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