IRA Accounts

Thinking of opening or adding to your IRA?
Pacific Trust Bank offers high-yielding IRA Certificate of Deposit and IRA Money Market accounts. 

Individual Retirement Account (IRA) - includes Traditional IRAs, Roth IRAs, Education IRAs. They are a type of interest-earning retirement savings account in which the allowable contributions and earnings are not taxed until the funds are withdrawn, usually after age 59 1/2. Since the investments are not taxed, they can grow more rapidly and benefit from the power of compounding until they are withdrawn. IRA contributions may be fully or partially tax deductible. Click Here for more information about IRAs.

IRA Money Market Account 

The IRA Money Market Account is great as a temporary place for accumulating IRA funds prior to placement in higher-yielding term IRA Certificates, transfer to another IRA custodian, or in anticipation of mandatory annual IRA distributions.

You get the flexibility, higher interest rates and the safety of principal you need. You have immediate access to move your IRA funds into a IRA CD or other IRA custodian account with no bank-imposed withdrawal penalties.

Earn higher yields based on a tiered rate. The larger the balance, the higher the interest rate. See our Savings Rates for current IRA Money Market tiered interest rates and Annual Percentage Yields.

For more information, see our Account Handbook and Truth-In-Savings IRA Money Market Account terms.

IRA Certificates of Deposit 

Certificates of Deposit are our most popular IRA savings option. They allow you to lock in high Annual Percentage Yields while keeping money on deposit for a fixed period of time. We offer a wide range of terms (from three months to five years), and our interest rates are among the best in the area.

The minimum Certificate account balance is $500, but certificate interest rates are tiered. Earn higher Annual Percentage Yields (APYs) by combining funds into one or more larger-balance certificate accounts.

Pacific Trust Bank will waive any early withdrawal penalty on IRA certificate accounts within a Retirement Plan if one of the following exceptions for IRA withdrawals applies: (1) You have reached age 70 ½; (2) You have reached age 59 ½ and are taking a prearranged schedule of systematic payments; (3) Death, disability, or legal incompetence occur; or (4) You convert the CD to a Roth IRA at Pacific Trust Bank.

See our Account Handbook for Truth-In-Savings IRA Certificate of Deposit account terms.

IRA - General Information 

An IRA (Individual Retirement Account) offers an economical way to save for your retirement by allowing you to invest without paying taxes on the IRA until you begin to make withdrawals. Pacific Trust Bank offers IRA Certificate of Deposit accounts for all types of IRAs, and IRA Money Market Accounts for both traditional IRA funds and Roth IRA funds.

While the information below is believed to be accurate, tax laws change from time to time. Please ask us about current IRA contribution limits, and consult your tax advisor before making any IRA investment. 

The new Individual Retirement Accounts (IRA) are all the rage and for good reason. The accounts offer tax-free withdrawals, tax-deferred earnings or tax-deductible contributions. IRAs give you the opportunity to save without Uncle Sam dipping into your pockets. Which IRA product is best for me? Review our comparison chart for more information.

What are the benefits of saving with an IRA?

• You receive a higher interest rate by saving with an IRA.
• Monthly deposit amounts are flexible and contributions are not mandatory.
• You may withdraw your principle at any time. However, the distribution may be subject to an early withdrawal penalty.
• Early distribution penalties may be waived for medical, first time home buying and college expenses.

Types of Individual Retirement Accounts

Roth IRA 

There's been a lot of hype about the new Roth IRA, but here are the details. The Roth IRA is a tax-free way to earn on your savings for retirement. With a Roth IRA you can:

• Withdraw your contributions tax-free and penalty-free at anytime;
• Withdraw your distributions at retirement tax-free; distributions are not added to your earned income at tax time;
• Avoid filing taxes on the interest earned every year;
• Make tax-free* withdrawals for the purchase of your first home, higher education, certain medical expenses and other uses;
• Let your savings grow as long as you like, there's no minimum distribution at age 70 ½;
• Convert any existing IRA into a Roth IRA.

Withdrawals from a Roth IRA after five years are not subject to income tax or the 10 percent premature penalty if the individual is at least 59 1/2, dies, is disabled, or uses up to $10,000 of the money for first-time purchase of a house. Withdrawals after five years, but before age 59 1/2 for college expenses are not subject to a 10 percent penalty tax but are taxed at ordinary rates. Withdrawals of contributions are not subject to income tax or a 10 percent early withdrawal penalty. Withdrawals of earnings before five years are subject to income tax and possibly the 10 percent penalty tax. Taxable distributions are not subject to the 10 percent early withdrawal penalty if the individual is 59 1/2, deceased, disabled, taking equal periodic payments over his/her life expectancy for at least five years or until age 59 1/2, whichever comes later, or for college expenses, first-time home purchase up to $10,000, certain medical expenses and certain other uses.

Coverdell Education Savings Account (CESA) - formerly known as an Education IRA 

Whether your child is six months or ten years old, it's never too early to start thinking about their college education. With the enormous cost of higher education, it's important to plan ahead and start saving early. A CESA is a great way to start saving for your child's education.

A CESA can be opened for a named beneficiary under the age of 18. Annual contributions of can be made into a child's CESA. Please contact us for current contribution limits. The withdrawals are tax-free when used for higher education and before the age of 30.

Traditional Deductible IRA 

The Traditional Deductible IRA was created for individuals that don't participate in an employer sponsored retirement plan. Although, certain individuals that do participate in an employer sponsored retirement program may still qualify for this IRA.*

Annual contributions can be made up to current authorized limits. Your earnings are tax deferred but will be taxed upon withdrawal.

Withdrawals are IRS penalty-free** after age 59 ½, for the purchase of a first home, higher education or upon death. There is a required distribution at age 70 ½.

If covered by a retirement plan, fully deductible contributions may be possible if Adjusted Gross Income is below $30,000 for single taxpayers and $50,000 married filing jointly, In addition, reduced deductible contributions may be allowed for Adjusted Gross Income levels between $30,000 - $40,000 single and $50,000 - $60,000 married filing jointly.

** Taxable distributions are not subject to the 10 percent early withdrawal penalty if the individual is 59 1/2, deceased, disabled, taking equal periodic payments over his/her life expectancy for at least five years or until age 59 1/2, whichever comes later, or for college expenses, first-time home purchase up to $10,000, certain medical expenses and certain other uses.

Traditional Nondeductible IRA 

Anyone with earned income under the age of 70 ½ can contribute to this IRA. Annual contributions can be made up to current authorized limits. Your earnings are tax deferred but will be taxed upon withdrawal.

Withdrawals are penalty-free after age 59 ½, for the purchase of a first home, higher education or upon death. There is a required distribution at age 70 ½.

Taxable distributions are not subject to the 10 percent early withdrawal penalty if the individual is 59 1/2, deceased, disabled, taking equal periodic payments over his/her life expectancy for at least five years or until age 59 1/2, whichever comes later, or for college expenses, first-time home purchase up to $10,000, certain medical expenses and certain other uses.

Simple IRA 

The Simple IRA was created for people who are self-employed or employed by a business with less than 100 employees. Since small business and self-employed individuals usually can't take advantage of a company sponsored retirement plan, such as a 401k, the government created the Simple IRA.

You can contribute up to the then current authorized annual limit to your Simple IRA. Employers can match three percent of your annual contribution. All contributions are pre-taxed. Your earnings will grow tax-deferred, but are taxed upon withdrawal.

FDIC Insured - Your retirement fund deposits at Pacific Trust Bank are separately insured up to $250,000 by the Federal Deposit Insurance Corporation (FDIC).