Types of IRAs
There are generally two types of IRAs, as described below.
|
Traditional IRA |
Roth IRA |
| Tax Benefits |
Contributions may be tax-deductible
Earnings grow tax-deferred
Withdrawals generally are taxable
|
Contributions are not tax-deductible
Earnings generally grow tax-free
Withdrawals generally are tax-free
|
|
Contributions
|
| Maximum the lesser of |
$6,000 per year (for 2020) or the individual's taxable compensation for the year |
$6,000 per year (for 2020) or the individual's taxable compensation for the year |
| Catch-up1 |
An additional $1,000 per year, beginning in the year the individual turns 50 |
An additional $1,000 per year, beginning in the year the individual turns 50 |
| Eligibility |
Any age
Must have taxable compensation
No maximum income limits
|
Any age
Must have taxable compensation
Maximum income limits
For single filers: Eligibility phases out between $124,000 and $139,000 of modified Adjusted Gross Income (for 2020)
For joint filers: Eligibility phases out between $196,000 and $206,000 of modified Adjusted Gross Income (for 2020)
|
| Withdrawals |
Withdrawals after 59½ without tax penalty
Withdrawals before 59½ generally subject to a 10% tax penalty unless exception2 applies
Mandatory withdrawals beginning in the year the individual turns 72
|
Withdrawal of contributions without tax penalty
Withdrawal of earnings may be subject to a 10% tax penalty unless a qualified distribution or an exception2 applies
No mandatory withdrawals
|
IRA Accounts
IRA Accounts
There are three Bank IRA options.
Fixed Rate3
Similar to a CD, earns interest at a fixed rate for the term of the time deposit.
- Interest rate fixed for the term of the time deposit within the IRA —terms range from 6 to 60 months
- Can be opened with a minimum deposit of $250
- Additional deposits can be made during the grace period at maturity
Find a rate in your area
Money Market3
Similar to a money market account, allows for regular deposits and/or the rollover of IRA funds at any time.
- No maturity obligation, so withdrawals can be made any time
- Can be opened with a minimum deposit of $50
- Can make deposits of $25 or more at anytime
- Can be linked to a checking or savings account for regular, automatic deposits
Find a rate in your area
18 Month Variable Rate
(Traditional only)
Earns interest at a rate that is comparable to the prevailing rate4 in the market.
- Earn a variable rate of interest over a fixed term of 18 months
- Rate is equal to the most recent discount auction rate of the six-month Treasury Bill plus 0.25%4
- Can be automatically renewable
- Can be opened with a minimum deposit of $250
- Additional deposits are permitted during the 18-month term, with a minimum of $50
Find a rate in your area
- No monthly fee
- Pays interest on all balances
Contact Us
Contact Us
For questions on existing Regions IRA accounts, contact the CD/IRA Support Center at 1-800-388-4727.
This communication is provided by Regions Bank for educational and general marketing purposes only and should not be construed as a recommendation or suggestion as to the advisability of acquiring, holding or disposing of a particular investment, nor should it be construed as a suggestion or indication that the particular investment or investment course of action described herein is appropriate for any specific retirement investor. In providing this communication, Regions Bank is not undertaking to provide impartial investment advice or to give advice in a fiduciary capacity.
This information should not be relied on or interpreted as accounting, financial planning, investment, legal or tax advice. Regions encourages you to consult a professional concerning your specific situation and visit irs.gov for current tax rules.
Note that special rules apply to IRAs (both Traditional and Roth) that are inherited by a beneficiary. If you are the beneficiary of an inherited IRA, please consult a professional about your specific situation and visit irs.gov for current tax rules.
1. An individual who is 50 years of age or older can contribute the maximum ($6,000) plus the catch up ($1,000) for a total of $7,000 per year.
2. Penalty exceptions generally include: distribution to a beneficiary due to death of owner, medical insurance after losing a job, a scheduled series of substantially equal periodic payments, qualified post-secondary education expenses, total and permanent disability, rollover, tax levy, qualified reservist distribution, cost associated with the birth or adoption of a child (up to $5,000), deductible medical expenses, and buy, build or rebuild a first home (up to $10,000).
3. These accounts can be opened with a Roth IRA, an Education IRA or a Traditional IRA.
4. The discount rate of the 6-month Treasury bill is determined by the weekly auction of the Federal Reserve. To this extent, the interest rate and Annual Percentage Yield (APY) earned on this deposit are subject to change weekly and may be deemed variable rates. Fluctuations in the discount rate of the 6-month Treasury bill could cause an interest rate and APY in a subsequent week to be less than the interest rate and APY in an earlier week. Withdrawals from 18-month Variable Rate IRAs before the maturity date may be subject to a bank early withdrawal penalty of six months’ simple interest on the amount withdrawn at the interest rate being paid on your deposit at the time of withdrawal. Withdrawals from IRAs before age 59½ may be subject to other penalties and tax consequences as provided by applicable law. Fees could reduce earnings on the account. This deposit is not available for Roth IRA or Coverdell Education Savings Accounts.