Welcome to Stroud National Bank - Saturday, December 20, 2014

Personal CDs & IRAs

Certificates of Deposits (CDs) and Individual Retirement Accounts (IRAs)

Certificates of Deposit

If you are looking for a safe and secure way to earn a higher rate of interest than a savings account, our CDs are for you! Terms are convenient and flexible for your saving needs with maturity dates available from 91 days to 5 years with opening deposits as little as $1,000.

Features

  • Competitive interest rates for a specified term
  • Maturity dates from 91 days to 5 years
  • Interest may be paid at maturity, or compounded monthly, quarterly, semiannually, or annually
  • CDs may be automatically renewed
  • Early withdrawal penalties may apply
  • CDs with maturities of two years or longer may “bump” their interest rate one time during the term of the CD. So if interest rates go up, your earnings can too.
  • FDIC Insured

The SNB CD Ladder

Want to receive higher interest rates than other savings methods, have faster access to your funds, and keep your principal secure? Consider putting some of your money in a ladder of CDs from SNB.

To build a ladder, divide your money between CDs of staggered maturities - say, four CDs with maturities ranging from one to four years. Each CD earns a different rate; the longer the maturity, the higher the rate. You maintain the ladder by reinvesting. When a one year CD matures, for example, you buy a new four year CD. You’ll have a CD mature every year, but earn a higher overall rate than you would in a one year CD. And, after four years your CDs will be earning the 4 year rate that was in effect in each year they were purchased.

Using actual SNB rates which were in effect from January 6, 2000 through January 6, 2003, laddering $40,000 in four $10,000 CDs would have resulted in increased earnings for you of $2,791 over an automatically renewable one year CD. Of course, past performance doesn’t guarantee future performance. Call your customer service representative for more details.

Individual Retirement Accounts (IRAs)

IRAs are one of the simplest of retirement plans: you fill out a form and contribute the money yourself. IRAs also have built-in tax advantages that allow your account to compound at a faster rate than a regular CD.

IRA Types Traditional IRA Roth IRA SEP IRA
Appeals to eligible Investors who: Anticipate being in a lower tax bracket in retirement; or Meet the criteria for making tax-deductible contributions and are most interested in a current tax deduction Earn less than $110,000 (single) or $160,000 (joint). Expect their tax bracket to be the same or higher in retirement age. Most interested in passing IRA assets to their heirs. May not need their IRA assets. Are self-employed individuals or business owners with employees. Prefer a plan that is easy to set up and maintain.
Account Description Your earnings grow tax-deferred, and, if eligible, your contributions may be tax deductible as well. You can also roll over your 401(k) or retirement employer-sponsored qualified plan to consolidate your retirement assets. You make after-tax contributions, but the money you withdraw after retirement may be free from federal taxes. Small business owners can make tax-deductible contributions with this flexible plan that is easy to set up and maintain. If you have employees, you may be required to contribute for them as well.
Eligibility to Contribute You can contribute up to the year you turn 70-1/2 as long as you have earned income. You can contribute at any age as long as you have earned income and meet the income limits. You can contribute at any age if you are self-employed or a small business owner.
Maximum Annual Contribution Lesser of 100% of earned income, or In 2006 & 2007 - Under age 50 - $4,000 In 2006 & 2007 - Over age 50 - $5,000 Lesser of 100% of earned income, or In 2006 & 2007 - Under age 50 - $4,000 In 2006 & 2007 - Over age 50 - $5,000 As a small business owner you can contribute up to 25% of your compensation or $42,000, whichever is less.
Taxation of earnings & withdrawals Tax-deductible contributions and earnings are taxed as ordinary income when withdrawn. Contributions (all are made after-tax) and earnings are income tax-free if the account is held for 5 years and are withdrawn for a qualified reason. Withdrawal of earnings for non-qualified reasons may be taxed as ordinary income and subject to an early withdrawl penalty. Tax-deductible contributions and earnings are taxed as ordinary income when withdrawn.
Withdrawal Penalties 10% IRS early withdrawal penalty if withdrawn before age 59-1/2 unless exception applies; and 6 month interest penalty may apply on early CD withdrawal before age 59-1/2 No penalties for withdrawal of contributions 10% IRS early withdrawal penalty if earnings are withdrawn before age 59-1/2 unless exception applies. Six (6) month interest penalty may apply on early CD withdrawal before age 59-1/2 10% IRS early withdrawal penalty if withdrawn before age 59-1/2 unless exception applies.
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