Function

• The function of a bank retirement account is to provide a structure for a person to begin to save money for future retirement.
  
  

Types of Accounts

• There are Destination Savings (IRA) accounts, regular savings accounts, CD accounts, money market savings account and brokerage accounts. All of these are used for retirement accounts.
  
  

IRA

• IRA have penalties if money is withdrawn to early but they do earn interest. The tax advantage is that some IRA contributions may be tax deductible depending upon income, tax filing status and coverage by an employer-sponsored retirement plan. Some are tax free, and with some, taxes can also be deferred.
  
  

CD Account

• A CD account is one where you loan money to the bank for a fixed amount of return monthly. Your money is usually not available to you for a year or more. There are no tax advantages.
  
  

Investment Account

• An investment or brokerage account allows you to invest your money in stocks and mutual funds. It gives you more liquidity and choice in where you wish to invest your money. There are no tax advantages in brokerage accounts; all income is taxable.
  
  

Money Market Savings Account

• Money market account is a high-yield, FDIC-insured bank account. Interest rates are typically higher on these types of accounts. Withdrawals are limited to six per month, and a higher minimum balance must be maintained. No tax advantages are given.