Savings

Regular Savings Account

There is a $250.00 minimum balance to open a Passbook Savings account. You may have no more than six (6) preauthorized transfers from this account per month.

The interest rate and annual percentage yield on the Passbook Savings account may vary. Please contact us at Liberty State Bank for the current rate. Your interest rate and annual percentage yield may change. At our discretion, we may change the interest rate on your account at any time. There are no limitations on interest rate changes. Interest begins to accrue on the business day you deposit non-cash items (for example, checks). Interest will compound quarterly and be credited to your account at the end of every quarter. If you close your account before interest is credited, you will not receive the accrued interest.

We use the daily balance method to calculate the interest on your account. This method applies a daily periodic rate to the principal in the account each day. If at any time your balance goes below $10.00, your account will not accrue interest for that period.

This bank reserves the right at its election to charge a dormant account fee to the account in the amount of $5.00 per quarter if there have been no deposits or withdrawals from the account for a period of three (3) years. 

Additional fees, may be assessed against your account.

Please contact one of our representatives for more information.

Certificate of Deposit

Minimum required deposit is $1000.00. We use the daily-balance method to calculate the interest on your account. This method applies a daily periodic rate to the principal in the account each day. Interest begins to accrue on the business day you deposit non-cash items (for example, checks). Interest is credited to your account semi-annually by either compounding, depositing to checking or savings account, or by an interest check. The annual percentage yield assumes that interest remains on deposit until maturity. A withdrawal of interest prior to maturity will reduce earnings.

After the account is opened, you may not make deposits into this account until the maturity date. If any of the deposit or interest is withdrawn before the maturity date, a penalty as shown below may be imposed for early withdrawal. 

This account will automatically renew at maturity. You will have ten (10) calendar days from the maturity date to withdraw your funds without being charged a penalty.

Additional fees, may be assessed against your account.

Please contact one of our representatives for more information.

IRA's

An Individual Retirement Account (IRA) is an excellent tool for retirement savings. Unlike most investments, depending on the type of IRA you choose, contributions may be tax deductible and will grow either tax-deferred or tax-free. In addition there are general rules that are prescribed for IRAs and are grouped under three broad categories that include eligibility, contributions, and withdrawals. At Liberty State Bank, we offer both Traditional and Roth IRAs to meet your retirement needs.

Traditional IRA

Roth IRA

Traditional IRA vs. Roth IRA

Traditional IRA
 

Eligibility - The owner must be under the age of 70½, and must have some form of compensation to contribute.

Contributions - The annual contribution limit is $5,500 under age 50 ($6,500 over age 50) for 2016. This contribution limit can be adjusted annually for inflation in $500 increments. Contributions are tax deductible if you are not an active participant in an employer retirement plan. Deductibility may be limited if you or your spouse are an active participant in an employer retirement plan. Contributions and Interest earned grow on a tax-deferred basis.

Withdrawals - An owner must be age 59½ before making a withdrawal from a traditional IRA without incurring an additional 10% tax penalty. There are several exceptions that allow an owner to avoid the tax penalty for early withdrawals such as, qualified higher education expenses, certain qualified first-time homebuyer amounts, or significant unreimbursed medical expenses among other exceptions (check with a financial advisor for all the details on early withdrawals). Earnings are taxed only upon withdrawal or distribution. Distributions must begin at age 70½.

Roth IRA

Eligibility - An owner must have earned income to establish and contribute to a Roth IRA. There is no age limit or restriction.

Contributions - The maximum contribution rules are the same as for a traditional IRA even after age 70½. Contributions to Roth IRAs are not tax deductible.

Withdrawals - Qualified distributions can be made after a five year taxable period is reached and the owner must be 59½ years of age. Early withdrawals are allowed if the owner becomes disabled or for first time homebuyers (check with a financial advisor for all the details on early withdrawals). There is no minimum required distribution for Roth IRAs.

 Traditional IRA vs. Roth IRA

Traditional IRA

Roth IRA

• Contributions often are tax-deductible.
• Earnings grow tax-deferred.
• Distributions generally are taxable.
• Distributions before you reach age 59½ are subject to penalty unless you meet an early distribution penalty exception.
• Required minimum distributions must begin at age 70½.

• Contributions are not deductible.
• Earnings grow tax-deferred.
• Contributions generally can be distributed tax-free at any time.
• Earnings can be distributed tax-free if the Roth IRA holder first made a Roth IRA contribution at least five years ago, AND is age 59½ disabled, deceased, or paying first-time homebuyer expenses.
• Distributions are not required until after the Roth IRA holder dies.

Please contact one of our representatives to start a retirement account today.

SEP Plan

What is a SEP?

A SEP is a simplified employee pension plan. A SEP plan provides employers with a simplified method to make contributions toward their employees' retirement and, if self-employed, their own retirement. Contributions are made directly to an Individual Retirement Account or Annuity (IRA) set up for each employee (a SEP-IRA).

What are the contribution requirements?

By establishing a SEP, you the employer, have adopted a plan that requires an IRA to hold the contributions made on behalf of each of your eligible employees.  A SEP is funded by employer contributions. Check your SEP plan documents for the amounts you have agreed to contribute.

Total contributions to each employee's IRA cannot exceed the lesser of (the preset dollar amount for each year specified, which may be subject to cost-of-living adjustments for later years) or 25% of pay. Each employee is always 100% vested in (or, has ownership of) all contributions to his or her SEP-IRA.

After you send the SEP contributions to the financial institution, the financial institution will manage the funds.  Depending on the financial institution, SEP contributions can be invested in individual stocks, mutual funds, and other, similar types of investments.

Each participating employee must receive an annual statement stating the amount contributed to the account for the year.

What are the basic distribution/withdrawal rules?

SEP contributions and earnings can be withdrawn at any time. A withdrawal is taxable in the year received. If an employee makes a withdrawal before he or she is age 59 1/2, generally a 10% additional tax applies. SEP contributions and earnings may be rolled over tax free to other IRAs and retirement plans.

SEP contributions and earnings must eventually be distributed. A specific minimum amount is required to be distributed by April 1 of the following year you reach age 70 1/2.

A good education is never out of reach. Like every parent, you want to ensure that your child has a bright future. And a good education can make a world of difference. Start preparing now by opening a Coverdell education savings account.

A Coverdell education savings account (ESA) allows contributors to make after-tax contributions of $2,000 per year until a child attains age 18. The earnings generated on ESA contributions remain tax-deferred while held in the ESA. And when a child uses ESA assets to pay for qualified education expenses, the contributions and the earnings are distributed tax-free.

 
ESA Contributions

Each child may not receive more than $2,000 per year in an ESA. But individuals may contribute up to $2,000 per year for an unlimited amount of children, as long as the individual's modified adjusted gross income (MAGI) falls below or within the income limits for the year. 
The income limits are as follows:

Single Filer: $95,000 - $110,000
Married, Filing Joint Tax Return: $190,000 - $220,000

Eligible family members must be under age 30 and include the child's:

• Father, Mother, Stepfather, Stepmother, or In-law
• Spouse
• Brother, Sister, Stepbrother, Stepsister, or In-law
• Child or Dependent of Child, Stepchild, Eligible Foster Child, or In-law
• Aunt or Uncle
• First Cousin
• Niece or Nephew or a Spouse

Qualified Education Expenses

Elementary, Secondary, or Post-Secondary:

• Tuition and fees
• Books
• Supplies and equipment
• Room and board
• Computers
• Special needs services

Nonqualified Distributions

If a child withdraws ESA amounts that exceed her qualified education expenses for the year, a portion of the distribution is taxable. The child must include the earnings attributable to the excess distribution in her gross income for the year, and pay a 10 percent penalty on the taxable earnings unless a penalty exception applies (e.g., death or disability).

If a child does not use the ESA assets or does not transfer or roll over the ESA assets to another "beneficiary" by the time he reaches age 30, the ESA will be deemed distributed. The child must include the distributed amount in gross income for the year and pay a penalty on the earnings if the distribution is not used to pay for qualified education
expenses.

NOTE: The age 18 and age 30 limits do not apply to special needs individuals.

Please contact one of our representatives for more information on Coverdell education savings accounts.