With an IRA (Individual Retirement Account), you choose the plan that's right for you. Pearl Hawaii Federal Credit Union offers three types of IRA accounts: Traditional, Roth, and a Coverdell Education Savings Account. Depending on your choice, you may be able to take a tax deduction for Traditional IRA contributions, or withdraw the earnings on a Roth IRA tax free. The easiest way to start is with a payroll deduction plan from your employer. The funds invested in an IRA grow quickly in the credit union. 

Even if you already participate in any type of government plan, tax-sheltered annuity, simplified employee pension plan, or qualified retirement plan (pension or profit sharing) established by an employer, you may be eligible to establish an IRA (Please consult a tax consultant or adviser before investing in any retirement plan). 

All earnings on your IRA contributions (deductible and/or nondeductible) remain tax deferred until you make withdrawals from the account.

  • You must maintain a minimum daily balance of $0.01 in your account each day to obtain the disclosed annual percentage yield.
  • Naming a beneficiary is highly recommended. Without naming a beneficiary, you run the risk of having your IRA assets paid to your estate and subject to probate. You will want to refer to the terms of your IRA plan agreement to verify how your IRA assets will be distributed.

  • Traditional IRA versus Roth IRA

    Feature Traditional IRA Roth IRA
    Maximum Annual Contribution
    Contribution maximum can be contributed to one account or split between both
    $5,500 (if under age 50)
    $6,500 (age 50 and over)
    $5,500 (if under age 50)
    $6,500 (age 50 and over)
    Tax Deductible of Contributions
    (Consult a tax adviser to see what tax advantages are available based on your financial situation)
    May be tax deferred up to 100%
    depending on Annual Gross Income and participation in an employer sponsored retirement plan
    Taxes are paid upfront
    Earnings Grows tax-deferred until withdrawn Grows tax-free
    Taxes Upon Withdrawal Withdrawals are taxed as income None, unless taxed for early withdrawals
    Withdrawal Restrictions Most withdrawals before age 59 1/2 result in IRS penalties Most withdrawals before age 59 1/2 result in IRS penalties
    Age at Which Withdrawals Must Begin 70 1/2 None

    Coverdell Education Savings Account (ESA)

    Contributions to a Coverdell ESA are not deductible, but amounts deposited in the account grow tax free until distributed.

  • The beneficiary will not owe tax on the distributions if they are less than a beneficiary’s qualified education expenses at an eligible institution.
  • This benefit applies to qualified higher education expenses as well as to qualified elementary and secondary education expenses.
  • May be used for qualified education expenses, such as tuition and fees, required books, supplies and equipment and qualified expenses for room and board.
  • The Hope and lifetime learning credits can be claimed in the same year the beneficiary takes a tax-free distribution from a Coverdell ESA, as long as the same expenses are not used for both benefits.

  • IRA Certificate

    Features include:
  • Dividends paid monthly, calculated daily.
  • Minimum opening deposit is $1,000.
  • Terms available: 1 year
  • Dividends earned are tax-deferred.
  • Contributions may be tax deductible.
  • Seven calendar days following maturity to withdraw funds or change certificate term. Otherwise it automatically renews for the same term at the current rate.



    IRA Certificate 1.00%
    Traditional IRA 0.20%
    Roth IRA 0.20%
    Coverdell Education Savings Account 0.20%

    *Annual Percentage Yield. Rates are subject to change without prior notice. Savings rates and terms effective October 1, 2018. Fees could reduce the earnings on the account. Penalty for early withdrawal of Savings and IRA Certificates.

    Direct Transfers and Rollovers

    Moving funds from another qualifying plan to a PHFCU IRA is simple and may be processed as a transfer or rollover. Consult a tax adviser to help decide which is best for you. Funds sent directly from another IRA to a PHFCU IRA.
  • Direct Transfers are not reported to the IRS.
  • Direct Rollover Funds distributed from a qualified retirement plan (e.g., 401(k) or Thrift Savings Plan) and deposited into a comparable IRA plan. Direct Rollovers are reported to the IRS.
  • Indirect Rollover Funds Distributed directly to you and must be deposited into an IRA account within 60 days to avoid being taxed. Indirect Rollovers are reported to the IRS.