Individual Retirement Accounts are available for individuals to set aside funds for retirement and take advantage of tax deferred* or tax free* interest income when the funds are withdrawn. You will want to consult with your tax advisor for details, but in the meantime, F&M Bank can get you headed in the right direction.

Our IRAs are structured the same as our Certificates of Deposit with regard to term & rate:

  • Minimum opening deposit of $500.00
  • Terms from 6 to 60 months.
  • Automatically renewable after 10 day Grace Period
  • Renewal notice mailed 10 days prior to maturity
  • 18-Month Variable Rate CD – a low minimum deposit of $100, and you can make additional deposits to your IRA/CD

Early withdrawal will result in forfeiture of three month's interest on certificates with maturities up to 60 months, and six month’s interest on certificates with 60 month maturity. Minimum penalty is $10.00. No forfeiture of interest for IRA holders 70 ½ years of age and older.

See our Rate Sheet for current CD rates that apply to deposits used for IRA’s.

Farmers & Merchants Financial Services, Inc. offers additional options for retirement investments, utilizing mutual funds, stocks, bonds, and other investment programs.

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How much do you need to save to provide the retirement income you’ll need? Check out our Financial Calculators to start a plan!

Traditional IRA

The contribution limits on Traditional IRA’s for  2016 are $5,000, with an additional $1,000 contribution for qualified individuals over age fifty.

In addition, you will receive a full tax deduction* for your contribution if you and your spouse are not covered by an employer sponsored retirement plan. If you or your spouse are participants in an employer sponsored retirement plan, your income and filing status will determine the amount of your deductible contribution.

A full deduction for 2016 is available if your 2016 income is:

Single - less than $58,000
Married filing jointly – less than $92,000

Also, if you’re married and filing jointly and either you or your spouse is covered by a retirement plan, the spouse who isn’t covered can make a fully deductible contribution* as long as your combined MAGI doesn’t exceed $169,000 in 2016.

Important Note:
The 10% penalty for early withdrawals does not apply to distributions of up to $10,000 for first time home buyer expenses or to distributions used for qualified educational expenses.

Roth IRA

With the Roth IRA, your withdrawals can be completely tax-free* - but you cannot deduct your annual contributions.

It is always best to consult your tax advisor for details relevant to your specific needs. However, here are a few basic rules that govern Roth IRA's:

You can contribute to a Roth IRA for 2016 if:

  1. You have earned income (or your spouse has earned income) AND
  2. Your modified adjusted gross income (MAGI) cannot exceed certain limits (see below)
MAGI of $110,000 or Less MAGI Between $110,000 and $124,999 MAGI of $125,000 or More
Full $5,000 Contribution Partial Contribution No Contribution


Married, Joint Filers
MAGI of $173,000 or Less MAGI Between $173,000 and $182,999 MAGI of $183,000 or More
Full $5,000 Contribution Partial Contribution No Contribution


  • An aggregate of $5,000 annually can be contributed to a combination of Roth & Traditional IRA's.
  • You do not pay taxes* on your earnings if they are part of a qualified distribution
  • A qualified distribution includes participation in a Roth IRA for over 5 years and:
    o Distributions made on or after the date on which you attain age 59½; or
    o Distributions made to your beneficiary (or your estate) upon your death
    o Distributions attributable to your being disabled
    o Distributions for qualified first-time home buyers (up to $10,000)

An additional $1,000 contribution can be made for qualified individuals over age fifty.

Educational IRA

The Education IRA (now known as Coverdell Education Savings Account) is a great way to save for a child's higher education. Although the contributions are not tax-deductible*, the earnings grow tax-free provided that the funds are used to pay for the higher education expenses of the designated child. The contributions are limited to $2,000 per year, per child under the age of 18.

Contributions to a Coverdell Education Savings Account are not tax-deductible, but distributions used to pay for the qualified education costs of the named beneficiary are generally tax free*.

The income limits for eligibility to contribute are:

  Full $2,000 Contribution if your AGI is less than: Partial Contribution if your AGI is between:
Single Filer <= $95,000 $95,000 - $110,000
no contribution if over $110,000
Married Filing Jointly <=$190,000 $190,000 - $220,000
no contribution if over $220,000


See our Rate Sheet for current interest rates on Certificates of Deposit that can be used as Coverdell Education accounts.

* Consult a tax adviser regarding the deductibility of interest

Visit our Financial Answer Center for more information, plus a free, personalized Quick Guide.




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