INDIVIDUAL RETIREMENT ACCOUNTS (IRA)*

OVERVIEW

Individual Retirement Accounts (IRAs) offer a safe and convenient way members may gain the advantage of tax-deferred growth for their retirement investments. The credit union offers two investment options for your IRA: the IRA Savings Account and the Variable Rate IRA Term Share Certificate. All non-IRA deposits in a member's accounts at Latah Federal Credit Union are insured to at least $100,000 by NCUA, an agency of the federal government; IRA's are insured up to an additional $250,000.

Members may view IRA account dividend rates on the Credit Union's Dividend Rate and Fee Disclosure.

TERMS GOVERNING IRA, SAVINGS AND VARIABLE RATE TERM SHARE ACCOUNTS

These terms are effective as of February 4, 2004.

Deposits to and withdrawals from an IRA are subject to IRS regulations. The IRA owner must be the primary owner of the Regular Savings Account. The par value of a regular share in the credit union is $25.00.

There is a one-time set up fee of $3.00 for each type of IRA. Payment of this fee entitles the member to open any number of Variable Rate IRA term share certificates and IRA savings accounts as long as they are designated as the same type of IRA.

There is an annual fee of $9.00 per IRA. If a member opens more that one type of IRA (i.e both a ROTH and a Traditional) a fee will be charged for each IRA.

The terms governing this account are defined on the signature card, in the Dividend Rate and Fee Schedule, the appropriate IRA Trust Agreement and Disclosure, and in this document.

Latah Federal Credit Union reserves the right to make amendments to these or any subsequent terms governing the account by mailing a notice of such changes to the accountholder at least thirty days in advance of the amendments.

The dividend rate and annual percentage yield earned on the account's balance are disclosed in the Credit Union's Dividend Rates and Fee Disclosure.

Dividends will begin to accrue on the business day on which deposits are made.

The Credit Union uses the daily balance method of computing dividends, which applies a daily periodic rate to the full amount of principal in the account each day.

The dividend rate and annual percentage yield may change at any time, as determined by the Credit Union's Board of Directors.

Dividends are paid from current income and available earnings after required transfers to reserves at the end of a dividend period.

VARIABLE RATE IRA TERM SHARE
Minimum Balance

The minimum balance required to open an IRA at the credit union is $100.00 Additional deposits may be made to either type of IRA at any time.

Dividends

Accrued dividends are applied to any early withdrawal penalty. Dividends earned on variable rate IRA Term Shares are paid quarterly on the first day of January, April, July, and October.

Automatic Renewal

The maturity date of a Variable Rate IRA Term Share will be two years from the first day of the next calendar quarter following the date the Share is opened. For example, a Variable Rate IRA Term Share opened on March 15, 2006 will mature on April 1, 2008.

Variable Rate IRA Term Shares automatically renew at maturity for subsequent two year terms. The dividend rate on each subsequent term will be variable, with the same terms and balance requirements.

The member may instruct the credit union to cancel the automatic renewal and transfer the funds to an IRA Share Savings without incurring an early withdrawal penalty. The credit union must be contacted within ten calendar days of the maturity date.

Early Withdrawals

Withdrawals from IRA's require signed documentation. The penalty for early withdrawal of funds from the Variable Rate IRA Term Share will be equal to the dividend earned by the principal balance in ninety days. Early withdrawal may cause loss of principal.

There are certain circumstances, such as the death or incompetence of an owner, when the early withdrawal penalty may be waived or reduced. The penalty will be waived for persons over the age of 59 1/2 except when the withdrawn funds are transferred to another financial institution.

IRA SAVINGS ACCOUNT
Minimum Balance

An opening deposit of $100.00 is required to open this account.

Dividends

Dividends will be compounded and credited quarterly. Accrued dividends are not paid if the account is closed

Deposits

Deposits may be made at any time. Signed documentation is required to complete any deposit for a prior year. Any deposit not accompanied with a signed designation of tax year will be considered deposited for the current year. Deposit slips are not required.

Withdrawals

Withdrawals from IRA's require signed documentation, and the credit union may require seven days advance written notice of the withdrawal. There may be tax penalties for early withdrawal of your IRA funds, please consult the IRA Trust Agreement and Disclosure or a tax professional for information on your individual circumstances.

*The information in the page above is for informational purposes only and should not be construed as tax advice. Please consult with a tax advisor for questions and information regarding taxes and to determine if you would benefit from tax savings.