One Response to What’s The Difference Between An Ira Savings Account And An Ira (like Ingdirect.com’s Site)?

  1. Fara says:
    March 1, 2010 at 11:58 am

    There are two types of IRA’s
    Roth IRA – which means that your money grows with interest and you are not taxed when you withdraw the money
    Traditional IRA – When you put money into a traditional IRA you can deduct a portion of it from your taxes, but you are taxed on the capital gains when you withdraw the money.
    When you open an IRA the money can be put into any type of “investment vehicle” that you one. A savings account is a type of vehicle. Others would be a mutual fund, individual stocks, Certificates of Deposit, bonds, annuities, and im sure there is more. Depending on your age you will want different vehicles. A young person probably wouldn’t want to use a savings account with their IRA because the return is so low. Someone that is older might want to use the savigs account because it is safer.
    On a side note, you can not withdraw money from an IRA until you are over 59 and 1/2 years of age. Another side note is that with a traditional IRA you have to start withdrawning a specific amount after age 72, but with a roth ira you are not required to withdraw by a set time, but you still have to wait till after 59 1/2