IRAs: A Crash Course
Learn about the tax advantages of the different IRA options
Looking for an ideal account to hold retirement savings funds? IRA options provide great flexibility and a secure place for your savings.
An Individual Retirement Account (IRA) is a tax-advantaged investment account designed to help individuals save for retirement. There are different types of IRAs, including Traditional and Roth IRAs, which have varying tax benefits. The minimum opening balance for an IRA is $50.
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Traditional vs Roth IRAs
Contributions to a Traditional IRA are tax-deductible in the year they are made, reducing your taxable income for that year. Withdrawals in retirement are taxed as ordinary income. There are rules established by the IRS related to the required minimum distributions (RMDs), which must begin at age 73.
Roth IRA
Unlike Traditional IRAs, Contributions to a Roth IRA are made with after-tax dollars, meaning you don’t get a tax deduction upfront. Qualified withdrawals (including earnings) in retirement are tax-free however. Roth IRAs also do not have required minimum distributions (RMDs), allowing for more flexibility in managing retirement income.
IRA CDs
IRA CDs are also available with a minimum opening balance of $500.00, and available terms are 12 to 60 months.
The benefits of an insured investment account: NCUA & ESI Insurance
ECU member accounts are insured by NCUA and ESI. Federal deposit insurance provided by the NCUA for members: $250,000 for each depositor and per account.
ECU also provides Excess Share Insurance (ESI), at no cost to you the member. ESI matches what NCUA insures.
What does this mean? This means you can feel confident that your funds on deposit at ECU are insured at a minimum of $500,000 per depositor and per account.