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There are four types of IRAs: Traditional IRA, Spousal IRA,
Roth IRA, and
Coverdell Education Savings Account (formerly Education IRA). There are
three employer-sponsored plans: SIMPLE IRA, 401(k), and 403(b). There are
also two plans available to the self-employed: SEP-IRA & Keogh. Medical Savings
Accounts (MSA) exist but are rarely used due to their complexity and hidden
traps.
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Investors searching for relatively low-risk investments that can easily be
converted into cash often turn to certificates of deposit (CDs). A
CD is a
special type of deposit account with a bank or thrift institution that
typically offers a higher rate of interest than a regular savings account.
Unlike other investments, CDs feature federal deposit insurance up to $100,000.
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