Perhaps you’ve decided to build a CD ladder within your IRA, or maybe you’re looking for a safe way to store your retirement cash for a specific period of time. Whatever the reason, you’re interested in getting an IRA CD and, understandably, want to know what products will give you the best rate of return.
You can get an IRA CD with terms ranging from three months to more than six years, with interest rates generally increasing with the term length. There are lots of options, so we’ve rounded up the top IRA CD rates that are available right now for a variety of terms. You’ll select your IRA CD terms based on your CD-ladder master plan or whenever you’ll need access to your money.
Every month, we choose the top IRA CD rates using data from another LendingTree company DepositAccounts.com, a database of offerings at more than 17,100 banks and credit unions. On Oct. 2, 2017, we sorted the products by APY, then eliminated institutions with a health rating below a B. We then eliminated products that are not available nationwide. From there, we chose the IRA CD with the highest APY among products with a minimum deposit no greater than $5,000. Here are the best options.
The top IRA rates in October 2017
3 Month IRA CD – EverBank, 3 Month Yield Pledge IRA
Three-month IRA CDs typically offer the lowest interest rates of any IRA CD term. EverBank offers the best rate of 1.01% APY and a minimum deposit of $5,000. That rate is well above the national average.
6-Month IRA CD – Nationwide Bank, 6-month IRA
Six-month IRA CDs typically earn a little bit better, but they’re still not great. Nationwide Bank offers the highest interest rate at 1.20% APY for deposits less than $100,000. That translates into an earning of $5.98 on a $1,000 deposit. Compare that to the average of all regular 6 month CDs, at 0.384%.
1-Year IRA CD Rates – First Internet Bank of Indiana, 12 Month IRA
Regular one-year CDs earn an average interest rate of 0.61% APY. First Internet Bank of Indiana, however, is offering a one-year IRA CD at 1.62% APY. You’ll need a $1,000 minimum deposit to earn an additional $16.20 once the CD matures.
18-Month IRA CD Rates – First Internet Bank of Indiana, 18 Month IRA
Regular 18-month CDs earn an average interest rate of 0.74% APY. The top pick in this category is again the First Internet Bank of Indiana, which offers an interest rate of 1.70% APY on a $1,000 minimum deposit. With those terms, you would earn $25.61 by the time the CD matured.
2-Year IRA CD Rates – Garden Savings Federal Credit Union, 2 Year IRA Share Certificate
Two-year regular CDs earn an average interest rate of 0.86% APY. Garden Savings Federal Credit Union, on the other hand, is currently offering 2.02% APY on their 2-year IRA CDs. This would translate into an earning of $20.40 with a minimum $500 deposit.
3-Year IRA CD Rates – GTE Financial, 36-Month IRA Certificate – Member Advantage
Three-year regular CDs are earning an average interest rate of 1.08% APY currently. GTE Financial is nearly doubling that, with an interest rate of 2.02% APY with their Member Advantage 36-month IRA Certificate. With those interest rates and a $500 minimum deposit, you would earn $30.92 when the certificate matures. Anyone can qualify for this credit union membership with a one-time $10 membership fee to GTE Financial’s nonprofit educational financial club, CUSavers.
4-Year IRA CD Rates – GTE Financial, 48-Month IRA Certificate – Member Advantage
Four-year regular CDs are currently earning an average interest rate of 1.29% APY. GTE Financial again claims the top interest rate for these IRA CDs, with an interest rate of 2.27% APY. You would earn $46.97 on this CD with a $500 minimum deposit.
5-Year IRA CD Rates – Mountain America Credit Union, 5 Year IRA
Five-year IRA CDs hold the top spot for interest rates out of any category on our list. National averages for a regular 5-year CD is 1.55% APY, however Mountain America Credit Union outperforms the average with a 2.60% APY on its 5-year IRA CD for members. The minimum deposit is $500
6+ Year IRA CD Rates – Air Force Federal Credit Union, 7 Year IRA
Interestingly, these very-long-term IRA CDs don’t offer higher interest rates than the shorter-term five-year IRA CDs. Air Force Federal Credit Union offers the highest term for their seven-year IRA CD, at 2.50% APY. That’s still a lot less than Mountain America Credit Union which offered a 2.60% APY for a five-year IRA CD. Still, with Air Force Federal Credit Union’s seven-year IRA CD, you would earn $471.71 on a minimum deposit of $2,500 when the IRA CD matures.
3 questions to consider before opening an IRA CD
Opening an IRA CD generally requires filling out a form or talking to a banker. You’ll have to have a way to fund your IRA CD, whether that’s rolling over an existing retirement account into an IRA CD or depositing cash into the product. The same limits that apply to IRA contributions apply to IRA CDs: $5,500 per year ($6,500 if you’re over age 50) of your own money across all your IRA accounts each year, and you can do a rollover once per year.
Unless you’ve invested in a bump-up IRA CD, you won’t be able to take advantage of a higher rate until your CD matures. Withdrawing funds from an IRA CD before they mature will result in a stiff penalty. Bump-up IRA CDs give you a chance to increase your interest rate to a higher level if it’s available, but you’re generally only allowed to do this once or twice during the life of the CD.
You can either use the the direct-transfer method or the indirect-transfer method. The direct transfer method requires setting up your new IRA account filling out a form authorizing the bank or credit union to transfer money from the old account into the new account. The indirect transfer method involves you asking for a check from your old IRA account. You have up to 60 days to deposit that check into your IRA CD to avoid incurring a penalty.