CDs & IRAs
The Commercial Bank offers CDs, Traditional IRAs and Roth IRAs.
- Certificate of Deposit (CD) - A certificate of deposit is a time deposit that is similar to a savings account in the sense that it is risk-free and insured by the FDIC. It has a specific, fixed-term and a fixed interest rate, and is intended to be held until maturity, at which time the money can be withdrawn with the accrued interest. There may be a penalty for early withdrawal.
- Traditional IRAs- Available to everyone with
reportable income. The contributions may be tax deductible. Funds can be used to purchase a variety of investments. Withdrawals may begin at age 59 ½ and are mandatory by 70 ½. Taxes are paid when withdrawn from the IRA. The funds withdrawn (including principle contributions) before 59 ½ are subject to 10% penalty (subject to exception).
- Roth IRAs- Available only to single-filers making
up to $118,000 or married couples making a combined maximum of $186,000
annually. Contributions are not tax deductable. All earnings are
100% tax free if rules and regulations are followed. Principle contributions can be withdrawn
when the owner turns 59 ½ and the account has been open for 5 years
without penalty. There is no mandatory distribution age.