Bank Trust Custodial Account


DEFINITION of 'Bank Trust Custodial Account'

A type of Individual Retirement Account (IRA) allowed by the Employee Retirement Income Security Act of 1974 (ERISA) in which contributions are paid into the bank's interest-bearing financial instruments or a self-directed account. The difference between a self directed account and the bank's interest bearing financial instrument is that the investor is in charge of investment decisions. Self-directed accounts are usually set up by a brokerage and the investor is charged an amount above trading costs.

BREAKING DOWN 'Bank Trust Custodial Account'

ERISA is federal legislation enacted to ensure that pension/retirement plans of employers are fair and secure. It is the law that established rules and regulations to govern private pension plans, including vesting requirements, funding mechanisms, and general plan design and descriptions.

  1. Vesting

    The process by which employees accrue non-forfeitable rights ...
  2. Assets Under Administration - AUA

    Financial properties that are managed by a bank or financial ...
  3. Natural Guardian

    A child's parent. In divorce situations, the parent with custody ...
  4. Custodial Account

    1. An account created at a bank, brokerage firm or mutual fund ...
  5. Employee Retirement Income Security ...

    The Employee Retirement Income Security Act of 1974 (ERISA) protects ...
  6. Guardian IRA

    An IRA held in the name of a legal guardian or parent on behalf ...
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  1. When can catch-up contributions start?

    Most qualified retirement plans such as 401(k), 403(b) and SIMPLE 401(k) plans, as well as individual retirement accounts ... Read Full Answer >>
  2. Who can make catch-up contributions?

    Most common retirement plans such as 401(k) and 403(b) plans, as well as individual retirement accounts (IRAs) allow you ... Read Full Answer >>
  3. Can you have both a 401(k) and an IRA?

    Investors can have both a 401(k) and an individual retirement account (IRA) at the same time, and it is quite common to have ... Read Full Answer >>
  4. How old do I have to be to make catch-up contributions?

    Most retirement plans such as 401(k), 403(b), individual retirement accounts (IRAs) and Roth IRAs allow for catch-up contributions ... Read Full Answer >>
  5. Do 401k contributions reduce AGI and/or MAGI?

    Traditional 401(k) contributions effectively reduce both adjusted gross income (AGI) and modified adjusted gross income (MAGI). ... Read Full Answer >>
  6. What is the catch-up contribution limit for qualified deferred tax plans?

    The U.S. Internal Revenue Service (IRS) established a $6,000 limit on the catch-up contribution to qualified deferred tax ... Read Full Answer >>

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