Control your financial flexibility in retirement
It’s never too late or early to start saving for retirement, and Embassy National Bank can help. Our retirement specialists will conduct a risk analysis and help you choose the best financial solution for your lifestyle. Continue reading to learn more about some of our most popular retirement savings accounts.
Certificates of Deposit
Certificates of Deposit or CDs are standard bank products that pay a stated yield or interest rate for a specified term. CDs typically pay a higher interest rate than a standard savings account because you give up the use of your funds for a specific period. Since CDs are backed by the Federal Deposit Insurance Corporation (FDIC) for up to $250,000, they are very low risk products.
When you open a CD, you can select your maturity date to match your needs. For instance, if you are planning a trip in two years, you can invest in a 24-month CD. The most common term lengths for CDs can be anywhere between 90 days and five years. Generally speaking, the longer the term of your CD, the higher the interest rate you will earn.
IRA Certificates of Deposit
Individual Retirement Accounts (IRA) CDs are certificates of deposit owned as either a Roth IRA or a Traditional IRA. They work like any other CD to guarantee the growth of your funds in the IRA. Regardless of the term of your IRA CD, your money will grow tax-deferred and be insured by the FDIC.
Traditional IRA CD
With a Traditional IRA, your contributions may be tax-deductible the year you make them. This type of IRA allows your money to grow tax-free until you start taking distributions. When you begin taking distributions, you may be required to pay taxes on your earnings and contributions. Anyone who is under the age of 70 ½ may be eligible to invest in a Traditional IRA CD.
Roth IRA CD
With a Roth IRA CD, your distributions are typically tax-free, but your contributions are not tax-deductible. Anyone who earns income may be eligible to invest in a Roth IRA CD. This retirement option doesn’t have age restrictions because all contributions are based on after-tax money. Whether you participate in a 401(k) plan will not be a determining factor in your contribution amounts.
Contact an Embassy Retirement Specialist Today
The retirement solutions at Embassy National Bank are ideal for investors at or near retirement. These retirement options allow you to take a more conservative approach to building your nest egg. Traditional CDs and IRA CDs are low-risk investments that pay interest as long as your funds stay in the CD. Both of these products should be used as a long term investment strategy due to penalties if you withdraw before the CD matures.