Easy to move Roth CD to new institution

Don Taylorq_v2.gifDear Dr. Don,
If you opened a Roth IRA as a CD, when the CD matures, must you renew it at the institution it was taken out at, or can you take it out and reinvest it in another CD at another bank without being penalized or taxed when you do?
-- Raymond Retirement

a_v2.gifDear Raymond,
You can move the money without triggering any penalty or income tax impact. You just need to either effect a rollover contribution or a trustee-to-trustee transfer. IRS Publication 590, "Individual Retirement Arrangements" has more details, but I've included a couple of quotes from the publication below.

Can You Move Retirement Plan Assets?

You can transfer tax free, assets (money or property) from other retirement programs (including traditional IRAs) to a traditional IRA. You can make the following kinds of transfers:

  • Transfers from one trustee to another
  • Rollovers
  • Transfers incident to a divorce.

Time Limit for Making a Rollover Contribution

You generally must make the rollover contribution by the 60th day after the day you receive the distribution from your traditional IRA or your employer's plan.

Trustee-to-Trustee Transfer

A transfer of funds in your traditional IRA from one trustee directly to another, either at your request or at the trustee's request, is not a rollover. Because there is no distribution to you, the transfer is tax free. Because it is not a rollover, it is not affected by the 1-year waiting period required between rollovers.

The new custodian is usually quite helpful in working with you on a trustee-to-trustee transfer. You have your choice of bank, brokerage or mutual fund accounts in setting up the new IRA account. A bank IRA account has the backstop of FDIC insurance up to $250,000 for a qualified retirement account, but the decision where to invest should be made after considering how all your assets are invested.


Show Bankrate's community sharing policy
          Connect with us
Product Rate Change Last week
30 year fixed 4.12%  0.06 4.18%
15 year fixed 3.25%  0.04 3.21%
5/1 ARM 3.48%  0.16 3.32%
View Rates in your area Next
Product Rate Change Last week
30K FICO-based HELOC 4.30%  0.01 4.29%
50K FICO-based HELOC 4.06%  0.02 4.04%
100K FICO-based HELOC 3.91%  0.02 3.89%
View Rates in your area Next
Product Rate Change Last week
60 month used car loan 2.79% --0.00 2.79%
48 month used car loan 2.99% --0.00 2.99%
60 month new car loan 3.23%  0.01 3.24%
View Rates in your area Next
Product Rate Change Last week
1 Year CD 0.97% --0.00 0.97%
2 Year CD 1.18%  0.01 1.17%
5 Year CD 1.81%  0.05 1.76%
View Rates in your area Next
Product Rate Change Last week
Balance Transfer Cards 15.75% --0.00 15.75%
Cash Back Cards 16.45% --0.00 16.45%
Low Interest Cards 10.96% --0.00 10.96%

Learn the latest trends that will help grow your portfolio, plus tips on investing strategies. Delivered weekly.


Jennie Phipps

2015 COLA looks chintzy

It looks like the 2015 COLA will be about 1.7 percent -- bad news for Social Security recipients hoping for more.  ... Read more

Partner Center

Connect with us