Personal CDs, IRAs, and HSAs

Certificates of Deposit
With as little as $500, you can invest in a Certificate of Deposit (CD) that will earn a guaranteed rate of return for the term of the CD. The interest rate for your CD will be based on current market conditions and the term you choose.

Traditional Individual Retirement Account
Traditional IRAs provide a retirement vehicle with tax-deferred earnings. You can contribute up to $5,000 of your earned income ($6,000 if you are age 50+). Anyone with earned income can contribute to an IRA, and your contributions may be tax deductible. For more specific information about Traditional IRAs, please refer to the CD, IRA, and HSA Options Chart below.

Roth Individual Retirement Account
Roth IRAs are similar to Traditional IRAs in several ways. Both types of IRAs let you invest money into a tax-deferred account, and both have the same contribution limits. However, with a Roth IRA, the money you deposit is not tax-deductible. When you begin making withdrawals from your Roth IRA, you pay no federal income tax on qualified withdrawals. The Options Chart provides more information about the differences between Traditional and Roth IRAs.

Coverdell Education Savings Account
A Coverdell Education Savings Account (formerly known as the Education IRA) lets you save tax-deferred for education expenses. Anyone can contribute on behalf of a child under the age of 18…parents, grandparents, aunts, uncles, even family friends. The money grows tax-deferred until the money is withdrawn, and qualifying withdrawals are tax-free. Please refer to the Options Chart for more specific details.

Health Savings Account
Health Savings Accounts (HSAs) offer a different way to save for and pay for certain medical expenses that you may incur. It is a tax-exempt trust or custodial account that you set up with BankEast, which is a qualified HSA trustee. Your HSA is subject to rules similar to those that apply to IRAs. HSAs have the benefit of allowing you to pay for qualified medical expense on a tax-free basis. Unused funds may accumulate tax-free from year to year, as there is not a requirement to distribute funds from your HSA.

To qualify for an HSA, you must be a participant in a High Deductible Health Plan. Click here for a Health Savings Account fact sheet that will answer many of your questions. For complete information on how much you qualify to contribute to an HSA, what expenses are reimbursable, and how to use the account, talk to your Personal Banker.

Simplified Employee Pension Plan (SEP IRA)
SEPs are retirement accounts designed for small businesses or self-employed persons. The employer makes tax-deductible contributions directly to the IRA of all eligible employees. Since SEPs are considered employer-sponsored plans, you may also open a Roth or Traditional IRA as long as you meet the guidelines shown below for those products.

CD, IRA, and HSA Options

Product Name	CDs	Traditional IRA	Roth IRA	Coverdell Education Savings Account (CESA)	Simplified Employee Pension Plan (SEP IRA)	Health Savings Accounts (HSAs)
Minimum Opening Deposit	$1,000	$500	$500	$100	$500	$0
Annual Contribution Limit Per Individual Owner/Beneficiary	Unlimited	100% of income, up to $5,000 $6,000 per person age 50 or older	100% of income, up to $5,000 $6,000 per person age 50 or older	$2,000 per child per year Contributions may be made until child reaches age 18 Contributions are considered separately from IRA contributions	25% of $245,000 or $49,000, whichever is less	Individuals,$3,050 Families, $6,150 If age 55 or older by 12/31/10, may contribute an additional $1,000
Eligibility Requirements	Available to individuals and joint individuals with SSN and to businesses and other entities with an EIN	For Deductible IRA •Must have earned income •Special deduction rules for married filing jointly •For single active participant, deduction is phased out with MAGI of $55,000 to $65,000 •For married filing jointly, active participant, deduction is phased out with MAGI of $89,000 to $109,000 •For married filing jointly, not an active participant but spouse is, deduction is phased out with MFGI of $166,000 to $176,000	Available to those who don't qualify for deductible IRA. Also an alternative for those who do qualify for a deductible IRA Income Limit •Contributions phased out for singles with MAGI of $105,000 to $120,000 •Contributions phased out for married couples filing jointly with MFGI of $166,000 to $176,000	Income Limit •Contributions phased out for single donors with MAGI of $95,000 to $110,000 •Contributions phased out for married filing jointly with MAGI of $190,000 to $220,000	•An IRA must be opened by (or on behalf of) each eligible employee •Contributions are required for eligible employees even after reaching age 70½	•Must be covered under an HDHP •Cannot have other health coverage that is not an HDHP •Cannot be enrolled in Medicare •Cannot be claimed as a dependent on someone else’s tax return
Withdrawal Limits	Penalty for early withdrawal	Must be age 59½ to begin withdrawals without penalties Penalty for early withdrawal Exemption from tax penalties •Owner death or disability •Qualified medical expenses •Qualified health insurance premiums •Higher education expenses •First-time home purchase •NOTE: IRS Form 5329 must be filed for exemption Distributions must begin at age 70½	For Tax-Free Withdrawals •Account must have been open for five years •Owner must be age 59½ Exemption from tax penalties •Distributions for education, medical, and first-time home purchase •NOTE: IRS Form 5329 must be filed for exemption Offers greater flexibility and simplicity in planning distributions No elections to be made when owner reaches 70½ No required distributions Contributions permitted after age 70½	Distributions for primary, secondary and college educational expenses.	Must be age 59½ to begin withdrawals without penalties Penalty for early withdrawal	Withdrawals allowed for qualified medical expenses only
Tax Requirements	N/A	10% IRS penalty for withdrawals before age 59½ If qualified for a deductible IRA, may take a tax deduction If not qualified for a deductible IRA, contributions will be tax deferred	Withdrawals are tax-free if certain conditions are met		10% IRS penalty for withdrawals before age 59½	Excess contributions are subject to 6% federal excise tax 10% IRS penalty if HSA funds are used to pay for non-qualified expenses
Other Features	Various rates and terms Automatically renewable May be used as collateral for loan	Various rates and terms Deposits of $25 or more may be made anytime during term	Various rates and terms Deposits of $25 or more may be made anytime during term	Various rates and terms Deposits of $25 or more may be made anytime during term	Various rates and terms Deposits of $25 or more may be made anytime during term	Debit card and checks available Free Online Banking and Bill Payment