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Certificate & IRA Accounts

LM Federal’s highest rate federally insured investment. You pick the term that works best for you from 3 to 48 months. Longer terms and balances of $25,000 and greater earn higher rates. Dividends are compounded and paid monthly. Certificates include the following features:

  • Have dividends paid to the certificate or any other account
  • Option for automatic renewal
  • Monthly interest check available (on accounts of $5,000 or greater)
  • Low minimum to open: $500 for terms of 6-48 months, $1,000 for terms 3-5 months

You may open a share certificate by depositing funds currently on deposit elsewhere or by transferring funds from another LM Federal account. Don’t have enough to open a certificate? Setup a payroll deduction to deposit funds each payday into your share account. Transfer the funds into a certificate when you’ve accumulated the amount desired.

IRA Accounts

General Information

An active, secure future is all about sensible planning and making your money work harder for you. We offer Traditional IRAs, Roth IRAs and Educational IRA's to meet your individual needs. All are available as Certificates, Money Markets or Share Accounts. You may transfer funds from other IRA accounts or from any Qualified Retirement Plan (including 401k plans) to a LM Federal IRA. And, there are no annual maintenance fees charged! Regular IRA contributions may be made by payroll deduction, through the mail, or in person.

IRA Account Types

Traditional IRA: Contributions may be tax deductible, creating an opportunity for you to save for the future today and by saving on the taxes that you might otherwise pay. Plus, your earnings gross tax deferred.

Roth IRA: Earnings grow tax-free, contributions are not tax deductible. Withdrawals are generally tax-free if you don't begin withdrawals for at least 5 years and if you are at least age 59½ or you use the funds for a first home purchase.

Coverdell Educational Savings Account (ESA): An ESA can provide benefits and relief in funding a student's secondary and college education expenses. Contributions are not tax deductible, but earnings grow tax-free (restrictions apply).

Detailed IRA Information

What is the maximum contribution amount?
Traditional IRA

$5,500 per year for 2016 and 2017.

  • For owners age 50+, the limit is $6,500 per year for 2016 and 2017.
  • Cannot exceed compensation
  • Reduced by Roth IRA contribution amount
Roth IRA

$5,500 per year for 2016 and 2017.

  • For owners age 50+, the limit is $6,500 per year for 2016 and 2017.
  • Cannot exceed compensation
  • Reduced by Traditional IRA contribution amount
Coverdell Education Savings Account
  • $2,000 per child per year for 2016 and 2017.
  • Contributions do not count against the limits for Traditional or Roth IRA's
  • Limit applies to all Coverdell Education Savings Accounts (ESA) for the same child.
Are contributions tax deductible?
Traditional IRA Yes, if not active in employer's retirement plan. Otherwise subject to income limits** (see below)
Roth IRA No
Coverdell Education Savings Account No
Who can contribute?
Traditional IRA
  • Anyone under age 70½ who has income from compensation (or who is filing jointly with a spouse who earns compensation)
  • Anyone who has received a distribution from a qualified retirement plan and decides to roll over the proceeds of the plan into an IRA.
Roth IRA Anyone who has income from compensation (or is filing jointly with a spouse who earns compensation) depending on MAGI**.
Coverdell Education Savings Account Anyone who has MAGI*:
  • Single filers: up to $95,000. Partial contribution if $95,000 - $110,000
  • Joint filers: up to $190,000. Partial contribution if $190,000 - $220,000
  • Not allowed after the beneficiary reaches age 18 (unless special needs beneficiary)
What are the tax advantages?
Traditional IRA
  • Earnings grow tax-deferred until withdrawn
  • Contributions may be tax-deductible
Roth IRA
  • Earnings are tax-free if account is open for five tax years and withdrawn for a qualified reason (age 59½, disability, death, or a first-time home purchase.)
  • Not required to start withdrawals at age 70½.
Coverdell Education Savings Account
  • Withdrawal for certain qualified education expenses are tax-free (including tuition, fees, books & computers required for elementary, secondary and post-secondary)
  • Special-needs beneficiaries can withdraw funds tax-free to pay for qualified education expenses at any age
When can I withdraw without restrictions?
Traditional IRA

Withdraw penalty-free for any of the following:

  • Qualified higher education expenses
  • First-time home purchase
  • Age 59½, (must begin withdrawals by age 70½)
  • Disability
  • Qualifying medical expenses exceeding 7.5% of adjusted gross income
  • Payment to beneficiaries upon the owner's death
  • Payment of health insurance premiums while unemployed for 12 weeks +
Roth IRA
  • Earnings are tax-free if account is open for 5 tax years and withdrawn for a qualified reason (age 59½, disability, death, or a first-time home purchase***)
  • Not required to start withdrawals at age 70½
Coverdell Education Savings Account
  • Withdrawals are tax and penalty free for qualified education expenses (earnings are subject to tax and penalty for most other withdrawals)
  • Funds can be transferred from one child's account to an account for another child in the family
Contribution Deadline
Traditional IRA April 15th or tax return deadline
Roth IRA April 15th or tax return deadline
Coverdell Education Savings Account April 15th or tax return deadline

* MAGI: modified adjusted gross income from federal tax form
** Contribution and deductibility limits change frequently. Consult your tax professional regarding your individual circumstances.
*** Lifetime limit for exemption on first-time home purchase is $10,000
Not intended as tax advice. Please consult a tax professional.