Jennifer Ramon SVP , Product Development and Review PlainsCapital Bank
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Transcript of Jennifer Ramon SVP , Product Development and Review PlainsCapital Bank
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Jennifer RamonSVP, Product Development and Review
PlainsCapital Bank
Making Cents of Savings
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• Emergency fund• Big purchase• Retirement• Education• Grow idle funds
Why Save?
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• How often will you need access to funds?• How will you access funds?• What is your risk tolerance?• What is your ultimate savings goal?
Consider Your Objectives
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• Personal Savings Accounts• Money Market Deposit Accounts• Certificates of Deposit• Individual Retirement Accounts• Coverdell Education Savings Accounts• Brokerage Accounts
Savings Options
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A good option for an emergency fund, where you’ll need only occasional access to funds and rate is not a top priority
Personal Savings Accounts
Benefits Limitations
• Minimal balance requirement• Nominal rate of interest• Unlimited deposits• Unlimited withdrawals at ATMs
and teller lines• FDIC-insured or NCUA-insured
• No check-writing• Limited by Federal Regulation
D (“Reg D”) to six pre-authorized withdrawals or transfers per statement cycle
• Excess transactions may result in fees or account closure
• Interest earned in excess of $10 per year is taxable income
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Offer more convenient access to funds and often higher interest
Money Market Deposit Accounts
Benefits Limitations
• Typically higher and often tiered rates of interest
• Unlimited deposits• Unlimited withdrawals at ATMs
and teller lines• Limited check-writing permitted• FDIC-insured or NCUA-insured
• Often higher balance requirements than savings
• Limited by Reg D to six pre-authorized withdrawals or transfers per month, no more than three of which may be by check, point-of-sale or ACH
• Excess transactions may result in fees or account closure
• Interest earned in excess of $10 per year is taxable income
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An insured option with fixed terms and fixed or variable rates
Certificates of Deposit (CDs)
Benefits Limitations
• Offered in many fixed terms• Fixed or variable rates• Typically pay higher rates of
interest for longer terms• Banks may occasionally offer
“specials” with premium rates• May offer special features, such
as a “bump” or “step up” in rate• May be renewed at maturity at
prevailing rates• FDIC-insured or NCUA-insured
• Generally higher opening balance requirement
• Not intended for transactions• Withdrawals before maturity
usually subject to penalties• Interest earned in excess of $10
per year is taxable income
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Tax-advantaged, secure option for retirement savings
Traditional Individual Retirement Account (IRA) CD
Benefits Limitations
• Offered in many fixed terms• Typically pay higher rates of
interest for longer terms• Contributions may be tax-
deductible• Earnings grow tax-free until
distributed • May accept roll-over funds from
other retirement plans• FDIC-insured or NCUA-insured
• Federal limitations on eligibility and maximum contributions
• Required distributions begin at age 70½
• Distributions subject to taxes
Please consult your tax professional for tax rules.
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Tax-advantaged, secure and flexible retirement savings option
Roth IRA CD
Benefits Limitations
• Offered in many fixed terms• Typically pay higher rates of
interest for longer terms• Earnings are tax- and penalty-
free after five years when funds withdrawn for a qualified reason (age 59½, first-time home purchase, death/disability)
• No required distributions at 70½ • May accept roll-over funds from
other retirement plans• FDIC-insured or NCUA-insured
• Contributions are made with after-tax dollars
• Federal limitations on eligibility and maximum contributions
Please consult your tax professional for tax rules.
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Tax-advantaged, secure option for education savings
Coverdell Education Savings Accounts (CESAs)
Benefits Limitations
• Generally low opening balance• Typically pay higher rates of
interest for longer terms• Earnings grow tax-free until
distributed• Distributions are tax-free if used
for qualified education expenses• When beneficiary turns 30,
unused funds may be rolled into a CESA for a family member
• FDIC-insured or NCUA-insured
• Contributions are not tax-deductible
• Contributions may be made until the beneficiary is 18
• Federal limitations on eligibility and maximum contributions
• When beneficiary turns 30, unused funds must be distributed within 30 days and earnings are subject to taxes
Please consult your tax professional for tax rules.
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Many investment options with potential for high growth
Brokerage Accounts
Benefits Limitations
• Many options available, including stocks, bonds and mutual funds
• Potential for higher returns based on performance
• Option to use a full-service brokerage house with investment advisors or discount brokerage services online
• Not FDIC- or NCUA-insured• Subject to market risk and
fluctuations• Earnings subject to taxes
Please consult your tax professional for tax rules.
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Jennifer RamonSVP, Product Development and ReviewPlainsCapital [email protected]
Thank You