Ira Cd

Frequently Asked Questions

1. QUESTION:
   What is the difference between a Roth IRA and a Roth IRA term cd?
   What is the difference between a Roth IRA and a Roth IRA term cd? Does the Roth Cd act like a regular cd but with tax free interest? When the Roth CD term is up, do I have to roll it over into another Roth Ira cd? If I end the Roth Cd at the end of the term, is there a penalty?

   • ANSWER:
     Let me explain. You can take the money out of the Roth IRA account at anytime, but you may need to place the money back into the account or you will be taxed. A Roth IRA is a retirement account which requires 00.00 and may be withdrawn when you are 59 1/2. You will not be taxed as long as you take this money out after your 59 1/2. Take the money out before 59 1/2 and you may be taxed. A Roth IRA CD has a higher interest rate than the Roth savings account. Keep your money in here and you can earn more money. The roth IRA accounts(savings and CD) are designed to be withdrawn after your 59 1/2. Please don’t put your money here unless you want to save it for your retirement. Join my storeonwheels group in yahoo groups when you have money or business questions.

2. QUESTION:
   Can I roll an IRA Cd over into two different Mutual funds?
   I removed funds from a bad producing IRA CD. I have been advised that I have 60 days to reinvest the money. Can I split the proceeds between two other funds, or do I have to reinvest the total sum in only one fund?

   • ANSWER:
     Just make sure you make the purchase in an IRA account…..set one up…. Fidelity, Vanguard, whoever…and keep those records !!.. Once you’ve set it up…you can trade on-line into any fund you wish or even venture into ETF’s or individual stocks…….

3. QUESTION:
   What’s the difference between an ira cd and a cd?
   I’m trying to roll over monies in a “profit sharing” plan into something. It’s not considered 401(k), nor is it a “retirement plan.” My credit union offered me a IRA cd saying it’s the conversion from “profit sharing” to money I can get out without penalty, yet there’s a “waiting period.” Has anyone heard of this?

   • ANSWER:
     Absolutely a waste. An IRA is a retirement saving vehicle and you cannot get at your money till age 59 1/2. If you must roll it over and there is no tax consequences then just put it in a regular cd

4. QUESTION:
   Transfer IRA CD from an out of state bank to another institution?
   I have an 18 month IRA CD that I renewed in March of this year. Can I transfer it to another institution without a penalty? I found one offering a much higher interest rate. I’d hate to have to wait until it matures! Also, is there anything else I could roll it over into before it matures without a penalty? It’s not a small amount of money and I’ve really made a stupid mistake in renewing it.

   • ANSWER:
     If this is a bank CD, you are going to have to pay whatever early withdrawal penalty you contracted for. Check your documents, as these penalties vary.

     Otherwise, you are going to have to wait for it to mature.

     Sorry.

     –>Adam

5. QUESTION:
   I am 21 years old and preparing for retirement What would be the best way to go about that. A IRA CD Any ideas?
   I am wanting to prepare for retirement now. I want to look into IRA’S CD’S and all kinds of other stuff but would like to hear other opinions on the matter. Any thoughts?

   • ANSWER:
     With such a long time before retirement, you might want to look elsewhere than CD IRAs. While they are safe, they provide little in terms of long-term growth. If you were in a position of needing the retirement income and safety right now, then fixed income investments like this would be fine.

     In your case, you want to begin putting together an investment plan that will give you an opportunity to grow your portfolio much faster than something like a CD that can’t even keep up with inflation. This would probably include mutual funds or exchange traded funds that give you some exposure to the markets.

     Yes, the markets are down right now, but as a young investor, this is to your advantage. You’ll be able to begin investing while things are well off their record highs. Plus, with 40+ years until retirement, you shouldn’t be concerned with what’s happening on a daily, monthly, or even annual basis right now. The main thing is to start saving and investing now, and keep plugging away at it.

     You can open an IRA (roth or traditional) at many banks, brokerage, or mutual fund companies. There are pros and cons to each. Banks are convenient, but you’re probably going to get sold an investment that’s high in fees or possibly even have a front-load. Brokerage companies (like Scottrade, Ameritrade, TradeKing, and so on) are easy to set up, and typically inexpensive. With these accounts you’ll have the option to buy individual stocks, bonds, ETFs, or mutual funds. These have flexibility, but transaction costs for placing trades can eat into your investments if you aren’t careful. And finally, you can open an account directly with a mutual fund company themselves, such as Vanguard. You may lose some flexibility with overall investment options, but provided you go with a good no-load company, it’s going to be one of the cheapest ways to start investing.

     There are a lot of options available to you, so it just depends on what you’re looking to do initially. But I applaud you for even thinking about this at your age. I wish I had started investing when I was 21.

6. QUESTION:
   Questions on moving 401K to Roth IRA CD and taxes?
   I moved some money last year from a 401k funds to a Roth IRA CD at a bank. However, I am wondering how this works for tax purposes. I did make a little interest on it. However, it was less than 200$. How does this work for tax reasons? Is the whole amount taxable, the interest, or none at all?

   • ANSWER:
     depends on the type of Roth– the tax free Roth you would have had to pay the tax on the amount you converted
     if it is a reg IRA, the same type as your 401 K, the interest accrues and you pay when you take distribution

7. QUESTION:
   IS a Bank CD IRA a good retirement account? Do you know which Banks offer the best rates for Bank IRAs?
   I am looking into investing in a second IRA, a CD Bank IRA, my question is this a good investment, will I make good returns from this, I dont think the rates are good for Bank IRAs but I can be sure I wont lose any money.
   Note: I already have another retirement account through my employer.

   • ANSWER:
     CD’s are one of the worst places for retirement investing. You’ll lose on the purchasing power of each dollar, over time, because of inflation & the taxes you’ll pay when you pull the money out (at over ager 59.5).

     Stay away from banks & insurance companies for retirement products. Here’s some good mutual fund families that can be helpful;
     T. Rowe Price
     Dodge & Cox
     Vanguard

     Good luck!

8. QUESTION:
   Can I fund an IRA CD with gift money or foreign money?
   A friend bought me an IRA CD for 5K for tax year 2008. I had no income in 2008, other than interest earned on CD’s and savings accounts. The IRS doesn’t allow you to have an IRA CD if you have no income, and you’re not allowed to fund it with bank interest earned. Does the IRS allow you to fund an IRA CD with gift money, or foreign money (my friend is foreign) without any kind of penalty?

   • ANSWER:
     You must have earned income (wages, net self employment, commission, etc) to fund an IRA. The IRS-imposed penalty for over-funding an IRA is 6% per year, until withdrawn.

     PS – be sure to choose your “Best Answer” when the time comes. Thank you, in advance, from all of us who take the time to respond.

     Disclaimer. The information in this response is for general purposes only, and shall not be construed as specific tax, legal, or investment advice for any individual. The questioner is urged to contact their own professional advisors before implementing any tax or investment strategy.

9. QUESTION:
   What percent does an Executrix get after selling a 100000.00 home, and closing estate account of cd,Ira’s ?
   Took a year to close out estate, finally sold home. Have already divided money, CD’s Ira . I was told up to five percent, that it depended on money coming in and going out. I live in Alabama.
   Total estate comes to 278,947.92.
   178,947.72 has been divided Can I leagally take 2.5% of total estate from top of the 0,000.00 sell of house?

   • ANSWER:
     Hi,
     Your state determines the maximum allowed but 5% is normal for the 1st 200k of an estate, plus any expenses incurred. The 5% is taxable income to you. One year is excellent timing, most take 18 – 24 months.
     Additional Info:
     Fees are normally based on the value of the estate, not just the house.
     up to 0,000.00 =5%
     amount over 200k 3.5%
     On the 278,947.00 You can charge the estate ,763.00 as executrix fees.

10. QUESTION:
    I’m 24 and want to start a IRA CD for retirement how much should i invest?
    i just want a estimate on how much i should open a CD at my bank to insure i can retire at 60 or a little sooner, also is there a min. limit you can open a CD with?

    • ANSWER:
      If you’re only 24, you’ve got 40 + years to save, so you should be buying equity funds which will provide much better returns over the long term. Go to vanguard, fidelity, schwab, etrade, etc and open up an IRA with them. I like index funds, and you should put as much as you can aside. There is a max of ,000 you can set aside per year.

11. QUESTION:
    The IRA CD I own has two years remaining to mature, should I cash out and roll over it into a 403b?
    The IRA CD itself is a five year cd, only earning 1.2% with two years left, and it is worth about ,300. I have a fidelity account through my workplace and the investments that I have, I’m earning an AVG of 10% a year. Should I “roll over” the IRA into my 403b or should I let the cd mature?

    Thanks..

    • ANSWER:
      It would be nice to earn a little more than 1.2%. My question would be what is the structure of your 403b? I’m in a 457b and have limited investment options through my 457b plan administrator. Most of the mutual funds offered just aren’t very good.

      My IRA, however, is with a full service broker, and I have my choice of funds, stocks, bonds, ETFs, etc. So I have no desire to move any funds out of my IRA account.

      If you like your 403b plan, then roll it over. Otherwise consider rolling your IRA CD into an IRA brokerage account where you’ll be free to buy money market funds, mutuals, stocks, whatever you like.

      And keep contributing to your IRA as well if you have the money.

12. QUESTION:
    If Wachovia is aquired by another bank is my IRA(which holds American Funds and an IRA CD safe?
    Also have a CD outside my IRA worth 175,00 w/ 2 children as beneficiaries

    • ANSWER:

13. QUESTION:
    Should I stop contributing to my IRA Stock and start up an IRA CD?
    I am only 8 years away from retirement. Didn’t have much to start with and have lost lots in the last 6 months. What can I do that’s safe?

    • ANSWER:
      They say that if you need the money in less than 10 years, it should not be in the stock market. The fact that you want to retire in eight years means you’d definitely be safer in a CD. Whether you want to leave what’s already in stocks there (as opposed to selling now when prices are so low) is up to you.

14. QUESTION:
    What is the best retirement investment account for a construction worker? CD, IRA, Or Other??
    My husband and I are looking to start a retirement account, but I don’t know much about CD’s or IRA’s. Can anyone help that speaks common english, instead of the banker talk?? Thanks

    • ANSWER:
      An IRA and a CD are two completely different things.

      An IRA is an account, kind of an “umbrella” under which you can place virtually anything: stocks, bonds, mutual funds, unit investment trusts, exchange-traded funds (ETFs), real estate investment trusts (REITs), and—yes—CDs.

      CD is an acronym for Certificate of Deposit. I’ll come back to that in a moment.

      Returning to the IRA: IRA is an acronym that stands for Individual Retirement Account. You also will see it, rarely, written as Individual Retirement Arrangement. So just from the name you can see that the answer to the question “what is the best retirement investment account, CD or IRA” is IRA.

      You also mention “other”. If by “other” you mean that (and I’m assuming your husband is the construction worker) your husband is an employee of a company, and that company offers a retirement plan, then the general answer is YES, “other” is good! Participate in the company’s retirement plan! It helps in many ways, not the least of which is that the company will pull the investment in the plan out of your husband’s check before he gets it, so it forces the discipline of saving. Very helpful.

      Let’s go back to the IRA. Here’s how it works: it’s a retirement account, which means you can put money in it IF you have earned income (like a construction worker), and the maximum you can invest if you’re under 50 is ,000 per year. If you aren’t covered by another retirement plan, generally that ,000 (or however much you invest, up to the maximum of ,000) is deductible from your income. So in other words, if you earned ,000 and place ,000 in an IRA, you pay tax on only ,000. This is an incentive to get you to save for your own retirement.

      The amount you place in the IRA, up to the maximum of ,000, is invested inside the “umbrella” of the IRA and grows tax-deferred (a VERY big deal) until you withdraw it. You cannot withdraw it without a penalty until the age of 59½. Be sure you are prepared for that; this is NOT a savings account and you do not have access to this money without penalty (except in very limited circumstances) until you are 59½. This is to force the discipline of leaving it alone for retirement; again, it’s an Individual RETIREMENT Account.

      Now, today there is a different kind of IRA called a Roth IRA. “Roth” refers to the sponsor of the legislation that created this account, Sen. William Roth of Delaware. There are two major differences between an IRA and a Roth IRA. In the Roth, you receive no tax deduction on the amount you place into the IRA, and the money grows TAX-FREE. Also a VERY big deal. Again, this is NOT a savings account and you do not have access to this money without penalty (except in limited circumstances) until you are 59½.

      You might consider placing a total of ,000 into IRAs per year, ,000 into a regular IRA where you get a ,000 deduction and the money grows tax-deferred, and ,000 into a Roth where you get no deduction but the money grows tax-free. That way you would get some benefits of both.

      So if you really want to save for retirement (and we all should), first participate in your company’s retirement plan, if any, then open IRAs.

      A couple of other points on IRAs: virtually anywhere you set up an IRA, there is an annual fee for it. Usually it’s or per year. On top of that are fees, commissions, or charges for whatever you invest the IRA money into. Sometimes you’ll see or hear commercials or ads, or talk shows on radio, that say they charge no investment commissions–oh, but there’s a fee. Or there’s no fee–oh, but there’s a service charge. There are ALWAYS fees/charges/commissions. Nothing illegal or immoral about that; it’s a business, just like construction work.

      Now, back to the CD. A Certificate of Deposit is an investment that offers a fixed rate of interest (today 3.2% or so) for a fixed amount of time (3 months, 6 months, a year, two years, etc.). You “buy”a CD usually in increments of ,000; you can buy a ,000 CD or a ,000 CD, but not a ,187 CD, in other words.

      CDs are issued by banks. You can buy one from any bank. You can also go to a brokerage firm, like Morgan Stanley or Merrill Lynch, and buy a CD. Those firms do not issue their own CDs; instead, they act as a go-between for you and CDs from banks all over the country. In this way you have access to rates from all over the country, instead of hoping your local bank offers a good rate.

      A couple of other points: If you buy a CD for a 3-month period and need the money in 2 months, there generally is a “penalty for early withdrawal.” Generally the penalty is the interest you’ve earned so far. At the end of the period (3 months, 6 months, etc.) the CD “matures” and you can either buy another one or do something else with the money. Be careful, if you buy the CD from a bank, that the bank does not “automatically” reinvest into another CD. Interest rates for CDs are quoted as an annual rate; 3.2% referenced above means the CD earns 3.2% per year. If you buy a CD for 3 months, then, since 3 months is ¼ of a year, for a 3-month CD you earn ¼ of the rate, or in this example ¼ of 3.2%.

      Okay, so let’s put these two together. You can open an IRA and deposit ,000 into it.
      With that ,000 now in the IRA, you can buy a ,000 CD for 6 months. That’s one way to go. Or you can buy mutual funds, or bonds, or stocks, or anything else.

      One more note about IRAs and CDs: You can go to your local bank and tell the bank teller you want an IRA. Generally the teller will give you some forms to sign and the IRA money will be automatically invested into a 1-year CD. The bank representative will tell you there’s no fee for the IRA. HOWEVER, the 1-year CD that’s in your IRA will earn less than a 1-year CD you buy outside your IRA. So is there a fee? Of course. It’s built into the lower rate you get on your CD. You just don’t see the fee.

      Hope this helps. I tried to make it plain English! Good luck.

15. QUESTION:
    Would my money be better in a Roth IRA or a CD?
    I’m a college student with no bills or payments other than food. I work part time and save 10% of what I make and put it into my Roth IRA. My IRA took a big hit when the economy went bad but has recovered fairly well since. I have over ,000 in it already but I’ve only made about 4% of that investing it in mutual funds. Is there a better option? Should I put some money in a CD? Any suggestions?

    • ANSWER:
      CDs are TERRIBLE investments right now.

      Assuming this money is for RETIREMENT (since you are putting it in a retirement account) you need to stop worrying about the short term fluctuations. The more the market goes down now, the more shares you can buy. When stocks are cheap, they are “on sale”. I HOPE the market crashes often over the next decade or so while I am in the BUYING mode. When I retire in 25 or 30 years I will worry about fluctuations in the market and sell of when prices are high and move money to safer investments.

      Everytime the market goes down (like today) I transfer money from my money market into the various stock funds in my IRA.

16. QUESTION:
    Can a taxsheltered annuity be rolled over to an ira CD account at a bank without paying income tax ?

    • ANSWER:
      It depends on the status of the tax sheltered annuity(TSA). If the TSA is an IRA, 403(b), 401(k) or some sort of account that you took a tax deduction on your tax return the year(s) you made contributions, then you can roll it to an IRA CD at the bank. Look carefully at your statement from the TSA and see if it says IRA or 401(K) or 403(b) or “qualified account” close to where your name or account number is located. If you added money to this account thru a payroll deduction plan, it probably is an account that can be rolled to the IRA CD.
      A TSA can also be what is called a non-qualified account, meaning that you put after-tax dollars into the account. These TSA accounts cannot be rolled over to a CD.
      It is often times hard to get the TSA company or their representative to help you with you questions about moving money OUT of their company. However, the bank where you want to move the money to should have a representative that is more than willing to help you figure out how to move money TO their bank. Take your TSA statement to the bank and ask for their help. I disagree with the previous answer about getting help from the TSA company.

17. QUESTION:
    What is the difference between an IRA CD and just a regular CD?

    • ANSWER:
      An IRA is a tax advantaged plan allowed by the federal government. With an IRA you can invest in Stocks, Bonds, CD’s etc.

      If you can legally get into an IRA…. It’s a good idea! I wouldn’t suggest a CD however. IRA’s are for your retirement. Historically stocks have given a rate of return better than CD’s.

      Check into “regular” IRA’s and ROTH IRA’s…… If you have additional funds to invest (more than 5 years)…..stocks (S&P 500 Index funds for example) would be a good start.

18. QUESTION:
    What should I do with my son’s money,CD or IRA?
    My son which is nine has ,000 to be put up for him until he reaches 18. How should I keep it in a bank, Would a cd or Ira be more wise. I am not very familuar with IRA.

    • ANSWER:
      I think IRA’s (Individual Retirement Account) can not be touched until retirement without huge taxes paid on them. A CD (Certificate of Deposit) has a specific time period where you don’t touch it and then the money becomes “liquid” at maturity. Your best bet is to go to a bank and talk with a financial rep to see what would yield him the most return when he becomes of age.

19. QUESTION:
    What are the penalties for withdrawing money early from a IRA CD?

    • ANSWER:
      You probably have two types of penalties.

      First, if you withdraw money from a CD, you’ll probably have a bank-imposed penalty of something like 3 months interest. Check with the bank to find out how large this penalty is.

      The second type of penalty consists of 10% of the amount withdrawn if you’re younger than 59 and 1/2, plus payment of federal and state income taxes on the amount withdrawn (regardless of your age). It’s not a good idea to take an early withdrawal from an IRA, because the long term cost to your retirement could be substantial.

20. QUESTION:
    What is an IRA CD? How is it diff from a CD? And…?
    What is an ira cd? How is it diff from a CD? And how much could i end up with if I were to lock into an interest rate of 6%. I could invest 500 at 6% for one year. What would that be? I just dont get how the interest is calculated. Can anyone help? Thanks

    • ANSWER:
      There are two types of IRA accounts, a traditional IRA account and a Roth IRA account. They are retirement savings accounts. Anyone making less than 0,000 income a year can put up to 00 into a Roth IRA. The money you put into a Roth IRA is after tax dollars, but the income earned in not taxed ever or until they change the law, whichever comes first. So no money taken out of a Roth IRA is taxed. If you are not participating in a 401k, you can put up to 00 into a traditional IRA. That money is before tax money. You do not pay taxes on that money, but all money taken out of that IRA is taxed as regular income when you take it out.

      You have to be 59 1/2 to begin taking money out of an IRA account without penalty.

      Now for CD’s.

      Once you set up your IRA account, one of the vehicles you can invest in are CD’s. However, I do not believe that one year CD’s currently pay 6% interest for one year. The current rate is about 5% to 5.2%, with most being 5%.

      Interest is calculated by multipling the amount by the interest rate expressed as a decimal value 5% becomes 0.05 expressed as a decimal. If the CD is for a period of other than one year, you must then multiply the annual amount by the time period to get an approximate return. It will not be exact for over a year because of compounding. But compounding requires a calculator or spread sheet to calculate.

21. QUESTION:
    my husband turned 70 1/2 this year, he has an IRA cd he has been taking the interest from and it covers the?
    RMD for IRS rules ( this year he gets a government break ) for 2010 and the future BUT the cd matures next year, how does he handle the princable in the IRA, can it be taken all out and placed wherever he wants etc ?? does it have to stay in the same bank it is in now etc ?? does the government still have “control” over what he does with it now that he is ” of age” THANKS in advance.

    • ANSWER:
      First, look at the amount of money he’s got. If he took it all at once, what would the tax bill look like? If he took it over the next 5 years, what would the tax bill look like? (Remember, this is income that can make his SSA benefits taxable.) What if he took out over the RMD estimated life expectancy?

      If he can take the money slowly and not pay any tax, I’d go for that. If he will always be paying tax and is in the 10% tax bracket, I’d probably consider taking as much as it takes to max out the 10% bracket each year (and then not spend it all).

      As for the account, the IRA is the account holder. The IRA can be held as cash, in a CD, in stocks, in bonds, etc.

      You are correct that a CD may or may not be the best choice at this point. Depending on the amount of money involved, you can buy multiple CDs, each with different maturities–but realize that you have to take out the RMD each year (the 50% penalty is nasty!).

      If the bank that has the CD isn’t willing to do let him keep the money they way he wants, call around to, say, Fidelity, Schwab, Morgan Stanley, etc. All of those will let him open an IRA, will do the trustee to trustee rollover, etc. (But watch the fees!)

22. QUESTION:
    Which is better–A Regular Roth IRA or a Roth IRA Term Cd?
    I just wrote a question asking what the difference betwee the two are, but I would like to know which is better for me. I would like to invest in a Regular Roth IRA, but I don’t like dealing with the Financial Advisors who eat up my savings with commissions and fees. If I could get a regular Roth without losing a lot of money, I would do it, but I have about 10 years left before retirement. I have many term cds. I have seen Roth IRA Cds at my credit Union, but none of the Financial People their can tell me how the Roth Cds work…. I need to know exactly how they work and the benefits, so I can decide between investing in Roth Ira, Roth Ira Cd, or a regular Cd..
    Thanks

    • ANSWER:
      You can invest in a regular Roth IRA without going thru sharks, excuse me, financial advisors. They can be opened at many financial institutions, I would recommend Vanguard (they don’t have local offices so some people like a place they can walk/drive to). Fidelity and Schwab are also some good places to hold them with many local offices.

      When you have Roth IRA, you open the account by filing the paperwork and funding it (usually via a check you write them). You will then have a choice of investment options. You can leave the money without investing it (not something I recommend) and it will earn money since it will sit in a money market fund. You can invest it in CD’s as well at several of these brokerage houses. There is also a variety of mutual funds or stocks you could purchase if you’re comfortable with those types of investments.

      If you invest in a Roth IRA CD, that is usually opened with a bank/credit union. At the time that the CD matures, you have to decide whether you want to leave the money in a savings account or roll it into another CD (be careful because some will automatically roll your money into another CD, so always ask). Most credit unions do not offer any other types of investment vehicles that do not have commissions associated with them while banks seem to be getting into different businesses everyday. You can also at the end of these terms, roll (move) the matured funds to another Roth IRA account (at another bank/credit union or brokerage house). There are some rules surrounding this, so you need to be a little careful when you do this so as not to incur any penalties.

      I do agree with the other answerer in that if your horizon is 10 years out or longer, then no-load mutual funds will likely return a better yield. However, never invest in something you do not understand or are not comfortable with.

23. QUESTION:
    How do you find out what kind of life insurance policies, IRA’s, and CD’s a family member has when they pass?
    Life insurance, IRA’s, and CD’s are not filed through the estate; therefore, they are not sent through the courts. My husband and I are trying to find out what intangible property his father had when he passed on. Since his oldest sister was not only a benficiary, but also an executrix of the will, among past experience, we don’t know that she distributed property evenly as was dictated in the will.

    • ANSWER:
      Here are some tips to find lost life insurance policies or financial accounts:

      ·Go through canceled checks or contact the insured’s bank for copies of old checks. Look to see to whom checks were made out. You just may find an insurance company.
      ·Ask those who may have known about the insured’s financial situation. Try their lawyer, banker or accountant. Also try their auto or home insurance agent. They may know where the insured went for life insurance & financial advice.
      ·Contact the insured’s past employer. An employer may know of possible group insurance. The insured may have also purchased supplemental insurance through work.
      ·Keep in mind that there is no national database of lost life insurance policies.
      Also, if the insured dies and three to five years later you, the beneficiary, still can’t find the policy. There’s a chance — though a slight one — that you can go to the state, rather than the company, to get the money.

      Also, if the insured dies and three to five years later you, the beneficiary, still can’t find the policy. There’s a chance — though a slight one — that you can go to the state, rather than the company, to get the money.

      Ron @ InsureMe http://www.insureme.com/?Refby=614545

24. QUESTION:
    what is the difference between an IRA cd and a conventional cd?

    • ANSWER:
      The IRA CD grows tax-deferred or tax-free (if a ROTH) until the IRA is closed out (usually at retirement age 59 1/2 yrs+). The conventional CD is in a taxable account, so earnings/interest are taxable each year. Both CD’s are investments, however they are sitting in different kinds of accounts which dictate when taxes will be paid.

25. QUESTION:
    Can I rollover an IRA CD before maturity?
    I would like to move this CD because I am very unsatisfied with the service this bank offers. Can I roll it over before maturity without taking a hit?

    • ANSWER:
      Doubtful. A CD is a ‘term’ instrument. Best to shop for the best bank and then upon the ‘rollover window’ write a letter of your complaints and move the $$.

26. QUESTION:
    do i need to pay taxes on High Yield CD IRA ?
    if i open a High Yield CD IRA Short, 12-month term with a locked 2.05% APY2. ,000 minimum to open. Special online-only rate do i need to pay taxes on the High Yield CD IRA?

    • ANSWER:
      Yes you do.

27. QUESTION:
    Does a ’12 month IRA CD’ mean you can take out the money after the period is over?
    OR are there still penalties for withdrawing the money early even though it is a 12 month IRA CD? Is the amount allowable for tax deductable the same for a short term IRA CD as regular IRAs?

    • ANSWER:
      Keep in mind, there are 2 sets of penalties.

      The first is the IRS penalty regarding early withdrawals from IRAs. Anybody under the age of 59.5 would be subject to these IRS penalties unless you met one of the IRS exceptions (military, first time homebuyer, 72(t), etc.).

      The second level of penalties is what you might call the bank’s penalty (or other financial product/institution’s penalty). Typically banks will charge about 3 to 6 month’s interest for premature withdrawals.

      To answer your question: If you are over the age of 59.5 and you’ve fulfilled your 12 month commitment to the bank, then you should not have any withdrawal penalties.

28. QUESTION:
    Will getting a CD or IRA raise my credit score?
    I’m trying to find a way to improve my credit score to rent an apartment.

    To rent an apartment in San Diego you need to make three times the rent, or 6 months rent in savings, plus have good credit.

    So I was thinking about getting a IRA for ,000. So that I can prove I have 6 months rent and I am hoping it will raise my credit score.

    • ANSWER:
      No.

29. QUESTION:
    im taking money out of my IRA cd retiremnt. what is the percent government charged for taken it out early?

    • ANSWER:
      A 10% penalty for taking it early, plus regular income tax on the amount withdrawn.

30. QUESTION:
    Can court take IRA and/or CD for writ of execution money judgment?
    My husband passed away from lung cancer 2 years ago. I had a credit card in my name and cannot pay it (on social security only). I have no money and no job (though I have pursued employment). I have an IRA that will mature in 1 1/2 years (the only money I have). Can they take that?

    • ANSWER:
      Yes they can. I suggest you keep looking for a job.

31. QUESTION:
    Should I put money in 403(b) or save on my own for IRA CD?
    I could set up a new 403(b) account now. But as the market going down, I am not sure if I should participate or not.
    Should I save the money on a side and put them into my IRA CD, instead of contributing to the 403(b) ?

    Could you give me an advice?

    Thank you.

    • ANSWER:
      With market conditions as they are; best bet would be to put money in 2 or 3 year CD. Market condition should come around by then. Go to bankrate.com for best rates on cds

32. QUESTION:
    How does a IRA compare to a CD for income for a recent retiree?
    What is a IRA, and how does it work?

    • ANSWER:
      If you’re retired, you don’t really need an IRA (Individual Retirement Account). The idea for an IRA is to use it as a way to defer paying taxes until you retire (and presumably, your tax rate is much lower). That probably doesn’t apply for you.

      You probably want to invest your money in a low-risk way that gives you a decent return on your investment. Unless that you have *so* much more than you need to support your lifestyle, you can probably do better than CDs. A mix that’s pretty heavy on quality bonds, with a diverse blend of stocks making up 25% or so of your investment, will mostly likely do better for you over the remainder of your life, without a significant downside to worry about.

      Good luck to you and congratulations on your retirement!

      Doug

33. QUESTION:
    Interest Earned of CD Roth IRA?
    I just found out that the interest on my Roth IRA Cd is marked as “earned not yet paid” to the account. The investment banker explained to me that the interest will not be posted to the account until CD matures. Is this correct? Another words, the interest will be calculated on the original amount, and not on the original amount plus interest. I’m confused.

    • ANSWER:
      That is correct. With a CD you don’t actually receive the interest until you redeem the CD. But it is still being earned. The interest will still be compounded and you will receive the entire amount when at redemption.

34. QUESTION:
    My 403b is losing money, I would like to rollover into an IRA CD.?
    Can I continue working with no penalties.

    • ANSWER:
      There are a few other reasons you don’t. Unless you are planning on retiring in the next couple years, do not remove money from the market. Moving money into a IRA CD, or even converting it to liquid assets, will merely lock in your current losses.

      If you didn’t move your 401(b) into a savings type account before the market fell, don’t bother doing it now. If you have 5+ years to wait it out, chances are the market will rebound and you should recoup those losses.

35. QUESTION:
    What is the different between normal IRA and IRA CDs?
    I notice from some investment company they offer IRA (that puts money in 2040, 2035, 50/50 or something like that) and IRA CD.

    Those numbered IRA are not FDIC insured but the IRA CD is.
    What’s the different? If the IRA CD is insursed. It sounds awesome, how come it seems like less people go with that?

    thank you
    By any chance if anyone know IRA CDs out performed by how much?
    Is it worth the risk?
    And how high is the interest right now for IRA CDs?

    • ANSWER:
      An Individual Retirement Account (IRA) can be made up of many investment options. An IRA such as a 2040 or 2035 is a balanced portfolio that invests in a combination of both stocks and bonds according to your retirement date and risk tolerance. (Ex. If your plan to retire in 2040, then the 2040 fund should fit your risk/return goals.)

      A IRA CD is similar to a standard savings account, except withdraws generally cannot be made until the age of 59 1/2 and that is why it is FDIC insured, the bank is paying you (minimal) interest to hold your money.

      Based on historical performances, securities such as stocks or bonds yield a significantly higher interest than that of a traditional IRA CD.

36. QUESTION:
    Any difference btw an IRA CD & investment IRA?
    I’ve funded traditional IRA CD’s before but this year I was thinking of doing an investment IRA (traditional). Is it reported the same on my tax return? Do I just report the amount I stashed in the account and it doesn’t matter what kind of account, or is there any difference in how I report this on my return?

    • ANSWER:
      Within an IRA, you can have any investment, whether its CD’s or things like stocks and bonds, the tax implications are the same.

      If you see “ROTH” in front of “IRA”, then its a different type of account with different tax implications.

37. QUESTION:
    Can an inherited IRA be put into a Bank CD?
    I have a Financial Advisor at Chase Bank where I put my IRA that I inherited from my Mom who passed away last year. I have to take yearly distributions like she would have taken according to my age. I am not happy with the performance and the commissions and would like to just transfer the whole amount to a Bank CD for an IRA at another bank without the broker commissions… and I would see a definite growth instead of the way I am losing with the stocks… Any ideas on how I can do this? Thank you!

    • ANSWER:
      Just do a rollover to a different IRA

38. QUESTION:
    should i change my roth ira to invest in cd’s until the economy gets better or leave it alone?
    I have an ira with American Funds and was thinking about moving it to a bank to invest in an fdic insured cd until things get better. Is this a good idea? What if things dont get better??????????

    • ANSWER:
      In general, it is a bad idea to get out immediately after staying invested through all the loss brought by this financial crisis. This means that if you cash in and move your money to a CD today, you will permanently accept this loss, and would not be able to take the advantage of a possible upside. If you invest long term 7-10 years or more, the market will have enough time to rebound. See http://www.ameri-financial.com/headline-story/401k-contributors-should-you-get-out-now.html. But is this answer right for you?

      In addition, you need to consider your risk tolerance and match your investment portfolio to your risk level. Taking too much of risk is bad because the loss can be devastating, as we saw last month. But the truth is that taking too little risk makes the investor lose too. This loss is a missed opportunity to make more money with your investment. If your risky investments exceed your risk tolerance, you should do exactly what you were thinking about – moving a part of your mutual fund holdings to FDIC insured cds/money markets.To properly estimate your risk tolerance they usually consider your entire financial situation: salaries and monthly obligations, debts and assets and, most importantly, your financial goals. Try a free financial analyzer http://www.ameri-financial.com/finance-test/personal-finance-test.html.

      If you do decide to sell some of your Roth IRA holdings, think about tax consequences. Move your money into another Roth IRA account to avoid tax penalties.

      Good luck!

39. QUESTION:
    can you transfer an IRA which is in funds to a CD without altering the IRA status?
    I want to put my IRA in something safer now that it has recouped the losses from the recession.

    • ANSWER:
      Yes. If you can’t do it with the current custodian, then you do a direct custodian-to-custodian transfer to a new custodian. People do it all the time.

40. QUESTION:
    Do a bank CD qualify as a IRA Rollover?
    Can you withdraw from a IRA account and roll it over to a bank CD acccount?

    • ANSWER:
      The answer depends on whether or not you are going to “withdraw” the funds or simply “roll over” the funds into a new IRA, or just reallocate the funds inside of the IRA account.

      An IRA can contain all kinds of investments, from a CD to stocks, and bonds, to cash. As long as the account that the funds are held in happens to be an IRA account, you can move the money into any number of different types of investments “within” that account.

      If you are talking about withdrawing the funds from the IRA and simply putting them into a non-IRA CD account, you will pay taxes and be penalized (another 10% tax on top of ordinary income tax) unless you are currently at retirement age.

      If you have a 401k or another type of retirement fund that you need to roll over into an IRA, once you have rolled the funds over into the IRA, you could invest that money into a CD or any number of different investments.

41. QUESTION:
    Can I take money out of my IRA mutual funds and buy CD’s without a penalty?
    I’m 70 years old and don’t want to loose any more money in the stock market. My financial adviser seems to want to sell me what is profitable to him rather than what is best for me. He won’t tell me if I can withdraw the money for CD investments. A little knowledge will help me plead my case to him.

    • ANSWER:
      You are being ripped off. I don’t understand what you mean by “pleading” your case. You are the customer. You give orders and the broker obeys. Get rid of this person immediately.

      An IRA is not and investment; it is a form of ownership.

      It is possible that your so-called financial adviser is a mutual fund salesman and can’t sell CDs. Go to a full service broker like Smith Barney and tell them your situation. They will open and IRA for you and assist you in transferring your assets from the other place. They can then put your funds in anything you want, including CDs. Do this today. It sound like you are dealing with a crook. Feel free to email me if you have trouble finding someone.

42. QUESTION:
    Difference between Roth IRA CD’s and regular CD’s?
    My credit union offers Roth IRA CD’s, Traditional IRA CDs, Plain CDs, Roth IRAs and Traditional IRAs. Right now all the rates are the same, and my husband and I are deciding between just starting Roth IRAs, or Roth IRA CDs, but we were wondering what would be different if we just did regular CDs instead of the IRA cds. Can anyone explain the difference and what would be better, we still have more than 30 years left to keep saving. Any information?

    • ANSWER:
      a roth ira is tax free if you leave it in for a certain amount of time. i think it is like five years, however you can only put in 3,500 or so per year, i could be a little off on the 3,500 figure but it’s something like that.

43. QUESTION:
    Has anyone ever heard of a IRA cd? And if so what is it???
    Need to roll my former company 401k into a IRA. Since I may need to borrow some of the money in the next few months….depending on my job situation, was told to “park” it in a IRA cd for a few months before actually turing it over to a IRA…..help! I need some advice!

    • ANSWER:
      Unlike your 401k at former employer, there are no loan provisions in an IRA. You do have 60 days to pay back any withdrawal from an IRA account to avoid triggering a true distribution (subject to income tax plus 10% penalty tax) but that’s tricky to time. If you establish your IRA rollover with a bank, you can invest in CD’s which tie up your money for longer periods but pay slightly higher interest. In summary, IRA money is not to be considered money you can borrow on–let it grow tax-deferred for your retirement, as it is intended.

44. QUESTION:
    Since the economy is bad, is it ok to get a IRA or cd or even money market?
    Will it eve be worth it in these days and times? Are they risky or little risk? I want a long term saving but dont want to -lose my hard earned money….

    • ANSWER:
      You should definitely have an IRA and you can choose the type of investment vehicle you want. It can be a CD, a money market, a mutual fund, stocks, bonds, etc.

      If you are young, you should consider putting your funds in a broad market index mutual fund with a discount brokerage such as Vanguard or T. Rowe Price. This is the best buying opportunity you may ever see, as long as you’re dollar cost averaging.

      The stocks you buy today will likely be worth considerably more by the time you retire. This is the time to buy – not when the market is way up.

      I am older than 50, so I have over 80 percent of my money in federally-insured accounts. But I continue to purchase a combination of stocks, bonds and fixed income investments for my annual IRA contributions. Sometime in the next ten years, I expect the stock market will recover and take off again. Since you can’t predict exactly when that will happen, it’s best to buy a little bit each year – when the market is down you get more shares of stock for your money – when the market goes up, you get fewer shares but their value is higher. That is what is meant by dollar cost averaging.

      This is your chance to buy low and sell high! Don’t be afraid. Be bold, and someday you may be quite wealthy.

45. QUESTION:
    Is it possible to deposit un-cashed savings bonds into a CD or an IRA?
    Basically I want to put them into a long term savings plan but I do not want to cash them yet because they have not matured.

    • ANSWER:
      Savings bonds ARE a long-term savings instrument. However, in order to reinvest the funds (and pay whatever taxes are due on the interest) they must be cashed. Because of the potential income tax impact of cashing this type of investment, you need to find out ahead of time what the tax impact will be. You also don’t say which series your bonds are.

      I got first-hand experience with these things. My parents had thousands in savings bonds. When I became their conservators, I was faced with setting up a system of liquidation as they were near maturity. I needed to time the redemptions so that they didn’t all get cashed in one year. Even then, we sent really big checks to the government because their value was in the interest that had accumulated – all of it taxable! They can be a real tax bomb waiting to explode upon redemmption, esp. if they sit around for 40 years like my parents’ bonds did.

46. QUESTION:
    im taking out money from my IRA cd retirement account because i needed a new car. will i still get penatalized

    • ANSWER:
      Unless you are over 59.5 you will pay a penalty as well as taxes at your marginal rate unless you put back the money within 60 days. Try to replace as much as you can, this was the most expensive thing you could have done probably. Getting your retirement back to what it was will mean replacing about double what you took.

47. QUESTION:
    Should i invest in a cd or Roth Ira?
    I wanted to know how much do i need to start investing and the advantages and disadvantages of a cd or Roth Ira? And what do you think i should invest in? I currently have a savings account but i want to make more money…

    • ANSWER:
      Such a complex yet very good question.

      I’ll go over the basics but (disclaimer alert) please do further research for yourself before committing to an investment plan.

      First, the question of CD vs. Roth IRA. The investment goals for these two are diametrically opposed.

      A CD is used for mostly short term investments. Similar to the Savings Account you currently have, money is put into a CD which after a predetermined period of time will earn a predetermined amount of interest. Unlike a Savings Account, in which you can withdraw funds as needed, early withdrawals from a CD will result in penalties. At the end of the year, interest earned by the CD and Savings Account is treated as ordinary income when calculating taxes. Looking at it very simply, the amount of interest that you earn is added to wages, the total of which you would look at a tax table to figure out your taxes.

      A Roth IRA is used for long term investment with the goal being that the investment will grow until retirement and will not be withdrawn until after retirement. There is a limit on how much can contributed to a Roth IRA up to a maximum of 00 per year (in 2008 the limit will increase to 00, then go up 0 each year to allow for inflation). Since a Roth IRA is funded using after-tax funds, withdrawals of the base contributions made after retirement are tax free. Earnings on the contributions are generally tax free (certainly at a lower rate than savings accounts and CDs).

      Roth IRAs can be invested in many ways, including stocks and mutual funds. As with all types of investments, there is a certain amount of risk. Invested wisely, however, earnings can exceed those from traditional Savings Accounts. Mutual funds are generally considered to be safer investments than stocks as fund managers invest in groups of stocks with certain goals in mind. As individual stocks decrease in performance, the fund manager will replace it with a better performing stock. Some investors choose to invest in aggressive (more risky) funds which can yield higher earnings early in their career. As they approach retirement, the move is made to more conservative funds which still will yield earnings, but at a lower rate (but are less likely to lose their value). Some funds are set up to automatically achieve the goal of moving from aggressive funds to conservatives based on investment goals. In such a fund, you would continue investing in the same fund and over time the fund manager would transition from aggressive to conservative investing.

      How much you invest will depend on your current age, your expected retirement age, and how much you think you will need to live comfortably. Since there is a yearly limit for investing in a Roth IRA, you won’t be able to play catch-up later for smaller investments now. If you can afford it, invest in the following order: 1) A 401(K) plan with pre-tax dollars (allows you to invest while lowering your salary amount, resulting in you being taxed at a lower rate) 2) A post-tax retirement plan like a Roth 401(K) or Roth IRA. If your company offers company matching, put as much into the company retirement plan as they will match. Put the excess into the Roth plans. If you still can afford to invest, you can decide whether to contribute more into the 401(K) or a separate taxable investment plan such as stocks, bonds, or mutual funds.

      There are calculators on the internet which can be used to determine how much you should invest to meet a future goal. One tool, available at http://finance.yahoo.com/calculator/retirement/ret-02 lets you enter a number of assumptions such as current salary, the percentage of your salary you expect to have at retirement, and the number of years you expect to spend in retirement. The tool will then calculate how much you would need to save each year to meet your goal. Keep in mind that the required savings amount could consist of funds that you contribute to retirement plans and IRAs as well as earnings on those amounts.

      This should give you a decent start. There is a lot to investing, but it is never too late to get started. If you are able, it would be a good idea to schedule an appointment with an investment professional to discuss your long term goals.

      Happy Investing!

48. QUESTION:
    can i pass the money that i have on my roth IRA to a CD?
    Are there any tax consequences?

    • ANSWER:
      You can actually keep the money in your Roth IRA in a CD or savings account. It doesn’t necessarily have to be invested.

49. QUESTION:
    I want to invest with an IRA or CD account. Options?
    I have several thousand dollars with fidelity investment’s that are a combination of stock, and bonds. I am not experiencing any growth whatsoever. I want to put all of it into a Cd or account of sort while earning a MONTHLY interest return of 2% if possible at the very least. How or what should i look into? Some places have yearly returns if that makes sense, where the interest is given at the end of the year. I want a monthly return. Any suggestions?

    • ANSWER:
      Whoa ! A combination of stocks and bonds is not growing whatsoever ? Are you talking about one mutual fund? Or have you picked the stocks and bonds yourself?
      …and how long have you held them? The last six months has not been any kind of indication what a fund will do for you over a longer term…if you’ve only held it a short time, try to wait it out ( most funds are coming back from a miserable Jan/Feb.
      If you absolutely want to get out of that fund ( or those stocks/bonds)… Seeing as you are already with Fidelity, I suggest that if you want to see a monthly increase and want a stable up-trending fund…look at FNMIX. It’s invested in bonds/financials in the growing markets of the world. Your holdings pay monthly dividends in the form of more shares… and even though the share price may go up only a few cents a month, the mere fact that you also get more every month begins to add up nicely in eight or nine months.
      … and if you hold for some years you will actually get to the point where you have earned more shares monthly than what you originally paid for! I have the fund in two different accounts…and one held four and a half years has more than doubled.
      If you want MORE than average monthly returns look to HTE… a Canadian oil/gas company…. their shares are priced about $ 22.00 each and pay a MONTHLY dividend of 30 cents per share. That does not sound like much…but look at it like this: 100 share would cost you $ 2200. and pay monthly . or $ 360. per year…which amounts to 16.3% !!
      No bank, no CD will give you a return like that. ( BUT…next April the shares could be worth only $ 19.00 so you you are taking a risk)
      FNMIX…fairly safe..decent return.
      HTE..some risk…better return
      Your call.

50. QUESTION:
    What’s the cap on 2009 IRA CD’s?
    What is the maximum amount you can contribute to an IRA CD for tax year 2009? Thanks!

    • ANSWER:
      The IRA contribution limit for 2009 is 100% of earned income (wages, net self-employment income, etc.) or ,000 (k if you’re age 50 or older), whichever is less. What you choose to invest in is irrelevant.

      Disclaimer. The information in this response is for general purposes only, and shall not be construed as specific tax, legal, or investment advice for any individual. The questioner is urged to contact their own professional advisers before implementing any tax or investment strategy