Individual Retirement Accounts (IRAs)

Perfect for those members planning for the future, an OFCU Individual Retirement Account is a lifetime commitment. There is only a $5.00 minimum deposit required, but regular deposits to this account can help ensure your future security. Dividends paid on this account are typically higher than many other deposit products.

Traditional IRA*

A Traditional IRA is a special tax-favored savings account. It allows for tax-deductible contributions for most people. For tax info consult a tax advisor. Earnings are not taxed until you begin to withdraw from you IRA.

Roth IRA*

Unlike a Traditional IRA, contributions to a Roth IRA are not tax-deductable. The advantage of a Roth IRA is when you withdraw from the account, neither your contributions or gain/earnings are subject to Federal Income Tax. As long as certain conditions are met.

Coverdell IRA*

Also known as the Education IRA, the Coverdell Education Savings Account (ESA) is a type of tax-advantaged savings account. This type of IRA is specifically for paying qualified higher education expenses. Contributions are non-deductible, earnings are tax-deferred and distributions are tax-free if used to pay for qualified education expenses.

To avoid tax consequences from the withdrawal, you must use the funds to pay qualified expenses for (the IRA's designated Beneficiary) your child before he/she reaches age 30.


*Early Withdrawal Penalty:

In order to avoid tax penalties by the IRS, you must wait until you attain the age of 59-1/2 to withdraw funds or be able to demonstrate your withdrawal is being used for qualified higher education expenses or a first-time home purchase. Roth IRA holders must also satisfy a minimum five- year holding period. If a person takes funds out of an IRA before age 59-1/2 for purposes other than qualified higher education expenses or the first-time purchase of a home, this is a "premature" distribution and a 10% penalty may be assessed by the Internal Revenue Service (IRS). Premature distributions are also subject to income tax. There are some additional, special circumstances such as death, permanent disability, mental incompetence and certain medical expenses that allow funds to be withdrawn without a 10% premature penalty. After age 59-1/2, an individual can withdraw funds whenever requested and in any amount without incurring tax penalties.