Individual Retirement Accounts - East County Schools Federal Credit Union
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Individual Retirement Accounts (IRAs)

IRAs are a great tool to save for major events in your life, such as retirement, college expenses, or a new home. East County Schools has both share and certificates, Roth and Traditional. Stop by a branch to open an account.

IRA Share Accounts

  • Similar to a share savings account in that there is a $5.00 deposit requirement and additions to the principal can be made at any time, up to the maximum contribution allowed per year by law.
  • You can contribute up to $6,000 per year plus an additional $1,000 catch up if you are 50 or older for 2021 (same as 2020).
  • Dividends are calculated daily and paid monthly.
  • No East County Schools FCU penalties for early withdrawal. The Internal Revenue Service does impose penalties for withdrawals prior to age 59½.

IRA Share Certificates of Deposits (CDs)

  • 3-month to 60-month certificates are available.
  • Minimum purchase amounts of $1,000 or any amount above this minimum.
  • "Maturity sensitive," generally paying higher Dividend Rates for those with longer maturities.
  • Certificates automatically renew at maturity unless you indicate otherwise.
  • East County Schools FCU imposes penalties for early withdrawals.
    • Terms of up to one year – 30 days of dividends or $25.00, whichever is less
    • Terms of greater than one year – 90 days of dividends

All Individual Retirement Accounts are insured to $250,000 by the NCUA (National Credit Union Administration) separately from any other share accounts you may have with East County Schools Federal Credit Union.


Compare Individual Retirement Accounts

DescriptionTraditional IRARoth IRA
Adjusted Gross Income Eligibility RestrictionsAlmost everyone with earned income may participateIndividuals earning $125,000 or less
Married couples earning $208,000 or less in 2021
Maximum Annual Contribution$6,000
(if under age 50)
(if over age 50)
(if under age 50)
(if over age 50)
Non-wage Earning Spousal Contribution$6,000
(if under age 50)
(if over age 50)
(if under age 50)
(if over age 50)
Tax Deductibility of ContributionsUp to 100% depending on Annual Gross Income and participation in an employer-sponsored retirement plan.Cannot deduct
Tax treatment of dividend earningsGrow tax-deferred until withdrawnGrow tax-free
Taxes Upon WithdrawalWithdrawals of contributions and dividend earnings are taxed as ordinary income at the then current tax bracketNone
Withdrawal RestrictionsCurrently, most withdrawals before age 59½ result in IRS penalties. Some exceptions are made for catastrophic medical expenses or disability. The new law allows for early penalty-free withdrawal for first-time home purchases and/or college expenses.IRS penalty-free withdrawal after age 59½, so long as the money has been in the account for five years. Penalty-free and tax-free withdrawals prior to age 59½ if the funds are used for disability or first-time home purchase. The five-year-in-the-account rule applies.
Age at which withdrawals must begin72 (70 ½ if you reached 70 ½ before January 1, 2020)

(Does not imply that $6,000 or $7,000 can be contributed to both IRA types. A maximum of $6,000 or $7,000 can be contributed to one or the other -or- split between both.)

Traditional IRAs

  • Maximum annual contribution is $6,000 if under age 50 or $7,000 if over age 50, or 100% of your earned income, whichever is less, for 2020 & 2021. Income limits also apply.
  • IRS penalty-free withdrawals are allowed prior to age 59½ when the funds are used for first-time home purchases (up to a lifetime limit of $10,000) and/or higher education expenses.

Roth IRAs

  • The Roth IRA, like the Traditional IRA, has a maximum annual contribution limit of $6,000 if under age 50 or $7,000 if over age 50 from earned income, for 2019 & 2020. Income limits also apply.
  • Contributions to a Roth IRA are not tax-deductible.
  • Your eligibility to contribute to a Roth IRA is not dependent on whether you are covered by a retirement plan at work.
  • Dividends grow tax-free.
  • Withdrawals of both contributions and earned dividends are tax-free after age 59½, as long as the money has been in the account for five years.
  • Tax-free distributions from the Roth IRA are permitted prior to age 59½ for disability and/or first-time home purchases (up to a lifetime limit of $10,000), as long as the money has been in the account for five years.
  • Unlike Traditional IRAs, the Roth IRA allows you to make contributions after the age of 70½.
  • The Roth IRA does not require mandatory minimum distributions once you reach age 70½.
  • Converting Traditional IRAs to a Roth IRA:
    1. You can convert your Traditional IRAs to a Roth IRA, using special rules developed by the IRS.
    2. The transferred amount is subject to income tax, but is exempt from IRS early withdrawal penalties.

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    Kevin Miller likes to connect good people to great resources. He’s been an enthusiastic fan of East County Schools Federal Credit Union since 2013 when we were known to the education community as Grossmont Schools Federal Credit Union, more than five years ago. “Every person I’ve referred to ECSFCU has raved about the lower rates, better terms and great treatment they get.” From 4.00%APR eChecking to amazing auto loan rates to 0% interest classroom loans, he says, “There has never been a dropped ball or bad experience for anyone I’ve ever referred to ECSFCU.”

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    I had a fantastic trip to Switzerland and Austria this past summer with East County Schools FCU and the SD East County Chamber of Commerce. This was my 6th trip with this fun group! The Educator Tour, guided by the infamous Steve Devan, is the perfect way to truly see and experience any country. The train ride through the Alps was a personal favorite and such an amazing experience. Seeing and hearing cows and goats with real bells grazing on the side of the mountains made me want to sing a favorite "Sound of Music" song and look for Heidi or her grandpa around every turn! I really felt immersed in the culture. The extra servings of warm apple strudel helped too!

     I am a single traveler and all worries are put aside on these well-coordinated trips. Almost everything is taken care of for the travelers so I always feel spoiled! The fellow Educator Tour travelers that I have met from other districts and other walks of life have become my life-long friends! These trips are so dear to me that I have a separate savings travel account where I dedicate a small monthly amount to be ready for the next country!

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    When I became an ECSFCU member, I immediately refinanced my house and got better rates for two cars. East County School employees who are just starting out, this is the best place to be! ECSFCU can help you secure your financial life.

    Grant Nelson - 8th Grade History Teacher in La Mesa Spring Valley Schools
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    While overseas I found myself in the frightening situation of being out of cash and with two debit cards from other financial institutions that weren’t working, despite my travel notice pre-planning. ECSFCU’s amazing member services team stayed late on a Friday to approve and immediately fund a quick loan that made the rest of our trip wonderful. Nobody else does that! Not only is it something that I will never forget, but it’s something I want to tell everyone about.

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    Karl Danielson Granite Hills HS Television, Film and Digital Media Teacher
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