An IRA is a retirement savings plan which enjoys preferential tax treatment. Contributions may be partially or wholly deductible on income tax returns. An individual, up to the age of 70 1/2 may contribute to an IRA even if she/he is an active participant in another retirement plan. All earnings on IRA's remain tax-deferred (until withdrawals are made from the account at retirement) regardless of whether the contribution is deductible. Wage earners may deposit 100% of earned income. The deposit may not exceed $4,000 in 2006. In 2008, the limit will increase to $5,000. IRA holders age 50 or older may contribute $500 in excess of the basic annual contribution. This amount increases to $1000 in 2006. All our certificates of deposit may be used for an IRA.

Husbands and wives may each have an IRA, even if one person in that marriage is not working. A separate spousal IRA account must be established, not to exceed $4,000 per year ($4500 if over 50).

Contributions to a traditional IRA may or may not be deductible in the tax year made, depending on the owner’s income tax filing status, adjusted gross income, and eligibility to participate in a tax-qualified retirement plan through employment. See your tax advisor for your IRA tax deductibility. There are no dollar limitations on rollovers or transfers.

Any United certificate is available as an IRA as long as the minimum requirements are met. The Bank has two certificates designed exclusively for IRAs.

18-month Variable Certificate: There is no minimum to open this account and additions may be made in any amount (not exceeding yearly limit). Once established, the variable IRA rate changes monthly, and the interest is compounded monthly.

3 -Year IRA Certificate: The minimum opening balance is $1,000, and no additions are allowed on the fixed rate certificate. A new certificate must be purchased to add to the IRA. The rate is guaranteed for the term of the certificate, and interest is compounded semiannually.

All deposits to an IRA account must be made no later than April 15th to qualify as a deduction for the previous tax year.

There are no set-up, transaction or annual fees on an IRA account.

Withdrawals made from IRA accounts before the individual reaches age 59 ½ may be subject to penalties of the Internal Revenue Service. Funds withdrawn before the eligibility date are taxed as ordinary income in the year withdrawn and a 10 percent penalty tax will be imposed by the IRS. In addition, if a certificate is withdrawn before the maturity date, the Bank charges the certificate penalty.

There are eight exceptions to the 10% penalty for IRA withdrawals prior to age 59 ½. The early withdrawal penalty does not apply to distributions that:

• Occur because of the IRA owner’s disability
• Occur because of the IRA owner’s death
• Are a series of "substantially equal periodic payments" made over the life expectancy of the IRA owner
• Are used to pay for non-reimbursed medical expenses that exceed 7 ½% of adjusted gross income
• Are used to pay medical insurance premiums after the IRA owner has received unemployment compensation for more than 12 weeks
• Are used to pay the costs of a first time home purchase (subject to a lifetime limit of $10,000)
• Are used to pay for the qualified expenses of higher education for the IRA owner and/or eligible family members
• Are used to pay back taxes because of an Internal Revenue Service levy placed against the IRA

Individuals must begin receiving distributions from IRA accounts no later than age 70 1/2.

Please contact one of United's Banking Center Managers for more information and to open your IRA account today!