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You can get an individual retirement account (IRA) certificate of deposit (CD) with terms ranging from one month 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.
Every month, we choose the best IRA CD rates using data from DepositAccounts.com, a database of offerings at thousands of banks and credit unions. We sorted the products by annual percentage yield (APY). 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.
| CD term | Financial institution | APY | Minimum opening deposit to earn APY |
|---|---|---|---|
| 28-day | MutualOne Bank | 0.45% | $5,000 |
| 3-month | Synchrony | 1.00% | None |
| 6-month | EFCU Financial | 2.35% | $500 |
| 1-year | EFCU Financial | 3.10% | $500 |
| 2-year | ConnectOne Bank (23 months) | 3.30% | $500 |
| 3-year | EFCU Financial | 3.60% | $500 |
| 4-year | EFCU Financial | 3.85% | $500 |
| 5-year | EFCU Financial | 4.10% | $500 |
MutualOne offers a 28-day CD with a 0.45% APY paid at maturity, with a required minimum daily balance of $5,000. The bank offers additional CDs of different maturities as well, up to 61 months, with APYs ranging from 0.40% to 0.55%.
Headquartered in Massachusetts, MutualOne Bank has branches only in the Northeast – but serves clients nationwide online. It was formed in 2012 when Framingham Cooperative Bank merged with Natick Federal Savings Bank.
Synchrony offers both traditional and Roth IRA CDs with no minimum balance required. You can withdraw interest from the CD before maturity without paying a penalty, but it’s still subject to IRA tax rules. You’ll need to call to open an IRA account with them.Synchrony is an online-only bank, with no brick-and-mortar branches, but is part of a financial-services institution that’s been around for 80 years.
EFCU Financial Credit Union is offering the highest APY on a variety of IRA CD terms, each requiring a $500 minimum balance.
There are a number of ways to become a member of EFCU Financial, including living or working in one of nine Louisiana parishes or donating to the EFCU Financial Foundation or the Louisiana Wildlife Federation.
Bank online with ConnectOne Bank or in-person at their only physical locations in New Jersey and New York. Their IRA Time Deposits that are just shy of two years offer 3.30% APY with a $500 minimum balance.
Interest is compounded daily and credited weekly on this account. If you don’t close your account when it matures, it will automatically renew for the same term at the latest rate.
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: $6,000 per year ($7,000 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 it matures 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 direct-transfer method or the indirect-transfer method. The direct transfer method requires setting up your new IRA account by 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.
Lindsay VanSomerenLindsay VanSomeren is a personal finance writer living in Tacoma, WA with a houseful of pets and a husband. She enjoys reading, hiking, homebrewing and blogging about her personal money journey at www.notoriousDEBT.com
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