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Certificates of Deposit (CD) and Individual Retirement Accounts

Certificate of Deposit (CD)

Certificates of Deposit (CDs) allow you to lock in a fixed rate of interest for a specific period of time (term). You are not permitted access to your funds until the maturity date.

  • Only $1,000 minimum to open
  • Lock in a fixed interest rate with terms from 90 days to 5 years
  • Interest can be compounded quarterly and added back to the CD or interest can be paid monthly or quarterly by check or automatic deposit into other Preferred Bank accounts
  • Substantial penalty for early withdrawal of principal prior to maturity

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Traditional Individual Retirement Account CD

An Individual Retirement Account (IRA) Certificate of Deposit is an IRA in which your retirement savings are deposited.   It allows tax deductible contributions in some instances.  CDs allow you to lock in a fixed rate of interest for a specific period of time.

  • Individuals who have earned compensation (wages, salaries, and taxable alimony) and are younger than age 70 ½ for the entire tax year are eligible to open and contribute to a Traditional IRA
  • All earnings on IRA contributions remain tax deferred until withdrawn

Changing jobs? Moving? Consolidating several IRA’s into one account? Looking for better service, greater safety or convenience? Then an IRA Rollover or Transfer may be the answer.

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Roth Individual Retirement Account CD

A Roth Individual Retirement Account (IRA) Certificate of Deposit is an IRA in which your retirement savings are deposited.  It allows nondeductible contributions, and features tax-free withdrawals for certain distribution reasons after a five-year holding period.   CDs allow you to lock in a fixed rate of interest for a specific period of time.

  • Individuals who have earned compensation (wages, salaries, and taxable alimony) and have a modified adjusted gross income (MAGI) at or below certain prescribed limits for the tax year are eligible to open and contribute to a Roth IRA
  • Assets held in a Roth IRA are not subject to age 70 ½ required minimum distributions.   This is a definite advantage of the Roth IRA over the Traditional IRA

Changing jobs? Moving? Consolidating several Roth IRA’s into one account? Looking for better service, greater safety or convenience? Then a Roth IRA Rollover or Transfer may be the answer.

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SEP (Simplified Employee Pension) Plan

The Simplified employee pension plan allows an employer to make contributions towards an employee’s retirement, without becoming involved in more complex retirement plans.   The contributions are made to SEP (Traditional) IRA’s of the qualifying employees in the plan.  

  • Contributions must be made in an amount that is the same percentage of total compensation for each and every employee
  • Contributions are 100% vested
  • Contributions must be made by tax due date plus extensions
  • Contributions must be made for those over age 70 ½
  • The employer receives a tax deduction for the contributions up to a certain prescribed limit
  • All earnings on contributions remain tax deferred until withdrawn

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For all plans we recommend you, Consult you tax advisor.