.56% |
| 12 | $3,000 | 3.75% | 3.82% |
| 12 | 10,000 | 4.00% | 4.07% |
CD Rate Bonuses
| Bonus Criteria | Bonus Amount |
|---|---|
| Platinum Membership (see Tiered Services) | 0.25% |
| Gold Membership (see Tiered Services) | 0.125% |
Also, see our Regular (non-IRA) CDs.
What is an IRA?
An IRA (Individual Retirement Account) is an account designed to help you save money for your retirement. IRAs offer tax benefits that you don't receive with other savings programs.
Is my money safe in an IRA?
Your total funds held in Hometown IRAs is guaranteed up to $250,000.
As of April 1, 2006, your shares in covered retirement accounts at our federally insured credit union are combined and insured to a maximum of $250,000. This increase applies to NCUA insured retirement deposits only. Investments such as mutual funds, stocks, bonds, etc. are not guaranteed and may lose value. Shares held in other savings categories you have at the credit union are still insured to $100,000 separately from your retirement accounts.
What type of IRAs do we offer?
We offer Traditional IRAs in the form of IRA CDs. IRA CDs are a stable and secure investment that won't be affected by financial market fluctuations. They offer guaranteed interest rates, and your money is insured by the National Credit Union Administration.
What is a CD?
A Certificate of Deposit (CD) is a form of investment in which you agree to deposit money into an account for a specific period of time in exchange for a higher interest rate.
CDs are defined by the following criteria:
- Term - Length of time that you agree to leave your money on deposit.
- Minimum Deposit - The minimum amount of money you must deposit to open the CD.
- Interest Rate - The rate at which your funds will earn interest.
How does an IRA CD work?
- Choose an IRA CD from our available selection.
- Deposit any amount greater than the minimum deposit, but less than your annual contribution limit. Also, note that your contribution may be tax-deductible.
- During the term of the CD, your money earns interest at the guaranteed rate. These earnings are tax-deferred until you withdraw them.
- At the end of the term, you must roll your money in a new IRA CD or other qualified retirement account. This will continue until you reach retirement.
- You may begin taking retirement distributions any time after age 59½, and you must take at least the minimum distribution when you reach age 70½. Withdrawals prior to age 59½ will be subject to early withdrawal penalties.
Annual Contribution Limit
For 2006, you can contribute up to the lesser of $4,000 or 100% of your annual earnings. A non-working spouse may also contribute up to $3,000, if your joint income equals or exceeds the amount you both contribute. Additional "catch-up" contributions are available to those over 50 years of age.
Tax-Deductible Contributions
Your contributions may be tax deductible. However, the deductibility of your annual contribution depends on whether you and your spouse are covered by a retirement plan at work, and your adjusted gross income. Please consult your tax advisor.
Minimum Distribution
You are required by law to begin taking distributions from your IRA in the year you reach age 70½. The amount of the distribution is based on your age and the value of your account. Internal Revenue Service Publication 590 provides the information to calculate the minimum distribution.
Early Withdrawal Penalties
An early withdrawal is generally one taken before age 59½. In addition to taxes on the amount added to your income, the IRS may assess an additional 10% penalty. You should consult with your tax advisor regarding the tax consequences.
The Credit Union may apply additional early withdrawal penalties, including a penalty of 90 days' interest on withdrawals taken before the end of the term if you have not yet begun taking retirement distributions.
