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Simplified Employee Pension (SEP)
A Simplified Employee Pension (SEP) is a plan wherein an employer can make a contribution to each employee’s Traditional IRA (including his or her own Traditional IRA if self-employed). The contribution is tax deductible to the employer. The tax deferred earnings apply to the employee. For the year 2007 contributions cannot exceed 25% of the employee’s compensation or $45,000, whichever is less. For the year 2008 contributions are limited to 25% of the employee’s compensation or $46,000, whichever is less.
Features:
Accounts are FDIC insured. Available investments include a savings account and various certificates of deposit. The minimum balance required to open a savings account is $10. The minimum balance required to open a certificate of deposit is $500.
Rates:
Rates depend upon the type of investment selected.
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