CD Individual Retirement Accounts

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retirement accountCD IRAs offered at CNB are one of the safest ways to save for retirement, as they are FDIC insured and offer steady returns.  The sooner you start contributing to an IRA and the longer you let your money grow, the more you benefit.   Are you unsure of what type of IRA best suits your needs?  CNB offers both Traditional CD IRAs and Roth CD Individual Retirement Accounts.

The most significant difference between the Traditional and Roth IRA is the treatment of taxes by the U.S. Government. For example, if you earn $50,000 a year and put $2,000 of that in a traditional IRA, you can deduct that $2000 contribution from your income taxes . You will then owe taxes on $48,000. At 59 1/2, you can begin withdrawing funds. However, you will be taxed on all of the capital gains, interest, dividends, etc., that were earned over the past years.

Using the same example, let’s review what happens with a Roth IRA. If you put $2,000 into a Roth IRA, you may not deduct the contribution, nor is it necessary to pay taxes when you begin making qualified distributions.

Both account types have annual maximum contribution limits. For more information on the differences of each account type, please review Traditional CD IRAs or Roth CD IRAs on our website.