Individual Retirement Accounts

Individual Retirement Accounts (IRAs) are special-purpose savings plans created by the federal government to help you build funds specifically for your retirement.  The two most common types of IRAs are Traditional IRAs and Roth IRAs.

Traditional IRAs allow you to make contributions that may be tax deductible.  The tax deductibility of the contributions depends on whether you were covered by a retirement plan at work and the amount of your adjusted gross income for the year. The interest that is earned on Traditional IRAs is not taxable to you until you withdraw it. This helps your money grow much faster than in a comparable, taxable investment.

Roth IRA contributions are not tax deductible but, if you satisfy certain requirements, distributions may not be subject to taxes.  Other differences between Roth IRAs and Traditional IRAs are that Roth IRA contributions may be made after you reach age 70 ½ and you can leave amounts in your Roth IRA as long as you live.  With Traditional IRAs you are required to begin taking distributions from you IRA after you reach age 70 ½.

Contributions to IRA Accounts may be made anytime during the year.  You may also make contributions up until your tax due date, which is usually April 15, and classify the contributions as being made for the prior year.

If you currently have an IRA at another institution, you can move your Individual Retirement from one institution to another without a tax penalty. Just because you open your account at one institution doesn't mean you have to keep it there until retirement. The Bank of Hindman offers competitive IRA rates. If you have an IRA at another institution, give us a call to compare rates.

If you recently changed jobs and have a Pension or Profit Sharing plan that you wish to transfer to an IRA Account, we will be more than happy to assist you.

  Traditional IRA - Pay taxes later Roth IRA - Pay taxes now
Benefits
  • Your contributions may be tax-deductible provided you meet the eligibility requirements
  • Earnings and tax-deductible contributions are taxed as ordinary income only when withdrawn
  • Contributions are made using after-tax dollars, but funds you withdraw in retirement may not be subject to federal taxes
  • Pay no taxes on earnings withdrawn after age 59 ½ and after you've had the account for 5+ years
Who can invest? Anyone earning income and under 70 ½ 2017: Anyone with an adjusted gross income of $133,000 or less ($196,000 or less for joint tax filers)
Maximum Annual Contribution 2017 tax year: $5,500 ($6,500 ages 50+)

Competitive Fixed Rates

IRA Length Current APY* Current Semi-Annual Interest Rate*
1 Year 1.00% 1.00%
2 Years 1.25% 1.25%
3 Years 1.51% 1.50%
* All interest rates and annual percentage yields (APY) indicated are accurate for only and are subject to change without notice.
Additional Features and Benefits
Secure Online Access
  • 24/7 account access
  • View balances and statements
  • Receive balance alerts
  • Manage all of your finances
Online Money Management Tools
  • Financial Tracking and Analysis
Individual Retirement Accounts