IRAs
Grow your savings tax-free
IRAs
Grow your savings tax-free
A tax-advantaged savings account
Storing money in your sock drawer won’t cut it for a secure future. An IRA provides a tax-advantaged option for retirement savings. Members can contribute up to a set amount each year based on their age, paving the way for a fruitful retirement ahead.
IRAs
- Traditional IRAs
- Roth IRAs
- Coverdell Education Savings Accounts
- Maximum contribution limits apply
Saving for Retirement? Three Tax Strategies to Consider
Make switches from your Traditional IRA to your Roth IRA
Your IRA, whether it’s Roth or Traditional, is where you should maximize your retirement savings. The choice between the two depends on your situation. If you’ve faced income losses like job loss or reduced hours, consider shifting to a Roth IRA this year. This allows you to pay taxes at a lower rate now and benefit from tax-free growth in the future.
Contribute to Your Employer’s 401(k) Program
Employer-sponsored 401(k) programs often match a portion of your contributions, leading to significant savings. Don’t pass up free money! Check your company’s plan to explore the benefits it provides for you.
Look into the Tax Saver’s tax credit
When filing your taxes, remember to explore the Tax Saver’s Credit. It provides varying tax breaks depending on your income and savings level, including contributions to retirement accounts like IRA and 401(k) that could result in substantial tax deductions.
Rates & Calculator
Traditional & Roth IRAs & Education Savings Account
| Balance of $100 and Over | 0.30% APY* |
*APY = Annual Percentage Yield. APY is accurate as of January 1, 2025, and may change after the account is opened. Dividends are calculated on the daily balance during the dividend period and paid to the account monthly. Fees or other conditions could reduce the earnings on the account. Payment of dividends is subject to the availability of earnings.
Certificates & IRA Certificates
| 3.82% APY* | 6 months |
| 4.25% APY* | 6 months ** |
| 4.07% APY* | 12 months |
| 2.78% APY* | 24 months |
| 2.27% APY* | 36 months |
| 2.53% APY* | 48 months |
| 2.53% APY* | 60 months |
*APY = Annual Percentage Yield. APY accurate as of January 1, 2025. The Dividend Rate and APY may change without notice at the discretion of United Texas CU management. A penalty will be imposed for early withdrawal. A withdrawal of all or any portion of the principal prior to maturity will cause automatic termination of the Certificate Account. For a Certificate with a term of one year or less, the penalty will be equal to 30 days’ worth of dividends, whether earned or unearned, which could reduce the principal balance of the Certificate. For a Certificate with a term over one year but less than three years, the penalty will be equal to 60 days’ worth of dividends, whether earned or unearned, which could reduce the principal balance of the Certificate. For a Certificate with a term of three years or more, the penalty will be equal to 90 days’ worth of dividends, whether earned or unearned, which could reduce the principal balance of the Certificate.
**The minimum balance to earn the advertised APY is $25,000 for a 6-month term at the higher rate and $500 for all other Certificate terms.
Frequently Asked Questions
The difference between them is the timing of the tax breaks you receive.
Contributions to a traditional IRA are tax deductible, and withdrawals in retirement are taxed as income.
Contributions to a Roth IRA, on the other hand, are taxed, but earnings and withdrawals in retirement are not. Which one is best for you depends on if you expect your income tax rate in retirement to be higher or lower than it is today.
Anyone under the age of 70 ½ who earns a taxable income can open and contribute to a traditional IRA. Roth IRAs have an additional income restriction. In 2024, single tax filers must have an income below $161,000, and married couples filing taxes jointly must have an income below $240,000 to contribute to a Roth IRA.
In 2024, for individuals under 50, the limit is $7,000 annually. People over 50 can contribute an additional $1,000 annually.
Yes, the direct deposit will go into your savings and be automatically transferred into your IRA.
A regular IRA or certificate IRA at United Texas CU has no costs associated with it.
If you open an IRA with a brokerage firm or mutual fund company, look to the investment’s underlying expenses, including operating expenses and commissions. Then, look to whether the investment is managed by a financial professional. A good rule of thumb is to look for an IRA with fees below 1 percent.
You can only contribute to an IRA for a spouse, and only if you file a joint tax return.
You can withdraw from your IRA for retirement, or earlier if you are a first-time home buyer or paying for higher education for yourself, your spouse, your children, or your grandchildren.
You can begin to take penalty-free distributions from your IRA at age 59 ½, as long as you made the first contribution at least five years earlier if you have a Roth IRA. Traditional IRAs require you to begin taking a required minimum distribution (RMD). Roth IRAs do not.
There has been a change in RMD rules effective January 1, 2023:
- IRA owners who attained age 72 on or before December 31, 2022, will continue to be required to take their RMDs for 2022 and 2023 and beyond.
- IRA owners who attain age 72 in 2023 are not required to take their first RMD until the year in which they attain age 73.
If you are a first-time home buyer, you can withdraw up to $10,000 from a traditional IRA without penalty as long as it covers qualified expenses. You will, however, need to pay taxes on it. But if you have a Roth IRA, you can withdraw up to $10,000 without needing to pay any taxes on the investment earnings, as long as you made the first contribution at least five years earlier.
All Roth IRA contributions can be withdrawn penalty-free and tax-free at any time at any age because you already paid taxes on them, but this doesn’t apply to the earnings.
