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What are the different ways I can take a distribution from my Roth IRA?

There are multiple options for taking distributions from your IRA, each of which may be subject to, for example, differing tax treatment, IRS penalties, and / or specific procedural requirements. Accordingly, we recommend that you consult your financial or tax advisor for advice on the best approach to taking distributions from your IRA.

The following are classifications for distributions from your Roth IRA. You can process a distribution by submitting the IRA Distribution Request form.

Qualified Distributions: Qualified Distributions are tax-free and penalty-free if the Roth IRA has been open for at least 5 years and you have reached age 59½, or an IRS exemption applies.

Non-Qualified Distributions: Any distribution that is not a Qualified Distribution. Non-Qualified Distributions may be taxed as income and may be subject to the IRA premature-withdrawal penalty.

Bank to Bank Transfers: Your IRA funds held at AENB which we directly transferred to your IRA at another company. A transfer is the nonreportable movement of assets between IRAs of the same type.

Return of Excess Contributions: An excess contribution occurs when the contribution amount exceeds allowable limits, including when making an improper rollover contribution or when an ineligible individual makes a contribution. For correction purposes, an IRA owner can treat an unwanted contribution as an excess. The IRS will charge you a 6% penalty/excise tax on the excess amount for each year in which you don't take action to correct the error. For this situation, please submit the IRA Return of Excess Contribution Worksheet.

Other Distributions: Any distribution not covered in another category.

 

 


 

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Accounts offered by American

Express National Bank. Member FDIC. Each depositor is insured to at least $250,000.

Learn More from FDIC.gov

*The Annual Percentage Yield (APY) as advertised is accurate as of . Interest rate and APY are subject to change at any time without notice before and after a High Yield Savings Account is opened.

 

For a CD account, rates are subject to change at any time without notice before the account is opened. Your rate will be fixed on the business day‡ we receive your completed application, provided we receive your deposit within 30 days after your application is approved. After a CD is opened, additional deposits to the account are not permitted. Early CD withdrawals may be subject to significant penalties which could cause you to lose some of your principal. Please see the Deposit Account Agreement for additional terms and conditions and Truth-in-Savings disclosures.

 

**The national rate referenced is from the FDIC's published Monthly Rate Cap Information for Savings deposit products. Visit the FDIC website for details.

 

†You are generally permitted to make up to nine (9) withdrawals or transfers out of your High Yield Savings Account during a monthly statement cycle. However, please note that there are strict rules for withdrawing money from an IRA plan (including an IRA High Yield Savings Account) before retirement age without incurring a penalty. Read More in FAQs.

 

‡For purposes of transferring funds, business days are Monday through Friday, excluding holidays. Transfers can be initiated 24/7 via the website or phone, but any transfers initiated after 7:00 PM Eastern Time or on non-business days will begin to be processed on the next business day.

 

♢Calculations are estimates of expected interest earned. Actual results may vary, based on various factors such as leap years, timing of deposits, rounding, and variation in interest rates. The first recurring deposit is assumed to begin in the second period after any initial deposit.

 

§IRA Contributions are subject to aggregate annual limits across all IRA plans held at American Express or other institutions. IRA distributions may be taxed and subject to penalties based on IRS guidelines. Required minimum distribution, if applicable, is only relevant to this IRA plan and does not take into consideration other IRA plans held at American Express or other institutions. Please see IRS.gov for more information. We recommend you consult with a financial or tax advisor when making contributions to and distributions from an IRA plan account.