IRA
An IRA (individual retirement account) is a form of retirement plan that offers certain tax advantages. Use an IRA to start saving for retirement or to supplement what you're already saving. The money in your UGEFCU Traditional or ROTH IRA is federally insured, unlike the stock market. Inquire about rollovers and direct transfers today.
Certificate Of Deposit
A Certificate of Deposit is a term deposit. You deposit the money for a set period of time, usually between six months and three years, and in return, you receive a higher interest rate than a traditional savings account. It's a simple way to boost your savings and prepare for your financial future.
Comparison Example - $1,000 deposit in savings for one year vs. a one year certificate
| Deposit Amount | Rate | Earnings |
|---|---|---|
| $1,000 | 0.35% | $3.50 |
| $1,000 | 3.84% | $38.96 |
So, if you know you won't need the money for a year, you will make more money by depositing in a certificate. But remember, you are promising to keep the money in the certificate for the term you choose.
With a savings account, you can add money to it whenever you want but you cannot add money to a certificate until it matures. If you deposit your money in a certificate there will be an interest penalty if you withdraw it before the maturity date.