A Roth IRA account is a tax-qualified savings account for individuals that allows the account holder to set aside money for retirement. A Roth IRA differs from a traditional IRA in that the contributions to a Roth IRA account are fully taxable at the time they are deposited and that both the principal and the income earned in the account are tax-free when they are withdrawn as distributions.
An individual retirement account is a tax-deferred retirement schemes that can be started by anyone who earns employment income. Individuals who earn less than a certain amount (or who do not participate in their employer’s retirement plan) can generally deduct a part or all of their contribution to such schemes from their taxable income. Money in an IRA is taxed only when it is withdrawn.
A mutual fund is an investment vehicle managed by finance professionals that raises capital by selling shares (called units) in a chosen and balanced set of securities to the public.
A mutual fund’s capital is invested in a group (portfolio) of corporate securities, commodities, options, etc., that match the fund’s objectives detailed in its prospectus. The level of a mutual fund’s income from its portfolio determines the daily market value (called net asset value) at which its units are redeemable on any business day, and the dividend paid to its unit holders.
A certificate of deposit is a receipt issued by a depository institution (such as a bank, credit union, or a finance insurance company) to a depositor who opens a certificate account or time deposit account. Issued in a negotiable or non-negotiable form, it states the (1) amount deposited, (2) rate of interest, and (3) minimum period for which the deposit should be maintained without incurring early withdrawal penalties.
A checking account is a bank account which pays little or no interest, but from which the customer can withdraw money when he or she wants by writing checks.
Also called cheque account.
A savings account is an account maintained by a bank for other depository (1) from which withdrawals can be made, (2) interest accrues on the account balance, (3) does not have any maturity date, and (4) usually does not require a minimum balance.