Make dreams come true. Keep your hard earned retirement savings safe.

In a world of fluctuating investment values we've all learned the importance of keeping our hard earned retirement savings safe. Regardless of how near or far you are from retirement, putting money away is important.

If you have existing IRA accounts or 401(k) plans from previous employers, it might just be time to consolidate these retirement funds into one easy-to-manage account. We can help you with the transition process. We also have an experienced Wealth Management Division that provides customized portfolio management and retirement advisory services.

Montecito Bank & Trust offers both Traditional and Roth IRA Certificates of Deposit with competitive rates, fixed terms and the security of FDIC insurance. Calculate the insurance coverage for all of your deposit accounts with the FDIC's Electronic Deposit Insurance Estimator (EDIE).

TermsChoice of IRA (Individual Retirement Arrangement) Certificate of Deposit terms from 30 days to 3 years. Open an IRA or rollover an existing IRA or 401(k).
Access to FundsEarly withdrawal penalties apply. Also, talk to your tax advisor for tax implications of the early withdrawal of an IRA CD.
Minimum to Open$1,000
FeesA $25 annual fee will be assessed if the account balance falls below $10,000 at any time during the term of the account or during any 12-month period, whichever is shorter.
Funding TipsFund your annual IRA with a lump sum contribution, or fund it more affordably through a Montecito Bank & Trust automatic payment program.

Traditional IRAs: A Traditional IRA provides the opportunity for your earnings to grow tax-deferred until they are withdrawn in retirement and offers the potential for tax-deductible contributions. With a traditional IRA, the goal is to keep this money growing until you are at an age where you will be in a lower tax bracket. Montecito Bank & Trust offers traditional IRAs. For more information about IRAs, go to IRS.gov and search on IRAs, and consult your tax advisor.

Roth IRAs: Roth IRAs offer you an opportunity to create tax-free income during retirement and can be a good way to diversify your future retirement income. Roth IRAs can also help maximize the value of the funds you pass on to your heirs, who may also benefit from tax-free growth and income. Montecito Bank & Trust offers Roth IRAs. For more information about IRAs, go to IRS.gov and search on IRAs, and consult your tax advisor.

Traditional IRARoth IRA
2015 Contribution Limit100% of earned income up to $5,500 ($6,500 if 50 or older by December 31 of the contribution year) or your taxable compensation for the year.

100% of earned income up to $5,500 ($6,500 if 50 or older by December 31 of the contribution year) or your taxable compensation for the year.

Generally speaking, you can contribute as long as your Modified Adjusted Gross Income (MAGI) meets the following limitations.

  • Full contribution if MAGI is less than $116,000 (single) or $183,000 (joint)
  • Partial contribution if MAGI is less than $131,000 (single) or $193,000 (joint)
  • To learn more about MAGI, read IRS Publication 590 or consult your tax advisor.
Age RequirementsYou must be under age 70½ in the contribution year to contribute. However, as long as you have earned income and your spouse is under age 70½ in the contribution year, you may make a contribution to your spouse's IRA.None
Tax Advantages

Investment growth is tax-deferred.

You delay paying Federal income tax on earnings until you make a withdrawal. Investments grow tax-deferred as long as they remain in the IRA, while distributions (less the return of any non-deductible contributions taken during retirement) are taxed as ordinary income.

Tax-deductible contributions and earnings are taxed as ordinary income when withdrawn.

After-tax contributions are withdrawn tax-free.

Investment growth is free from Federal Income Tax when withdrawn as part of a qualified distribution (as defined by the IRS).
Is my contribution tax deductible?

If you're covered by an employer-sponsored retirement plan, 2015 tax year contributions are fully deductible if your Modified Adjusted Gross Income (MAGI) is below $61,000 (single) and $98,000 (married, filing jointly). You'll get a partial deduction if your income is between $61,000-$71,000 (single) and $98,000-$118,000 (married, filing jointly).

If you're covered by an employer-sponsored retirement plan, but your spouse isn't, you may take a deduction for the contribution made to your spouse's IRA if, for 2015, your joint MAGI is no more than $183,000. The deduction is phased out for joint MAGI between $183,000-$193,000.

If neither spouse is covered by an employer-sponsored plan, the contributions are fully tax-deductible, regardless of income level.

To learn more about MAGI, read IRS Publication 590 or consult your tax advisor.

No. Your contribution is not tax-deductible.
Withdrawals

Withdrawals must begin starting at age 70 1/2.

You may be charged a 10% IRS early withdrawal fee if you withdraw funds before the age of 59 1/2, with the following exceptions:

  • Disability
  • Qualified first-time home purchase ($10,000 lifetime limit)
  • Qualified higher-education expenses
  • Qualified military reservist
  • Medical expenses in excess of 7.5% of Adjusted Gross Income (AGI)
  • Health insurance premiums if unemployed for 12 consecutive weeks
  • Substantially equal payments made over life expectancy
  • Death
You can withdraw contributions at any time free of tax or penalty. Earnings are income tax free if you've held the account for 5+ years and you are 59 ½ or older.

You may be charged a 10% IRS early withdrawal fee if you withdraw earnings before the age of 59 ½, with the following exceptions:

  • Disability
  • Qualified first-time home purchase ($10,000 lifetime limit)
  • Qualified higher-education expenses
  • Qualified military reservist
  • Medical expenses in excess of 7.5% of Adjusted Gross Income (AGI)
  • Health insurance premiums if unemployed for 12 consecutive weeks
  • Substantially equal payments made over life expectancy
  • Death

The content available on this site is posted for information purposes only. The information is not intended to provide legal, tax, or accounting advice.

For more information about IRAs, go to IRS.gov and search on IRAs, and consult your tax advisor.


Ready to Get Started?

For current rate information on IRA CDs or to open your IRA CD, call us at (805) 963-7511, or just stop by one of our convenient branch locations.

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