Which IRA is a better savings plan for down payment?

Guest 0.10 Dollars($)

I would like to invest in a savings plan and then take out money from there to use it for down payment on a house. Will it better if I go for Roth IRA instead of traditional IRAs for this purpose

helping_user

Hi Sandra,

Investing money in an IRA is just like using an investment rather than cash. There is a degree risk involved as in any other investment. So, just to make sure that your down payment is safe and you are able to collect the money as asap, don't use the IRAs. Instead, you can try out other sources for making down payment. These can be your 401k plan account, gift funds from relatives and friends, and bond programs offered by government, state and non-profit agencies.

Thanks

Guest 0.10 Dollars($)

If you use a Roth IRA, it will be subjected to income limitations. Moreover, the money in the Roth IRA account should remain intact till the first 5 years of opening the account. But in a traditional IRA, there are no such income limitations as in Roth IRA.

Caron

Hi Sandra,

Instead of dealing with the complications of a Roth IRA, it is better for you to set up a bank savings account for the down payment.The interest rates on this account are competitive. So, you can open this account; it will help you to get the money as and when required. There is no need to wait till 5 years have passed after opening the savings account just like a Roth IRA. Also, the money deposited in a savings account is not subjected to stock market risk.

Thanks,

Caron.

aladysiren · Joined: 10 May 2007 Posts: 22 8.78 Dollars($)

You can also try opening a savings account with ing direct they offer a interest rate of 4.50% for savings also shop around for high interest rate for a CD ing also have 6mths for 5.00%, 9mths for 5.25%.

Guest 0.10 Dollars($)

Is any fee required to open a savings account and that too with ing direct?How much should i keep there as the minimum balance?

aladysiren · Joined: 10 May 2007 Posts: 22 8.78 Dollars($)

No there is no fee for opening a savings account you can visit the site to learn more www.ingdirect.com

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