Bankrate follows a strict editorial policy, so you can trust that we’re putting your interests first. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions.
Key Principles
We value your trust. Our mission is to provide readers with accurate and unbiased information, and we have editorial standards in place to ensure that happens. Our editors and reporters thoroughly fact-check editorial content to ensure the information you’re reading is accurate. We maintain a firewall between our advertisers and our editorial team. Our editorial team does not receive direct compensation from our advertisers.
Editorial Independence
Bankrate’s editorial team writes on behalf of YOU – the reader. Our goal is to give you the best advice to help you make smart personal finance decisions. We follow strict guidelines to ensure that our editorial content is not influenced by advertisers. Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy. So, whether you’re reading an article or a review, you can trust that you’re getting credible and dependable information.
You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey.
Bankrate follows a strict editorial policy, so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers.
We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money.
Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service.
Dear Dr. Don,
I’ve had an IRA CD for the last 10 years. I’m now 63 and would like to convert it over to a regular CD so I can start taking the interest each month to supplement my income.
Will I be taxed on the interest I got the last year I had it, or on the whole amount of the CD? Do I have to pay taxes on the interest I received in last 10 years or just in the last year before I converted it over?
— Joan Juggle
Dear Joan,
You’re going about this the wrong way. If the IRA CD was funded with pretax dollars — and most are — then every penny of it is subject to income taxes, including the principal and interest.
Fortunately, you will only owe taxes each time you take a distribution out of the account. However, converting the IRA CD to a regular CD would make the entire deposit subject to taxes immediately.
There are some easy ways for you to achieve your goal of taking distributions without moving the money out of an IRA account. The easiest is to ask your bank how you can take distributions from the account without closing the account. They may allow those distributions without requiring you to make any changes in the account.
The account is portable. You can move your funds to another IRA account and take distributions from that account. A money market mutual fund, for example, could give you interest income plus check-writing privileges on the balances.
To ask a question of Dr. Don, go to the “Ask the Experts” page, and select one of these topics: “Financing a home,” “Saving & investing” or “money.”
Share