Types of Investment Accounts

There are many reasons why people should consider opening investment accounts. Investment accounts are designed to help secure retirement, education, and can also educate those who want know more about different ways to maintain money. Listed below are some examples of different types of investment accounts.

401(k)

This type of investment account is known as a contribution plan, and is one of the most popular because it has a great deal of benefits, such as:

• Retirement security




• Low taxable income




• Accumulated earnings

A 401 (k) is offered by an employer.

Traditional IRA

This is also a retirement plan that has many benefits, such as investing pre-taxed money into an account. There are certain income requirements that are necessary to open this type of investment account. However, the money put into the account is tax deductible.

Roth IRA

A Roth is similar to the traditional IRA, except it is not tax-deductible. Roth accounts also allows individuals to combine accounts together without a penalty.

529 plan

This is a college saving plan designed to help pay for a college expenses. A parent usually has custodial rights until the child is of age.