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#1911498 - 04/03/14 09:31 PM IRA Distributions/Transfers & Bank Penalties
Flash Friday Offline
New Poster
Joined: Apr 2005
Posts: 22
Hello -

We are having an internal debate about charging bank interest penalties on IRA distributions and IRA transfers and I am hoping to get a better idea of what other people are doing.

We routinely waive the bank interest penalty for IRA customers taking their annual RMDs. We charge the penalty for all other distributions or transfers (death of IRA holder excepted) unless the IRA CD is at maturity.

What does your bank do? Waive the penalty for distribtions for IRA holders 59 1/2 or 70 1/2? How about for transfers to other institutions?

Thanks in advance for your input.

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#1911892 - 04/04/14 05:46 PM Re: IRA Distributions/Transfers & Bank Penalties Flash Friday
bluesky Offline
Member
Joined: Jul 2005
Posts: 85
We waive the penalty for customers who take their RMD, whether they walk in or have an automatic IRA distribution. All other walk in's are subject to penalty unless the IRA CD is at maturity. If we get a transfer request, we charge $75 and cut the check directly to the other institution, must be at maturity or a penalty is assessed.
We have an IRA Savings product which we do not assess any penalty for those who want to make frequent distributions, minimum $500 distribution at a time.
We waive the IRA CD penalty if a customer agrees to set up automatic distributions for anyone age 59 1/2 and older. This prevents the frequent walk in's and taking up staff time.
Hope this helps!

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#1911909 - 04/04/14 06:07 PM Re: IRA Distributions/Transfers & Bank Penalties Flash Friday
el guapo Offline
Gold Star
el guapo
Joined: Jul 2004
Posts: 345
We only automatically waive our interest penalty for the client's actual mandatory distribution amount, based on the plan balance held at our financial institution as of 12/31 of the previous year. Any other distribution or transfer is subject to our normal interest penalty policy. We do also offer a Savings IRA product that allows for deposits or withdrawals at the client's convenience.

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#1916227 - 04/21/14 06:59 PM Re: IRA Distributions/Transfers & Bank Penalties Flash Friday
BlueEyes Offline
Junior Member
Joined: Jan 2004
Posts: 28
LA
We offer only CD's as IRA investment vehicles, but we do not charge customers of 59 1/2 or older a CD withdrawal penalty nor any other type of withdrawal fee.

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