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 (up to $250,000.) is insured by the National Credit Union Administration, and you will earn a guaranteed interest rate on your money.

ALL RATES & TERMS ARE SUBJECT TO CHANGE AT ANY TIME.

Are your credit card rates too high? Check out our debt consolidation program! Our knowledgable staff will work with you to find the best rate.

Regular CDs and IRA CDs (Be sure to check out the rate bonus chart below)

Months Minimum Deposit Dividend Rate APY
6 $3,000 1.35% 1.36%
12 $3,000 1.65% 1.66%
12 10,000 2.25% 2.27%

CD Rate Bonuses

Bonus CriteriaBonus 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.

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?

  1. Choose an IRA CD from our available selection.
  2. Deposit any amount greater than the minimum deposit, but less than your annual contribution limit. Also, note that your contribution may be tax-deferred.
  3. During the term of the CD, your money earns interest at the guaranteed rate. These earnings are tax-deferred until you withdraw them.
  4. 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.
  5. 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

2009 IRA Contribution and Deduction Limits
 

2009 Combined Traditional and Roth IRA Contribution Limits:

If you are under 50 years of age at the end of 2009: The maximum contribution that can be made to a traditional or Roth IRA is the smaller of $5,000 or the amount of your taxable compensation for 2009. This limit can be split between a traditional IRA and a Roth IRA but the combined limit is $5,000.The maximum deductible contribution to a traditional IRA and the maximum contribution to a Roth IRA may be reduced depending on your modified adjusted gross income.

If you are 50 years of age or older before 2010: The maximum contribution that can be made to a traditional or Roth IRA is the smaller of $6,000 or the amount of your taxable compensation for 2009. This limit can be split between a traditional IRA and a Roth IRA but the combined limit is $6,000. The maximum deductible contribution to a traditional IRA and the maximum contribution to a Roth IRA may be reduced depending on your modified adjusted gross income.

 

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 of a Certificate of Deposit if you have not yet begun taking retirement distributions.