Confidently Saving for Your Future
Saving for the future can be difficult (and stressful at times), especially with the fluctuations in the market causing concern over what will happen to your hard-earned money when setting it aside for the long haul. But with returns guaranteed by the FDIC, a Certificate of Deposit (CD) or Individual Retirement Account (IRA) from Bank Michigan help take the stress out of saving and offer certainty in your financial efforts.
For a CD, you select the amount of time you wish to deposit the money, and the longer the term, the higher the rate. Below are additional details.
Certificates of Deposit (CD)
- Minimum opening balance of $1,000
- Tiered rates compounded and credited quarterly
- Terms ranging from 12 to 60 months
- A penalty may be imposed for the early withdrawal of funds
Visit a Location Nearest You
Individual Retirement Accounts
Similar to a Certificate of Deposit, an IRA provides the additional benefit of tax advantages as long as you qualify under current IRS guidelines when it comes to your income and the amount you wish to deposit.
- Minimum opening balance of $1,000
- Tiered rates compounded and credited quarterly
- Terms ranging from 12 to 60 months
- A penalty may be imposed for the early withdrawal of funds
- Subject to IRS retirement account rules for qualification and contribution amounts
Traditional IRA
Contribute pre- or after-tax dollars into a Traditional IRA and your contributions may end up being tax-deductible depending on your situation. This helps provide an immediate tax benefit and rewards you for setting money aside for retirement.
With a Traditional IRA, your money can grow tax-deferred. However, you will have to pay ordinary income tax on your withdrawals when you take the money out. Additionally, under IRS rules, you must start taking distributions after age 73. But unlike a Roth IRA (see below), there are no income limitations to opening a Traditional IRA, which makes it a good option for those who expect to be in the same or lower tax bracket when they need the money later on.
Roth IRA
A Roth IRA allows you to contribute after-tax dollars and allow them to grow tax-free. You can then withdraw them tax-free (and penalty-free) after age 59½ and you've met the term required of the account.
A Roth IRA is typically a good option if you expect to end up in a higher tax bracket down the road, making your tax-free withdrawals an attractive option. There are income limitations to opening a Roth IRA, however. So, it's important to note that not everyone will be eligible for this type of retirement account.
Visit a Location Nearest You Roth vs. Traditional IRA