It's never too early to start saving for retirement. Missouri Credit Union IRAs offer benefits that make all the difference in retirement planning. IRAs are available to all members at the PLUS and ULTRA Advantage levels in the form of Roth IRAs, Coverdell Educational Savings Accounts as well as Traditional IRAs. IRAs are insured to $500,000.
- Traditional IRA
- Roth IRA
- Coverdell Education Savings Account (formerly Education IRA)
Roth IRA – The Roth IRA is a nondeductible account that features tax-free withdrawals for certain distribution purposes after a five-year holding period. Since Roth IRA contributions are nondeductible and taxed in the year they are earned, people who expect to be in a higher tax bracket when they retire may benefit more from a Roth IRA than from a Traditional IRA.
Coverdell Education Savings Account – Coverdell Accounts are not a retirement savings. Instead, it is a savings tool created to help save for an individual’s higher education expenses on a tax-favored basis. Distributions for qualified higher education expenses are federal income tax free and IRA penalty free. In prior years, CESAs were not very attractive to parents, grandparents, and other parties interested in contributing to a child’s education because contributions were limited and CESA assets could only be used for higher education. The Economic Growth and Tax Relief Reconciliation Act of June 2001 dramatically improves the scope and depth of CESAs, beginning in 2002. For details about these improvements, please contact a MCU personal financial officer at any Columbia or Jefferson City location and request informational materials be mailed to you.
Traditional IRA – The Traditional IRA allows you to defer taxes on your earnings (interest earned) until they are withdrawn. Also, your contributions might be tax deductible in the tax year they are made. As always, please check with your Tax Advisor/Consultant for any IRA question.
2001 Retirement Legislation Update – In June 2001, the Economic Growth and Tax Relief Act (the Act) became law. The Act provides for sweeping changes to all individual retirement accounts (IRAs) and employer-sponsored retirement plans. The changes include greater contribution limits, more flexibility in moving money between IRAs and plans, and a variety of other enhancements.
As always, please check with your tax advisor/consultant for specific IRA changes that apply to you.
IRA Investment Savings Plans
For the purpose of providing additional savings programs for our members, MCU offers a special class of shares known as Individual Retirement Accounts (IRAs) Investment Savings Plans.
- Open the IRA Investment Savings with only $250
- Add to your IRA Investment Savings with payroll deposit
- Interest is paid and credited quarterly to your IRA.
Rate Information — The interest rate and annual percentage yield (APY) may change every quarter. The interest rate for your account is based on the following Index: the 13-week average of the 6-month U. S. Treasury Bill rates as published by the Federal Reserve Bank of St. Louis. The interest rate is calculated as follows:
|$0.00 to $999.99||Index less 4%|
|$1,000.00 to $2,999.99||Index less 2%|
|$3,000.00 to $9,999.99||Index less 1%|
|$10,000.00 to $49,999.99||Index|
|$50,000.00 or more||Index plus 1%|
For current rate information, please ask a personal financial officer at any MCU location for a current rate sheet.
Compounding and Crediting — Interest will be compounded every quarter. Interest will be credited to your account every quarter.
Interest Period — The Interest period is quarterly. The interest declaration date is the last day of the interest period. If you close your account before the interest is paid, you will not receive the accrued interest nor will they be posted to your account on the last day of interest period.
Minimum Balance Requirements — The minimum balance required to open is $250.00. You may add to your IRA Investment Savings with deposits made at any MCU location or automatically with payroll deposit.
Daily Balance Computation Method — Interest is calculated by the daily balance method which applies a daily periodic rate to the balance in the account each day.
Transaction Limitations — You may not make any withdrawals or transfers to another credit union account of yours, or to a third party by means of a preauthorized or automatic transfer, telephone, computer or similar order to a third party.
Fees — If your account balance should drop below the minimum balance of $250.00, a yearly fee of $10.00 will be applied to your IRA.
If you fail to maintain a balance of $.01 in your Savings Account, all of your MCU accounts may be closed and a check for the total balance sent to your statement address 30 days following notification.