An individual retirement account (IRA) certificate of deposit is a savings option for those looking for a guaranteed return on retirement funds.
Investing in an IRA CD is relatively easy. It’s similar to purchasing a regular certificate of deposit, but instead of using money from your checking or savings account, you transfer funds from an IRA or another retirement account.
IRA CDs are safe investments and appeal to investors who like the predictability that comes with a fixed annual percentage yield (APY). Use Bankrate’s CD calculator to see exactly how much money you will earn over the term of the IRA CD.
What is an IRA CD?
An IRA CD is an individual retirement account where your money is parked in a certificate of deposit, a time-deposit account that pays interest at a set rate in exchange for the saver agreeing to deposit cash for a set term. CD terms vary, usually ranging from three months to 10 years. CDs generally offer a higher rate than savings accounts because they are less liquid.
The best one-year IRA CD yields are about four times the national average of 0.72 percent APY, according to Bankrate’s national index survey of banks and thrifts from Sept. 14, 2022.
Typically, your options are a traditional IRA or Roth IRA. The tax advantages for each are different. Bankrate’s IRA calculator can help you compute and compare potential earnings for both types.
You may want to consider getting an IRA CD if your tolerance for risk is low and you’re looking for a guaranteed return to boost your retirement savings while enjoying tax advantages. IRAs are subject to contribution limits and not all contributions are eligible for tax savings. Check with your tax advisor if you have questions.
Of course, CDs aren’t the only investment option for those looking to put their money into an IRA. Stocks, bonds, mutual funds and money market funds are also popular options.
Bankrate’s picks for the top IRA CD rates
- Citibank: 0.05%-3.20% APY (3 months-5 years); $250 minimum deposit
- Synchrony Bank: 1.50%-3.50% (3 months-5 years); $0 minimum deposit
- Bethpage Federal Credit Union: 1.75%-3.25% APY (3 months-5 years); $50 minimum deposit
- Alliant Credit Union: 2.75%-3.25% (1 year-5 years); $1,000 minimum deposit
- Ally Bank: 0.75%-3.00% (3 months-5 years); $0 minimum deposit
- Pentagon Federal Credit Union: 2.70%-3.20% (1-7 years); $1,000 minimum deposit
- Discover Bank: 0.75%-3.25% (3 months-10 years); $2,500 minimum deposit
- Navy Federal Credit Union: 0.40%-3.15% (3 months-7 years); $1,000-$100,000 minimum deposit for tiered APYs
- Randolph-Brooks Federal Credit Union: 1.76%-2.94% (6 months-7 years); $1,000 minimum deposit
- America First Credit Union: 1.50%-2.75% (3 months-5 years); $500 minimum deposit
- First Technology Federal Credit Union: 1.20%-2.80% (6 months-5 years); $500-$50,000 minimum deposit for tiered APYs
- Security Service Federal Credit Union: 0.65%-3.25% (3 months-7 years); $500-$100,000 minimum deposit for tiered APYs
- SchoolsFirst Credit Union: 0.10%-2.90% (30 days-5 years); $500-$100,000 minimum deposit for tiered APYs
- VyStar Credit Union: 0.65%-2.50% (3 months-5 years); $500-$50,000 minimum deposit for tiered APYs
Note: Annual percentage yields (APYs) shown are as of Sept. 14, 2022. Rates for some products vary by region, and some APYs require higher balances than the minimum deposit. Banks are listed in order of top APYs for one-year IRA CDs with a $25,000 balance.
Which IRA CD is best for you depends on your goals. Consider the rate offered along with other factors, including the minimum deposit required and maturity date. Rates vary by the term of the CD. Some banks may offer more competitive rates on five-year IRA CDs, for example, but not for six-month IRA CDs. Consider your time horizon when deciding how best to invest.
A closer look at the top IRA CD rates
Here are Bankrate’s picks for the best IRA CD rates:
Citibank: 0.05%-3.20% APY (3 months-5 years), $250 minimum deposit
Citibank is one of the largest banks in the U.S. It offers IRA CDs with terms ranging from three months to five years.
Synchrony Bank: 1.50%-3.50% APY (3 months-5 years), $0 minimum deposit
Synchrony Bank, formerly known as GE Capital Bank, is a subsidiary of Synchrony Financial. Synchrony Bank offers Roth IRA CDs and traditional IRA CDs.
Opening an IRA CD with Synchrony Bank can only be done over the phone, as Synchrony has no branches and doesn’t offer an online application. Its corporate headquarters are in Draper, Utah.
Bethpage Federal Credit Union: 1.75%-3.25% APY (3 months-5 years), $50 minimum deposit
Bethpage Federal Credit Union was founded 80 years ago.
Bethpage Federal Credit Union’s main office is located in Bethpage, New York. It has around 435,000 members and offers nine terms of IRA CDs. The three-month CD is the shortest term and the five-year CD is the longest term.
Besides IRA CDs, Bethpage offers regular CDs, checking accounts, savings accounts, a money market account, loans and other financial products.
Alliant Credit Union: 2.75%-3.25% APY (1 year-5 years), $1,000 minimum deposit
In 1935, what’s now Alliant Credit Union was founded as the United Airlines Employees’ Credit Union. Alliant has 450,000 members nationwide.
Alliant IRA certificates are available as a traditional IRA, Roth IRA and SEP (simplified employee pension) IRA.
Ally Bank: 0.75%-3.00% APY (3 months-5 years), $0 minimum deposit
Ally Bank is an online-only bank that offers more CD options than most direct banks. Ally Bank gives savers options with a High Yield CD and a Raise Your Rate CD. If you fund your IRA CD within 90 days, you’ll get its best rate for the term and balance on either the day you open or the day you fund the account. Ally Bank IRA CDs are available as a traditional, Roth and simplified employee pension (SEP) IRA.
Pentagon Federal Credit Union: 2.70%-3.20% APY (1 year-7 years), $1,000 minimum deposit
Pentagon Federal Credit Union was established in 1935. It has more than 2 million members and has its main office in McLean, Virginia.
PenFed has six terms of IRA CDs, ranging from one year to seven years. There are no early withdrawal penalties on the principal.
Discover Bank: 0.75%-3.25% APY (3 months-10 years), $2,500 minimum deposit
Discover Bank eliminated fees on its deposit products in June 2019. Interest on Discover Bank CDs is compounded daily and credited monthly. Discover Bank provides a nine-day grace period after a CD matures. Its headquarters are in Greenwood, Delaware.
Navy Federal Credit Union: 0.40%-3.15% APY (3 months-7 years), $1,000-$100,000 minimum deposit for some APYs
Navy Federal Credit Union is the world’s largest credit union. It has a global network of 340 branches. Navy Federal Credit Union has its headquarters in Vienna, Virginia.
Membership at Navy Federal Credit Union is open to all Department of Defense and Coast Guard Active Duty, civilian, contract personnel, veterans and their families.
In addition to CDs, Navy Federal Credit Union also offers checking and savings accounts, loans and credit cards.
Randolph-Brooks Federal Credit Union: 1.76%-2.94% APY (6 months-7 years), $1,000 minimum deposit
Randolph-Brooks Federal Credit Union was established in 1952 and has its main office in Live Oak, Texas. It serves four major markets: Austin, Corpus Christi, Dallas-Fort Worth and San Antonio. The credit union has more than 1 million members.
In addition to its range of IRA certificates with terms from six months to seven years, Randolph-Brooks offers a Really Free Checking account that requires no minimum balance and charges no monthly fee.
America First Credit Union: 1.50%-2.75% APY (3 months-5 years), $500 minimum deposit
America First Credit Union was founded in 1939. It has more than 1.2 million members. In addition to IRA CDs, America First has checking accounts, savings accounts and different types of CDs.
First Technology Federal Credit Union: 1.20%-2.80% APY (6 months-5 years), $500-$50,000 minimum deposit for tiered APYs
First Technology Federal Credit Union was founded in 1952 by a few Hewlett-Packard and Tektronix employees. You can join if you work for a company on its partner list, work for the state of Oregon, live or are employed in Lane County, Oregon, or if you belong to the Computer History Museum or the Financial Fitness Association.
Security Service Federal Credit Union: 0.65%-3.25% APY (3 months-7 years), $500-$100,000 minimum deposit for tiered APYs
Security Service Federal Credit Union offers membership to residents of Colorado, Texas and Utah, as well as people who work, attend school, volunteer or have businesses in those states. Members of certain military branches or units are also eligible, as are household family members of existing credit union members.
Many Security Service branches in Colorado and Texas offer free, self-service coin-counting machines. Members are able to schedule appointments to meet virtually with credit union representatives for help with opening accounts, applying for loans and other banking needs.
SchoolsFirst Federal Credit Union: 0.10%-2.90% APY (30 days-5 years), $500-$100,000 minimum deposit for some APYs
SchoolsFirst Federal Credit Union was formed by school employees in 1934 during the Great Depression and has 50 branches.
CDs at SchoolsFirst Federal Credit Union feature low minimum balances, terms from 30 days to five years, and four balance tiers: $500, $20,000, $50,000 or $100,000.
VyStar Credit Union: 0.65%-2.50% APY (3 months-5 years), $500-$50,000 minimum deposit for tiered APYs
VyStar Credit Union was founded in 1952. It was originally called Jax Navy Federal Credit Union and it was chartered at Naval Air Station in Jacksonville, Florida.
VyStar Credit Union offers 10 CD terms ranging from three months to five years. It also offers a one-year CD for children.
Membership at VyStar is open to current and past military members and their family members. You can also join VyStar if you work or live in one of the 49 Florida counties or the 10 Georgia counties listed on its website.
Pros and cons of investing in an IRA CD
Before opening an IRA CD, weigh the pros and cons to see if it’s the right product for you.
- A guaranteed return on your investment (as long as you don’t withdraw from your CD before it matures).
- Your money is insured up to $250,000 as long as it is held at an FDIC-insured bank or an NCUA credit union.
- You won’t have to worry about fees unless you’re penalized for tapping into your account before it matures.
- If you’re younger, you may want to invest in something with the potential for a higher return.
- The rate you earn may not keep up with inflation.
IRA CD risks
IRA CDs are just as safe as a regular CD, as long as they are opened at an FDIC-insured bank or an NCUA credit union and don’t surpass the insurance limits. For instance, IRAs fall in the “Certain Retirement Account” category at the FDIC. The coverage limit is $250,000 per owner on IRAs at an FDIC bank in a deposit product, such as a savings account or a CD. At a credit union, the National Credit Union Share Insurance Fund covers an IRA separately from insurance coverage on your other credit union accounts. The NCUSIF covers an IRA at a credit union up to an additional $250,000.
Use the FDIC Electronic Deposit Insurance Estimator and contact your FDIC-insured bank to confirm that your account is insured. At a credit union, use the Share Insurance Estimator and contact your credit union to confirm your account meets insurance requirements.
IRA CD FAQs
Methodology for Bankrate’s Best CD Rates
At Bankrate, we strive to help you make smarter financial decisions. We follow strict guidelines to ensure that our editorial content is unbiased and not influenced by advertisers. Our editorial team receives no direct compensation from advertisers and our content is thoroughly fact-checked to ensure accuracy.
Bankrate regularly surveys around 70 widely available financial institutions, made up of the biggest banks and credit unions, as well as a number of popular online banks.
To find the best CDs, our editorial team analyzes various factors, such as: annual percentage yield (APY), the minimum needed to earn that APY (or to open the CD) and whether or not it is broadly available. All of the accounts on this page are insured by the Federal Deposit Insurance Corp. or the National Credit Union Share Insurance Fund.
When selecting the best CD for you, consider the purpose of the money and when you’ll need access to these funds to help you avoid early withdrawal penalties.
Banks we monitor
These financial institutions are featured in our savings rate research: Alliant Credit Union, Ally Bank, Amerant Bank, America First Credit Union, American Express National Bank, Axos Bank, Bank 5 Connect, Bank of America, Bank of the West, Barclays, Bask Bank, BECU (Boeing Employees Credit Union), Bethpage Federal Credit Union, BMO Harris Bank, Bread Savings (formerly Comenity Direct), BrioDirect, Capital One Bank, Chase Bank, CIBC USA, CIT Bank, Citibank, Citizens, Citizens Bank (Rhode Island), Credit One Bank, Comerica Bank, Customers Bank, Delta Community Credit Union, Discover Bank, Emigrant Direct, Fifth Third Bank, First Citizens Bank, First Internet Bank, First Technology Federal Credit Union, FNBO Direct, Golden 1 Credit Union, Huntington National Bank, Investors Bank, Investors eAccess, KeyBank, Limelight Bank, Live Oak Bank, M&T Bank, Marcus by Goldman Sachs, Morgan Stanley Private Bank, MySavingsDirect, Navy Federal Credit Union, NBKC Bank, PenFed Credit Union, PNC Bank, Popular Direct, PurePoint Financial, Quontic Bank, Randolph-Brooks Federal Credit Union, Regions Bank, Salem Five Direct, Sallie Mae Bank, Santander Bank, SchoolsFirst Federal Credit Union, Security Service Federal Credit Union, State Employees’ Credit Union, Suncoast Credit Union, Synchrony Bank, TD Bank, TIAA Bank, U.S. Bank, UFB Direct, Union Bank (California), USAA Bank, Vio Bank, VyStar Credit Union, Wells Fargo and Zions Bank.