Similar to certificates of deposit, individual retirement accounts pay a higher rate of interest on funds left on deposit for a specific length of time, with penalties for early withdrawal. Specific IRS guidelines apply to eligibility, contributions and withdrawals.
Traditional IRA: Tax deferred earnings with deductible contributions.
Roth IRA: Tax free earnings with non-deductible contributions.
Coverdell Education Savings Account IRA: Education savings program made with after-tax contributions. Earnings are tax-free if used for qualifying reasons.
Consult your tax advisor for specific information regarding IRA eligibility and contribution guidelines.
Individual Retirement Accounts