CDs - A ‘Certificate of Deposit’ (CD) is a short/medium term investment that is insured by a Credit Union. This means you can only make money in the deposit and have no risk of loosing it. CDs offer higher rates of return than a regular short term savings or money market account in exchange for tying up your invested money for a specified period of time. During this specified period of time, you cannot take your money out. Money removed before the specified period of time is subject to a penalty (a Forfeit of Interest), meaning the exact amount of money you invested will be returned to you with no extra. CDs are considered “time deposits” because a member has agreed to keep money in the account for a specified time period ranging from 6 months to 5 years (at Vantage Credit Union). Members can open a CD at any VCU branch with a minimum of $250.00 in our smart saver CD which is a great way to start saving!

IRAs - An ‘Individual Retirement Account’ (IRA) is a retirement plan that provides some tax advantages for retirement savings in the United States. The account allows members to set aside a specific amount of money each year, with earnings which are tax-defferred, until withdrawals begin at age 59 1/2 or later. Money may be withdrawn earlier with a 10% penalty. The exact contribution amount depends on the year and your age.

IRAs can be established at a Credit Union, mutual fund family, or brokerage company. Contributions potentially qualify as a deduction against income earned in that year (in a Traditional IRA), and interest accumulates tax-deffered until the funds are withdrawn. Certain restrictions may apply, so you’ll want to consult whoever you may be going through before you apply for an IRA!

I hope this helped you! Thanks for the questions, keep them coming!