Traditional IRA

If you work and earn an income, there's no better way to save money for retirement and take advantage of federal income tax savings than by opening up an Individual Retirement Account.

A traditional IRA program allows you to defer taxes on your earnings until you withdraw the funds. Depending on your own tax situation, you may be able to receive a tax deduction for this type of deposit. Once you reach the age of 70 ½ you will need to begin withdrawing funds.

Roth IRA

The new ROTH IRA provides tax-free earnings on non-deductible, after-tax contributions.

This IRA, which allows all earnings to grow tax-free, is gaining popularity because there is no age at which you must start distributions from the account. Another big advantage is that distributions of funds held for at least five years will be tax-and penalty-free for the following reasons:

1. After 59 ½ years of age
   
2. Disability
   
3. Death
   
4. First-time home purchase

Since you'll be paying taxes on contributions now, instead of at retirement, a Roth IRA could be a wise choice for anyone who expects his/her tax bracket to be about the same-or even higher after they retire.

*APR= annual percentage rate

Rates subject to change without notice.