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Personal Banking - CDs and IRAs

Certificates Of Deposit

A Certificate of Deposit is a low-risk way to earn a higher interest rate.  Generally speaking, CDs offer a fixed sum of money for a fixed period of time. Usually, the more the money and the longer the term, the higher the rate of interest.  CDs are federally insured to $250,000.  And they're easily converted to cash.   But early withdrawal can mean substantial penalties. 

Less-Than-6-Month CDs

Here's an intelligent way to maximize interest earnings on a short-term commitment involving deposits of $7500 or more.  Hendricks County Bank offers competitive returns on "time
accounts" with maturity dates of less than six months (one to 181
days).

  • Higher fixed interest rate for a short-term investment
  • Maturity date set for one to 181 days
  • $7500 minimum opening deposit (no additional deposits allowed before maturity date)
  • Automatically renew the CD at maturity, or withdraw the funds (automatic renewal certificates have ten calendar days after maturity to withdraw funds without penalty)
  • There are no maintenance fees

6- and 12-Month CDs

These popular Certificates of Deposit pay attractive interest rates for funds on deposit for relatively short periods of time.  12-Month CDs pay a higher rate of interest than the six-month CD---and if interest is allowed to compound, income on the 12-month term will be significantly higher.  

  • $2500 minimum opening deposit
  • Interest may be compounded monthly, or paid directly to you by check, or deposited each month in another account
  • Automatic renewal, or withdraw funds (automatic renewal certificates have ten calendar days after maturity to withdraw funds without penalty)
  • There are no maintenance fees

Longer Terms, Higher Interest

Almost anyone can own a higher interest-bearing Certificate of Deposit from Hendricks County Bank.  A minimum deposit of $500 will open your new CD!  And, you can choose a maturity date that best meets your ability to commit funds for a defined period of time.  Maturity terms range from 18 months to 60 months.  Generally speaking, the longer the term---the higher the interest rate. 

  • $500 minimum opening deposit
  • 18-month, 24-month, 30-month, 36-month, 48-month or 60-month maturity terms
  • Interest may be compounded monthly, or paid directly to you by check, or deposited each month in another Hendricks County Bank account
  • Automatically renew the account, or withdraw funds (automatic renewal certificates have 10 calendar days after maturity for withdrawal without penalty)
  • There are no maintenance fees

Individual Retirement Accounts (IRAs)

These are special accounts---with special incentives---designed to encourage people to save money for their retirement years.  There are two types of Individual Retirement Accounts:  Traditional IRAs, and Roth IRAs.  Both offer tax advantages.

Traditional IRAs

The money you deposit in a Traditional IRA can lower your taxable income.  It is tax-free, fully deductible.  What's more, interest earned during the term of the account is tax-free also.  Taxes on these earnings are paid later---after you've retired---when you make withdrawals from the account.  Since retirement years figure to be periods of lower income (which means a lower tax bracket), your eventual tax on the monies should be considerably less.

  • All workers and their spouses under the age of 70½ who have earned compensation or received alimony may contribute
  • Contributions are made with "pre-tax" income, reducing gross taxable income
  • $500 minimum opening deposit.
  • 18-month or 36-month terms

Contributions are FULLY DEDUCTIBLE if your employer does not have a retirement plan.

  • They are NONDEDUCTABLE if you are covered by an employer retirement plan and have a modified adjusted gross income above $60,000 ($85,000 married filing joint)
  • They are PARTIALLY DEDUCTIBLE if your modified adjusted gross income is $50,000-60,000 ($75,000-85,000 filing joint)
  • If you are under age 50, each individual can contribute up to $5000 in 2009; if you are over age 50, you can contribute up to $6000 in 2009.

Roth IRAs

A Roth IRA has tax advantages that are different from Traditional IRAs.  Instead of tax-deferred contributions, Roth IRAs require holders to pay income tax on funds deposited.  Instead, Roth IRA proceeds are tax-free at the time of withdrawal.  Meanwhile, Roth allows annual contributions to continue after age 70½.

  • No age restrictions to open or continue making contributions
  • Even if you are covered by an employer retirement plan, you can own a Roth IRA
  • $500 minimum opening deposit
  • Full eligibility if income is less than $95,000 individually or $150,000 filing jointly
  • No eligibility if income is more than $110,000 individually or $160,000 filing jointly
  • Contributions are taxed as income
  • Monies withdrawn after age 59½ are tax-free (there may be penalties if funds are not in the Roth account for at least five years)
  • If you are under age 50, each individual can contribute up to $5000 in 2009; if you are over age 50, you can contribute up to $6000 in 2009.

Primetime IRAs

Hendricks County Bank offers the Primetime IRA to make retirement savings affordable for everyone-especially individuals and couples who want to start "planning ahead" while keeping contribution requirements at an absolute minimum.

  • Open your Primetime IRA with as little as $100.
  • Add to retirement savings with deposits as low as $25.
  • Earn a market-based variable interest rate-so you'll continue to receive excellent interest income as rates trend upwards.

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