Calculate the Future Value of a Certificate of Deposit (CD)

A Certificate of Deposit or “CD” is a type of savings certificate in which the holder deposits some amount of money (usually a minimum of $100) for a specified period of time. CDs are offered by most banks, credit unions, and thrifts and typically require a deposit timeframe of several months to several years. In exchange, they offer a fixed rate of interest that is higher than most traditional savings accounts and a guarantee of their safety from the federal government. While most CDs penalize the holder for early withdrawal, they can make a good investment choice for conservative investors who will not need the money until the CD matures.

Certificates of deposit in larger amounts and longer-timeframes usually offer higher interest rates than those of smaller amounts and shorter timeframes. While most CDs are offered with fixed-rates, some offer a “bump-up” feature, allowing for a one-time adjustment of the interest rate at some point during the term of the CD.

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The above information is educational and should not be interpreted as financial advice. For advice that is specific to your circumstances, you should consult a financial or tax advisor.

Eligibility and Contributions to a Spousal IRA

A Spousal IRA is an IRA under which contributions are made by an individual for their spouse. A Spousal IRA can be wither a Traditional IRA or a Roth IRA, both of which can create savings opportunities with tax advantages for a spouse with little or no income. The parameters regarding eligibility and contribution limits are the same Spousal IRAs as those for regular IRAs.

Spousal IRA Eligibility

To be eligible for a Spousal IRA, the couple must be legally marries before the end of the tax year and they must be filing joint tax returns. While there are no age restrictions regarding contributions to a Roth IRA, under a Traditional IRA, the working spouse cannot be older than 70.5 years (because this is when minimum distributions begin with a Traditional IRA).

Spousal IRA Contributions

For 2010, the non-working spouse can make contributions up to $5,000 or up to $6,000 if age 50 or over before the end of the year. If, however, the couples’ adjusted gross income is between $167,000 and $177,000, the non-working spouse’s 2010 contribution is phased out. For 2010, the working spouse’s deductible contribution is phased out between an adjusted gross income of $89,000 to $109,000.

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The above information is educational and should not be interpreted as financial advice. For advice that is specific to your circumstances, you should consult a financial or tax advisor.