Fast Quick Answer
  • Finance
    What Types of Installment Loans Are There?
  • Finance
    Thinking about Investing in a Company – You Need to…
  • Finance
    Declaring Bankruptcy: The Pros and Cons
Fast Quick Answer
    • Health
      • A Guide to Types of Embolisms

        A Guide to Types of Embolisms

      • The 5 Stages of Liver Cirrhosis

        The 5 Stages of Liver Cirrhosis

      • How You Can Use Acupressure To Relieve Constipation

        How You Can Use Acupressure To Relieve Constipation

      • Which Depression Medication is Right for You

        Which Depression Medication is Right for You

      • High Blood Sugar Information

        High Blood Sugar Information

      • 6 Causes of High Cholesterol

        6 Causes of High Cholesterol

    • Medical
      • How does Hormone Therapy Work for Breast Cancer Treatment

        How does Hormone Therapy Work for Breast Cancer Treatment

      • What You Need to Know About Pancreatic Cancer

        What You Need to Know About Pancreatic Cancer

      • 10 Terms To Know About Deep Vein Thrombosis

        10 Terms To Know About Deep Vein Thrombosis

      • Causes and Treatments of COPD

        Causes and Treatments of COPD

      • The 3 Stages of Gum Disease

        The 3 Stages of Gum Disease

      • Living With Hep C

        Living With Hep C

    • Business
      • 5 Plants To Repel Common Garden Pests

        5 Plants To Repel Common Garden Pests

      • Cutting IT Costs for your Small Business

        Cutting IT Costs for your Small Business

      • How to Best Manage Home Renovations

        How to Best Manage Home Renovations

      • Pros and Cons of a Beauty Career

        Pros and Cons of a Beauty Career

      • How to Choose the Best Small Business Internet Providers

        How to Choose the Best Small Business Internet Providers

      • Small Business Payroll Service Review – OnPay

        Small Business Payroll Service Review – OnPay

    • Finance
      • What’s the Best Way to Transfer Money: Online or Cash…

        What’s the Best Way to Transfer Money: Online or Cash…

      • How Can you Calculate your Credit Score?

        How Can you Calculate your Credit Score?

      • Can’t Pay your Taxes? Here’s What you can Do

        Can’t Pay your Taxes? Here’s What you can Do

      • What you Should Always Consider Before Taking Out a Loan

        What you Should Always Consider Before Taking Out a Loan

      • What You Need for a Car Title Loan

        What You Need for a Car Title Loan

      • To Rent Or To Buy: That Is The Question

        To Rent Or To Buy: That Is The Question

    • Tech
      • The Top 5 Home Security Systems

        The Top 5 Home Security Systems

      • Hybrid Cloud Computing Security Service

        Hybrid Cloud Computing Security Service

      • How Video Conferencing can Improve your Business

        How Video Conferencing can Improve your Business

      • Hybrid Cloud Security Solutions for Small Business

        Hybrid Cloud Security Solutions for Small Business

      • Why you Need to Sign up to the Cloud

        Why you Need to Sign up to the Cloud

      • Satellite internet: Beamed to your business

        Satellite internet: Beamed to your business

    • Auto
      • Top 5 Crossover Vehicles With Parking Assist

        Top 5 Crossover Vehicles With Parking Assist

      • 5 Top Crossover SUVs of 2017

        5 Top Crossover SUVs of 2017

      • The Top 5 Minivans With Style

        The Top 5 Minivans With Style

      • The Best Car Insurance Companies of 2016

        The Best Car Insurance Companies of 2016

      • 2016 Safest Cars

        2016 Safest Cars

      • Top 10 Hybrid Cars Under $30,000

        Top 10 Hybrid Cars Under $30,000

      The Difference between a Regular Savings Account and an IRA Savings Account

      by Stephanie Donnely

      A saving account is an all-inclusive term that includes regular savings account and IRA Savings Account. A Roth IRA refers to a savings account where the earnings accrue on tax-deferred basis but they are tax-free in case distributions are qualified. In regular savings accounts, earnings are normally added to one’s taxable income for the year that they earned. Even though IRA Savings Accounts have a few similarities with regular savings accounts, there exist a few differences between these 2 accounts as outlined below.

      IRA Savings Account, best ira savings accounts, ira roth, roth ira accounts

      Photo by 401(K) 2012 / CC by

      Regular Savings Accounts

      A savings account basically refers to an interest-bearing deposits account being held at a given bank or any other financial institution that’s providing modest interest rates. Financial institutions or banks might limit the total number of withdrawals that you can make each month from the savings account. Furthermore, they might also charge a fee unless you continue maintaining a certain average balance in the account on a monthly basis. In most instances, banks don’t provide checks with the savings accounts.

      Savings accounts usually allow the account holder to access his/her money when they need it without worrying about any penalties for early withdrawal. For instance, if you get involved in an accident with your car and you would like to get a new car, then you can use the savings account without experiencing any negative tax benefits. This is something that you might not be capable of doing with an IRA account. Furthermore, there’s no contribution limit on the savings accounts.

      However, you should also note that savings accounts do not offer any type of tax breaks like deductions for the contributions or the tax-sheltered growth. For instance, each year, you have to include any interests earned on your account in the taxable incomes for that year. This normally lowers the after-tax rates of return. Moreover, depending on the way that you’ve invested your money in an IRA savings account, you might achieve similar high rates of return due to the security being offered by the savings accounts

      IRA Savings Account

      An IRA (individual retirement account) refers to an investing tool that’s used by people to earn and also earmark funds for their retirement savings. As of 2016, there are 4 types of IRA savings accounts: Traditional IRAs, SIMPLE IRAs , SEP IRAs, and Roth IRAs. Sometimes known as individual retirement arrangement, best IRA savings accounts might consist of several financial products like bonds, stocks, or mutual funds.

      The main benefit of using an IRA savings account is their tax advantages. Whether you decide to use an IRA Roth or traditional IRA account, the money will grow tax-free in your account. Traditional IRA accounts offer the benefits of tax-deductible contributions. On the other hand, Roth IRA accounts don’t offer a deduction for the contributions. Whichever option that you choose, you will be getting a tax break which is not the same case with a regular savings account. However, there’s a high potential for the early withdrawal penalties when using IRAs compared to savings accounts.

      For traditional IRA savings accounts, any distributions before the age 59 are seen as non-qualified distributions, which are then subjected to the extra 10% tax penalty for the early withdrawals. Nevertheless, the disadvantage isn’t as bad for Roth IRA accounts because you can actually withdraw all your contributions anytime, penalty-free, and tax-free. Once you have withdrawn your contributions, your earnings are then taxed and penalized.

      Featured Image Source: Thinkstock/© BrianAJackson

      Posted on May 5, 2023
      Privacy Policy | Terms Of Use | Contact