Certificates & IRAs
Saving for a secure future.
Maybe you’ll finish writing that novel, help the grandkids pay for college, or open the shop you’ve always dreamed of.
Or may be you’ll just spend more time with family.
What will you do once you have enough money? We know you have big dreams. We offer investments to help you reach them.
With a certificate or IRA from BCU, you’ll get steady, competitive returns. (In fact, we offer some of the highest dividend earnings you’ll find anywhere.)
And, unlike risky investments, our certificates and IRAs are secure: they’ll be there when you need them.
We offer:
Certificates - Great rates, flexible terms
With just $500, you can open a certificate with very competitive earnings, and terms ranging from 90 days to 60 months. We also offer occasional special certificates with terms of 3, 6, 12, 13, 24, 36 or 60 months.
You can have your monthly dividends “roll over”
(automatically added to your certificate balance each month). Or, you can receive your dividend earnings each month by mail, or we can deposit them into the account of your choice.
Individual Retirement Accounts (IRAs) - Securing your future
We offer very competitive rates, no maintenance fees, and low minimum deposit requirements - so you can get started sooner. If you have direct deposit, you can even make automatic contributions.
There are many options to choose from, and following is information on the different types of IRAs to help you decide which is right for you.
But if you have questions or need help, just stop by or call us – and we will be glad to assist you.
Traditional IRA
Any individual with earned income can contribute to a Traditional IRA - and may be eligible to claim contributions on their income taxes.
Tax Treatment of Contributions
Contributions will be fully tax-deductible on current income taxes for:
- Individuals who are not covered under an employer-sponsored retirement plan (even if they have spouses who are)
- Individuals who are active in a retirement plan, and whose Modified Adjusted Gross Income (MAGI) is less than $50,000 (single, or married filing separately) or $80,000 (married, filing jointly)
- Married individuals who are not active in employer retirement plans, with spouses who are, as long as your MAGI is $150,000 or less
Note: if your income exceeds the above limits, you may be able to deduct an amount that is less than the maximum amount that can be contributed.
Deadline for Contributions
The deadline for making contributions that qualify for the given tax year is April 15th of the following year.
Annual Contribution Limit
Either $4,000 or 100% of your compensation, whichever is less. Total contributions to a combination of Traditional and Roth IRAs cannot exceed this amount in one year, unless you are age 50 or older. In that case, you can contribute $1000 more each year.
Tax Treatment of Distributions
You will not pay taxes on your Traditional IRA until you withdraw your funds (for example, upon retirement). At that time, funds will be taxed at the ordinary income tax rate.
Early Withdrawal Tax
A 10% premature distribution penalty applies, unless the distribution is:
- made after age 59 1/2
- due to death/disability
- part of a substantially equal periodic payment
- to pay certain medical expenses
- to pay medical insurance premiums while unemployed
- to purchase a first home
- to pay higher education expenses for yourself only
Roth IRA
You are eligible for full contribution to a Roth IRA if you meet the following Adjusted Gross Income criteria in a tax year:
- Married, filing jointly - $150,000 or less
- Single - $95,000 or less
You can make partial contributions if you meet the following Adjusted Gross Income criteria in a tax year:
- Single - $110,000 or less
- Married, filing jointly - $160,000 or less
Tax Treatment of Contributions
All contributions are made on an after-tax basis and cannot be claimed as deductions from current taxes.
Deadline for Contributions
The deadline for making contributions that qualify for the given tax year is April 15th of the following year.
Annual Contribution Limit
Either $4,000 or 100% of your compensation, whichever is less. Total contributions to a combination of Traditional and Roth IRAs cannot exceed this amount in one year. If you are age 50 or older, you can contribute $1000 more each year.
Tax Treatment of Distributions
You can make withdrawals, tax-free. Your earnings will also be tax-free if the distribution is made after the fifth tax year since first contribution was made to the Roth IRA, and the distribution is made after age 59-1/2, due to death or disability, or to purchase a first home.
Early Withdrawal Tax
A 10% premature distribution penalty applies, unless the distribution is:
- made after age 59 1/2
- due to death/disability
- part of a substantially equal periodic payment
- to pay certain medical expenses
- to pay medical insurance premiums while unemployed
- to purchase a first home
- to pay higher education expenses for yourself only
Coverdell Education Savings Account
Contributions can be made by an individual, such as a parent or grandparent of the designated child, who is under the age of 18.The contributor must meet the following Adjusted Gross Income criteria in a tax year:
- Married, filing jointly - $190,000 or less
- Single - $95,000 or less
Tax Treatment of Contributions
All contributions are made on an after-tax basis and cannot be claimed as deductions from current taxes.
Deadline for Contributions
The deadline for making contributions that qualify for the given tax year is April 15th of the following year.
Annual Contribution Limit
$2,000 per qualified child per tax year. This can be made over and above the maximum annual contribution to traditional and Roth IRAs.
Tax Treatment of Distributions
Distributions are not taxable if the distribution is used in the tax year to pay qualified education expenses for the child, such as:
- Elementary and secondary school expenses
- Public, private and parochial school expenses
- Expenses for special needs students
- Post-secondary tuition
- Fees, books, supplies and equipment
- Certain room and board expenses
Application of 10% penalty tax
Distributions that exceed educational expenses for the year, or are made for reasons other than to pay qualified educational expenses, are included in the child's gross income. This amount is subject to a 10% penalty tax unless the distribution is:
- Due to death of the child;
- Due to disability of the child; or
- Due to a scholarship payment received
