Thursday, January 19, 2017

Is an IRA Certificate of Deposit ("CD") the Right Investment Tool for You?

investment toolStocks and bonds are the typical investment tools for all qualified savers as they seek to create a diversified portfolio. This approach might be beneficial at the outset of your investment planning as it is a more conservative approach, which might be a safer alternative especially in uncertain times. Low-risk options, like an Individual Retirement Account CD, are something to consider as you continue to build your nest egg. Here are six factors to consider 
when you are thinking about adding an 
IRA CD to your investment mix.

1. Portfolio impact – The benefit of CD’s is that they are a very low risk investment tool. This is perfect for individuals who are looking for a more stable portfolio.
2. Contribution tradeoffs – Opening an IRA CD through a bank will count as an IRA contribution. Because the annual amount you can contribute to an IRA is limited, opening an IRA CD will reduce how much you are able to contribute in other IRA investment vehicles. 
3. Penalties for early withdrawal – If you choose to withdrawal money from your IRA CD prior to the maturity date you will be subject to penalties. However, some financial institutions may waive this fee if you are age 70 or older and have begun to collect your IRA distributions from other investment vehicles. 
4. Higher rates – While IRA CD’s are similar to a traditional CD, McHenry Savings Bank typically offers a higher rate for this type of investment vehicle. 
5. Security – Because this is an IRA, your entire principal up to $250,000 is protected by FDIC insurance. 
6. Predictable – An IRA CD offers you the peace-of-mind in knowing how much you will earn. This can provide you greater confidence in knowing that you will not be impacted by a major market downturn. 

Contact the banking professionals at McHenry Savings Bank  ("MSB") if you have questions about IRA CD’s. MSB Customer Service Representative will provide personal attention to help you determine the best tools for your retirement or investment portfolio.  MSB is currently offering a 12 Month IRA CD right now with a great rate and only $250 to open. Speak to a Representative today about specific terms and rates or  visit for more information. Why not open YOUR IRA CD today?