IRA or Share Certificate Account
A Share Certificate is a time-deposit account in which the funds are held for a specific term at a dividend rate that will not change during that term. A minimum deposit of $1,000.00 is required.
- An IRA or Share Certificate earns higher dividends than a Share Savings Account or Special Savings Account.
- After the account is opened, additional deposits cannot be made until the date of maturity.
- Upon maturity, all Share Certificates automatically renew for the same term, but at the current dividend rate. There is a seven-day grace period, beginning with the date of maturity, in which changes may be made to the account. Any changes made after the seven-day grace period expires will be subject to early withdrawal penalties (please refer to Fee Schedule).
- Dividends are compounded daily and paid quarterly to Share Certificates.
- Early withdrawal penalties may be imposed (please refer to Important Account Information: Disclosures & Notices).
An IRA Certificate may be set up as either a Traditional or Roth retirement account. All IRA Certificates have specific guidelines from the IRS about when and how withdrawals can be made.
Certificate Laddering in a Rising-Rate Environment
Laddering occurs when a series of certificates are opened and set to mature at regular intervals, like every 12 months. For example, five $1,000 certificates are opened with terms of 12, 24, 36, 48, and 60 months. As each certificate matures, you may reinvest the proceeds into a new 60-month certificate, with the highest interest rate. Typically, the longer the term, the higher the rate. So, this process may be continued over and over as each certificate matures, which in this example is every 12 months. Note that this only works in a rising-rate environment. But, if interest rates should fall, you can still enjoy the benefits of those higher interest rates until all your certificates mature.
IRA Accumulator Account
An IRA Accumulator Account is designed for members who wish to make frequent contributions to their retirement account. Unlike an IRA Certificate, deposits may be made at any time.
- An IRA Accumulator Account earns higher dividends than a Share Savings Account or Special Savings Account.
- This account may be set up as either a Traditional or Roth retirement account.
- Effective January 1, 2020, there is no age limit for Traditional IRA contributions, as long as you have an earned income that exceeds the contribution amount. However, contributions for 2019 cannot be made; only for 2020 and beyond.
- Dividends are posted quarterly with a minimum average daily balance of $1,000.00.
All IRA Accumulator Accounts have specific guidelines from the IRS about when and how withdrawals can be made.