IRA & Education Savings
Saving for your retirement or for education expenses is easy with an Individual Retirement Account or Education IRA from Blue Flame Credit Union.
Share or Certificate Individual Retirement Accounts
When you open an IRA with Blue Flame, you have the option of choosing a Savings Account or a Certificate Account as the saving method. The rate on certificates is generally higher and is guaranteed for the full term.
| Account | APY* | Min. Balance** |
|---|---|---|
| IRA | 0.75% | None |
Regular Shares, Youth Shares and Young Adult Shares earn dividends quarterly. Christmas, Vacation and IRA Savings, and Checking Accounts earn dividends monthly.*APY = Annual Percentage Yield**Minimum balance before dividends can be earned.†Accounts have a minimum AVERAGE daily balance required before dividends can be earned.
| Term | APY* | Min. Balance** |
|---|---|---|
| 3 Months | 2.50% | $500 |
| 6 Months | 2.75% | $500 |
| 12 Months | 3.00% | $500 |
| 18 Months | 3.05% | $500 |
| 24 Months | 3.10% | $500 |
| 36 months | 3.25% | $500 |
| 48 Months | 3.30% | $500 |
| 60 Months | 3.50% | $500 |
*APY = Annual Percentage Yield. †IRA Certificates can be used as Traditional or Roth IRAs, or for Coverdell Education Savings. Early withdrawal penalties apply to certificates. Dividends are compounded and paid monthly.
Traditional, Roth or Educational IRAs
There are a few options to consider when deciding the type of IRA to open. Your decision will be based how and when you intend use your account funds, with consideration given to how the account will affect your federal tax return.
Traditional IRA
Choose a Traditional IRA if you want the tax deduction right now. It also makes sense if you anticipate paying taxes at a significantly lower rate in retirement. To open a Traditional IRA, you must meet the following requirements:
- Income from compensation or file jointly with a spouse earning compensation.
- Recipients of a distribution from qualified retirement plan, proceeds of plan can be rolled into an IRA.
- Maximum Contribution for members under age 50 is $6,500.
- Maximum Contribution for members age 50 and above is $7,500.
- Contribution Limitations apply—some contributions are tax deductible.
- Earnings are tax deferred until withdrawn.
- Withdrawals can be made for certain expenses such as first time home purchases and higher education expenses.
Roth IRA
Choose a Roth IRA if you don’t need the tax break right now. The most attractive feature of a Roth IRA is the potential for earning dividends tax-free. It’s also a flexible investment option because you can withdraw regular contributions at any time — tax-free and penalty-free — and you do not have to take mandatory distributions at age 70½.
- No limitation on age, but limitations on income from compensation apply.
- Maximum Contribution for members under age 50 is $5,500.
- Maximum Contribution for members age 50 and above is $6,500.
- Contribution Limitations apply—no contributions are tax deductible.
- Earnings are tax-free if account is open 5 tax years and withdrawals are for qualified reasons.
- Withdrawals at age 70½ are not mandatory.
- Regular contributions can be withdrawn tax- and penalty-free at any time.
- Earnings may be withdrawn tax- and penalty-free after five tax years for qualifying reasons.
Education IRA or Coverdell Education Savings Account
These educational savings options can allow you to earn dividends tax-free for qualified education expenses.
- No limitation on age, but limitations on income from compensation apply.
- Maximum Contribution of $2,000 per child each year.
- Contributions not allowed after beneficiary reaches age 18 (some exceptions apply).
- Contributions are not tax deductible.
- Withdrawals for certain qualified education expenses are tax-free.
- Funds can be transferred from one child’s account to another child in the family.
Consult your tax advisor for the best IRA or Education Savings option for you and your family.
