When you're looking at ads for Individual Retirement Accounts, what you see is not necessarily what you get. Not all the terms and conditions may be explained, and you cannot tell by interest rates alone which institution offers you the best deal.

For example, a bank offering 8 percent compounded daily can pay you more than a competing bank offering 8.2 percent compounded semi-annually, Richard Morse, Professor of Family Economics at Kansas State University, told my associate, Virginia Wilson. The difference lies in the compounding.

The first bank pays $8.45 a year for every $100 you have on deposit (assuming, it counts a year as 360 days, as many banks do). The competing bank would pay $8.37--8 cents less. Yet IRA shoppers might logically choose the second bank, because 8.2 percent sounds like the higher rate.

To help you solve these problems, the federal government requires institutions to give you a disclosure statement before you invest in an IRA. But many of those statements do not contain the information required by law and the government is not exerting itself to enforce the law. The prevailing attitude in Washington appears to be that--given everything else to be done--misleading disclosure statements don't really matter very much.

Joe A. Mintz of Dallas, editor of the NROCA Retirement Newsletter, recently sent a group of IRA disclosure statements to the Internal Revenue Service, which is supposed to keep disclosure honest. His sampling included documents from some of the nation's largest banks and savings and loan associations.

The IRS's S. Allen Winborne, the assistant commissioner who reviewed the documents, agreed that part of them violated the law. "We are referring the IRA disclosure statements that you sent us to our field offices for appropriate action," he wrote. That was last August.

The IRS will not disclose what, if anything, has since been done. And it points out that the banks have the right to appeal an IRS decision. Mintz says he recently checked on one of the institutions that the IRS agreed had misleading elements in its disclosure statement, and found it unchanged.

So what is wrong with bank and S&L disclosure? Enough to defeat its basic purpose, which is to help you compare the IRAs offered by various institutions, so that you can make an informed choice. The interest rate alone may be misleading, as the opening paragraphs of this column show. The only way to tell which bank or S&L pays more is to get a dollars-and-cents projection of what the account will pay you over the years.

Under federal law, banks and S&Ls are supposed to give you such projections, showing what you'll have at the end of each of the first five years if you want to withdraw it all, and what you'll have when you reach the age of 60, 65, and 70.

The projections are supposed to reflect withdrawal penalties, for money taken out of savings certificates before maturity. "For example," writes Winborne, "if all the contributions to an IRA are invested in a certificate of deposit which carries a penalty on withdrawals prior to 10 years from the date of issuance, the disclosure statement must reflect the amount available in each of the first five years of the IRA, taking into account the withdrawal penalty."

However, many banks and S&Ls do not subtract withdrawal penalties in making their projections. If you compare the disclosure statement of a bank that does not subtract penalties with the statement of a bank that does, the first bank would probably show a larger accumulation of money--even if it actually paid a lower interest rate. This could mislead you into putting your money into the lower-yielding IRA.

Statements that do not show withdrawal penalties also overstate the amount of money that you will actually have at your disposal at various ages. So you are not building as large a nest egg, in these institutions, as they make it seem.

If it would help you to have a worksheet when seeking better information from institutions selling IRAs, Mintz will send you one, plus his newsletter detailing the problems with IRA disclosure, for $3 (from NROCA Press, Department M, P.O. Box 12066, Dallas, Tex. 75225). Useful Numbers To order documents from the Government Printing Office:

Superintendent of Documents

U.S. Government Printing Office

Washington, D.C. 20402

(202) 783-3238 Offices of any member of Congress and committees and subcommittees can be reached by calling (202) 224-3121. Legislative Status Office: Information on status of legislation in either House or Senate, whether Committee hearings have been held and dates of upcoming hearings, number of Committee reports, etc. (202) 225-1772.