For years, CDs have been popular with savers looking for more predictability for their funds. CDs are the easiest way to save if you don’t need immediate access to your money. They usually pay you a higher interest rate than a traditional savings or money market account and, generally, the longer the term that you invest for, the higher the interest rate.
An IRA is a popular retirement plan that provides tax-advantaged savings for retirement. It can be used as an effective way to supplement other long-term savings vehicles. While your money is in an IRA, you don’t pay any current income tax on the interest, dividends or capital gains earned. This means that your savings can compound more quickly than in a taxable account.
IRA Comparison
There are two types of IRAs available for your annual contributions:
- Traditional IRA – A tax-deferred personal savings plan that allows income earners to make annual contributions, which may be tax-deductible.
- Roth IRA – A personal savings plan that allows qualified investors to make non-deductible annual contributions with after tax dollars and to withdraw principal and earnings tax-free under certain conditions.
The Bank of Wedowee offers terms from 6 months to 5 years for CD’s and IRA’s with a minimum deposit of $1,000.
Penalty for early withdrawal:
- 1% of amount withdrawn, subject to a minimum of seven days’ interest.