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 Feb. 5, 2018, 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. (Average CD rates referenced below are based on DepositAccounts.com data as of Feb. 5, 2018.)
The top IRA rates in February 2018
3 Month IRA CD – Bethpage Federal Credit Union, 3 Month IRA (Traditional, Roth)
Three-month IRA CDs typically offer the lowest interest rates of any IRA CD term. Bethpage offers the best rate of 1.25% APY and a minimum deposit of $50. That rate is well above the national average.
6-Month IRA CD - Ally Bank, IRA High Yield 6-Month CD
Six-month IRA CDs typically earn a little bit better, but they’re still not great. Ally Bank offers the highest interest rate at 1.60% APY for deposits between $5,000 and $25,000. That translates into an earning of $39.84 on a $5,000 deposit. If you deposit less than $5,000, you can still earn a decent APY of 1.50%. If you deposit $25,000 or more, you'll earn a 1.75% APY. Compare that to the average of all regular 6 month CDs, at 0.44%.
1-Year IRA CD Rates – First Internet Bank of IN, 12 Month IRA (Traditional, Roth)
Regular one-year CDs earn an average interest rate of 0.70% APY. First Internet Bank of IN, however, is offering a one-year IRA CD at 2.07% APY. You’ll need a $1,000 minimum deposit to earn $20.20 in interest once the CD matures.
18-Month IRA CD Rates – First Internet Bank of IN, 18 Month IRA (Traditional, Roth)
18-month regular CDs earn an average interest rate of 0.86% APY. First Internet Bank of IN, on the other hand, is currently offering 2.12% APY on a 18-month IRA CD. This would translate into an earning of $31.21 with a minimum $1,000 deposit.
2-Year IRA CD Rates – MutualOne Bank, 24 Month IRA Certificate (Traditional, Roth)
Two-year regular CDs earn an average interest rate of 0.96% APY. MutualOne Bank, on the other hand, is currently offering 2.32% APY on a 2-year IRA CD. This would translate into an earning of $23.47 with a minimum $500 deposit.
3-Year IRA CD Rates – EverBank, 3-Year Yield Pledge IRA (Traditional, Roth)
Three-year regular CDs are earning an average interest rate of 1.13% APY currently. EverBank is nearly doubling that, with an interest rate of 2.30% APY with their 3-Year Yield Pledge IRA CD. With those interest rates and a $5,000 minimum deposit, you would earn $357 when the certificate matures.
4-Year IRA CD Rates – First Internet Bank of IN, 48 Month IRA (Traditional, Roth)
Four-year regular CDs are currently earning an average interest rate of 1.36% APY. First Internet Bank of IN again claims the top interest rate for these IRA CDs, with an interest rate of 2.48% APY. You would earn $98.65 on this CD with a $1,000 minimum deposit.
5-Year IRA CD Rates – Connexus Credit Union – 60 Month IRA (Traditional, Roth)
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 1.63% APY, however Connexus Credit Union outperforms the average with a 3.00% APY on its 5-year IRA CD for members. The minimum deposit is $5,000 to earn this APY.
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 Connexus Credit Union which offered a 3.00% 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.
Goldman Sachs Bank USA High-yield 12 Month CD
Synchrony Bank 12 Month CD
Synchrony Bank High Yield Savings
Barclays Online Savings Account
* All banks listed are a Member FDIC.