At what point can I take my initial deposits out. Is it immediate or is there a waiting period

For regular contributions to either a Traditional IRA or a Roth IRA, there is no waiting period. If this is a Roth you are talking about, you can take out an amount up to your total contributions without any penalty, and no tax since Roth IRAs are made up of taxed money. If this is a Traditional IRA, you will pay tax depending on the proportion of your IRA which was made up of deductible contributions and earnings versus non-deductible contributions (the proportion attributable to deductible contributions and earnings will be taxed). For the Traditional IRA, you may also have to pay a 10% penalty unless the money is used for a qualifying expense. I strongly urge you to try all other avenues before tapping the account. You'll lose valuable growth time, and you will only be able to replenish what you took out following the yearly limit rules (e.g. $3000 each year, as of 2002).

I thought tha an IRA owner had 7 days from the date of deposit to cancel deductible IRA contributions without paying the 10% penalty tax. Check the custodial agreement. After that period expires all distributions are taxable if a deductible IRA has been opened.

This is for a Roth IRA. Instead of putting it in a CD or something like that for the short term. I feel it will be more beneficial for me to put the initial investment into the Roth. At least if there is an emergency, I won't need to worry about the taxes or penalties on initial investements.

Thanks for the help

mbozek

What you refer to is the revocation of an IRA. This must be done within 7-days of the IRA being established. For an IRA that is timely revoked, the funds must be returned to the IRA owner. No fees or commissions can be charged, as the IRA owner must be refunded at least the full amount of the contribution.