Individual Retirement Accounts (IRAs)

Individual Retirement Accounts (IRAs)

An Individual Retirement Account is a smart way to save for the future, whether it is for your retirement or your child's education expenses. We offer Traditional, Roth and Coverdell Education Savings Account IRAs, each with different advantages and limitations. Talk to one of our universal bankers to see which option is best for your needs.

Summary
  • Tax-advantaged retirement savings*
  • Competitive rates above standard savings
  • Traditional, Roth IRAs, or Coverdell accounts available
  • No setup or administrative fees
  • No monthly or annual maintenance fee

*Consult a tax advisor.



Traditional vs. Roth

A traditional IRA may provide you significant immediate tax savings, because contributions and earnings are tax-deferred until retirement. Roth IRAs are different since the money you contribute to a Roth IRA has already been taxed. So the principal amount is never subject to taxes or penalties in the future, as long as you stay within the contribution guidelines. This allows the money you contribute to grow tax-deferred.

Traditional IRA

  • No income limits to open
  • No minimum contribution in any year
  • Contributions are tax deductible on state and federal income tax*
  • Earnings are tax deferred until withdrawal
  • Maximum Annual Contributions 2019 - Under 50 - $6,000 / 50 and Over - $7,000 (including $1,000 catch-up*)
  • Maximum Annual Contributions 2018 - Under 50 - $5,500 / 50 and Over - $6,500 (including $1,000 catch-up*)
  • Catch-up Contribution Limits* Anyone age 50 and over is eligible to make additional "catch-up" IRA contributions of up to $1,000.
  • Withdrawals can begin at age 59½
  • Early withdrawals are subject to IRS and Bank penalty**
  • Mandatory withdrawals at age 70½

Roth IRA

  • Income limits to be eligible to open Roth IRA
  • Contributions are NOT tax deductible
  • Earnings are 100% tax free at withdrawal*
  • Maximum Annual Contributions 2019 - Under 50 - $6,000 / 50 and Over - $7,000 (including $1,000 catch-up*)
  • Maximum Annual Contributions 2018 - Under 50 - $5,500 / 50 and Over - $6,500 (including $1,000 catch-up*)
  • Catch-up Contribution Limits* Anyone age 50 and over is eligible to make additional "catch-up" IRA contributions of up to $1,000.
  • Principal contributions can be withdrawn without penalty*
  • Withdrawals on interest can begin at age 59½
  • Early withdrawals are subject to IRS and Bank penalty**
  • No mandatory distribution age
  • No age limit on making contributions as long as you have earned income

*Refer to Providence Bank's Truth in Savings Disclosure for additional account information. Information was obtained from the IRS website www.irs.gov. Where language is unclear, assumptions have been made. Investors must consult with their tax advisor or legal counsel for advice and information concerning their particular situation. Representatives of this bank may not give legal or tax advice.

**Certain exceptions apply, such as healthcare, purchasing first home, etc.

Coverdell Educational Savings Account

Saving for your children's education expenses is important for their future, and a Coverdell Education Savings Account is a good choice. You may contribute a maximum of $2,000 per year per child until his or her 18th birthday. Contributions are not tax deductible, but earnings accumulate tax-free. Withdrawals from these IRAs can be used to pay for qualified educational expenses such as tuition, books, supplies, and room and board.


  • No setup or annual fee
  • Dividends grow tax-free
  • Withdrawals are tax-free when used for qualified education expenses*
  • Designated beneficiary must be under 18 when contributions are made
  • $2,000 maximum annual contribution per child*
  • Contributions are not tax deductible
  • Certain income limits apply for contributions*
  • Early withdrawals are subject to Bank penalty

*Refer to Providence Bank's Truth in Savings Disclosure for additional account information. Information was obtained from the IRS website www.irs.gov. Where language is unclear, assumptions have been made. Investors must consult with their tax advisor or legal counsel for advice and information concerning their particular situation. Representatives of this bank may not give legal or tax advice.