Savannah Schools FCU offers a share savings IRA that pays the same quarterly interest rate as share savings accounts. 90 days up to five years certificates are also available. A minimum of $1,000.00 is required to set up an IRA share certificate.
Individual retirement accounts are a smart way to save for the future. A traditional IRA can be opened and funded without any employer participation. Contributions and/or earnings are tax-deferred until retirement. Unlike many employer plans, money in the account is always accessible; however, until age 59 1/2 there is a 10 percent early distribution penalty. Some exceptions do apply, check with your tax advisor for more information.
Roth IRAs differ from Traditional IRAs in that the money you contribute to a Roth IRA has already been taxed. So the principal amount is never subject to taxes or penalties in the future, as long as you stay within the contribution guidelines. This retirement plan allows the money you contribute to grow tax-deferred.
If you do not withdraw any of the earnings until you have had the plan for at least five years, or satisfy one of the qualifying events, those tax-deferred earnings become tax-free. Unlike the traditional IRA, there is no 70 1/2 age limit on making contributions.
Coverdell Education Savings Account
Coverdell Education savings account can be used to fund a child's education. An educational IRA can be opened for any child under the age of 18. The child is the account beneficiary. Like the Roth IRA, contributions to the account are not tax deductible but earnings accumulate tax free. Withdrawals from Educational IRAs can be used to pay for tuition, books, supplies and room and board (for fulltime students).
If a child does not attend college, the money must be withdrawn by the time he or she turns 30. Those earnings are subject to income tax and the 10% penalty. The Coverdell Education savings account can also be rolled over without penalty to another member of the family.
For more information on IRAs please contact the Member Services Department at the nearest branch office.