It’s tax season, and you are looking for a tax relief. An IRA could be the perfect option for you, and it will help you save for your retirement and at the same time it would give you that relief that you are looking for.
Before you choose a product, it is important for you to determine your profile in order to choose the IRA that best fits your needs. If you are a conservative person and you are looking for a low risk short-term investment, a product such as the Oriental CD IRA1 may be the right choice for you. This certificate of deposit offers fixed returns according the term you select, from 1 to up to 5 years. It is recommended for people who seek principal security and guaranteed fixed returns.
On the other hand, to maximize returns on your investment, you will need to choose diversified instruments at terms of five years or more. One of the instruments most commonly used by local investors is Oriental’s Diversified Growth IRA (DGI)2.
This collective investment fund of IRA accounts is invested in bonds, stocks, and general assets. The investment portfolio is managed by a group of money managers who are experts in the portfolio management of investment funds. It is also accessible ― allowing you to make monthly contributions of a minimum amount of $25 to a maximum of $416.66 through automatic transfers from any account.
The DGI and other types of IRA accounts have become one of the most popular ways of saving for retirement because deductible IRA’s offer immediate tax relief. Additionally, the funds may be withdrawn―without penalties imposed by the Puerto Rico Treasury Department ― for certain uses, such as the purchase of your first home or your children’s college education, among others.
The minimum amount to open an IRA is $250, and you could contribute a maximum of $5,000 per taxable year and $10,000 if married filing jointly.
To learn more about IRA accounts, please call 787-777-7777, visit any of our branches across the island, or access our web page.
(1) CD IRA Only for individuals. Minimum opening balance of $250. Penalties for early withdrawal will consist of 365 days of interests on the amount of the early withdrawal. There is an early withdrawal tax penalty of 10% (15% in certain cases) if the early withdrawal does not comply with any of the conditions permitted by the Puerto Rico Department of the Treasury. Other fees: Distribution by check, $14.99; rollover to an IRA account at another institution, $54.99.
(2) DGI Only for individuals who are residents of Puerto Rico. The Diversified Growth IRA or DGI is not insured by the FDIC, is not an Oriental Bank deposit or obligation, is not guaranteed by the Bank, and is subject to investment risk, including the possible loss of the principal invested. It also carries greater risk because it uses borrowed money to leverage the asset base of the Diversified Growth IRA trust. Please ask for the DGI Prospectus at any of our branches or at the offices of Oriental Financial Services Corp. (authorized dealer), Member FINRA/SIPC, and read it carefully before investing. Minimum opening balance: $250. The fees for investment withdrawals (for reasons other than participant attaining age 60 , death, disability, or unemployment) are: 5% of the investment balance if withdrawn during the first year; 4% of the investment balance if withdrawn during the second year; 3% of the investment balance if withdrawn during the third year; 2% of the investment balance if withdrawn during the fourth year; and 1% of the investment balance if withdrawn during the fifth year. A $54.99 rollover fee will be assessed for each rollover to an IRA at another institution. Subject to 10% (15% in certain cases) early withdrawal tax penalty o if the withdrawal does not comply with any of the conditions permitted by the Puerto Rico Treasury Department. The annual fee for administrative and other services is 1.80%. This annual fee is calculated based on the DGI trust’s average total assets. We also offer other types of IRAs. Ask for detailed information about each IRA to decide which is the best for you. For more information visit any of our branches or go to www.orientalbank.com. You should consult with your tax advisor. Products offered by Oriental Bank. Oriental Bank is a subsidiary of OFG Bancorp. ©2019 All rights reserved.