Custodial Accounts

As the name implies, custodial accounts are accounts maintained by a custodian--generally a bank, credit union or similar financial institution. Funds in a tax-sheltered annuity (TSA) custodial account must be invested in mutual funds and only mutual funds.

Custodians may make loans from a TSA custodial account, holding the note as a plan asset. Loans must be repaid in full within five years, however.

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