High-Yield Savings Accounts for Young Professionals Planning for Retirement

Find out how an IRA savings account can help you build your nest egg

You've just started your first job out of college, and you're enjoying watching the numbers in your checking account go up a little every month. You've even started a savings account and are making a monthly deposit. You might be thinking that's pretty good for now; after all, retirement is years away. However, the sooner you start saving, the more cash you'll have stockpiled for vacations, spoiling grandkids and healthcare expenses in retirement. Plus, IRA savings accounts are available with several flexible structures perfect to help you start saving for retirement from scratch.

Open an IRA savings with standard savings account interest rates to get started

If you're interested in saving for retirement now, an IRA savings account is a flexible way to build up the funds you need. With a low opening balance of just $50 and no early withdrawal penalties, the IRA Savings Plan at Citizens Bank is perfect for a young professional just starting to think about retirement. The account provides you with a competitive interest rate and the Steady Save® program, so you can save without even thinking about it.

Plus, unlike standard savings accounts, IRA savings are tax deferred until you withdraw the funds in retirement. Once you have built up your retirement savings with this account, you may want to roll the IRA funds into a high-yields savings account, which would have better savings account interest rates.

Grow your retirement funds with an IRA high-yield savings account

As your disposable income and savings grow, it may be time to look into an IRA savings option that is less liquid but provides greater savings opportunities. A high-yield savings account, like a certificate of deposit (CD), has higher savings account interest rates and will grow your retirement savings at a competitive, fixed rate during the term of the CD. When your CD term is up, you will need to roll the funds over into a new CD or other IRA savings account in order to maintain the tax-deferred benefits.

An IRA CD has a higher minimum deposit to open, and you may only make that one deposit during the term of the CD. For this reason, it may be advisable to open your IRA CD with a larger minimum balance, such as $1,000 to $2,000. However, unlike the IRA Savings Plan, you will face a withdrawal penalty if you remove funds before the end of the term. Therefore, it's very important you have enough savings and disposable income available to leave this type of IRA savings untouched.

Choosing to set up your IRA savings as Traditional or Roth IRAs

Both Traditional and Roth IRAs have their benefits, and you should speak to a representative before making the decision of which one is right for you. Traditional IRA contributions are typically tax-deductible in the year in which they are made, but you are required to make withdrawals starting when you pass age 70. Roth IRAs, on the other hand, are not tax-deductible but can be beneficial if you will be in the same or a higher tax bracket when you reach retirement. Both types of IRAs are capped at an annual contribution limit that may change each year.

Start saving for retirement with IRA savings accounts from Citizens Bank

At Citizens Bank, we have several IRA savings plans to help you prepare for retirement, including high-yield savings accounts and starter savings accounts with lower interest rates. Stop in to your local branch or speak to representative at 1-800-948-7200 for more information on IRA savings accounts and interest rates.


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