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Best of

The Best IRA Savings Accounts

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

Saving enough for retirement remains a daunting goal for many Americans. A 2018 survey by financial services company Northwestern Mutual found 41% of respondents worried about their retirement savings. Individual retirement accounts (IRAs) can help keep your blood pressure down by providing you with a powerful savings tool for retirement with significant tax advantages.

While you may associate IRAs with investing in stocks and bonds, one of the safest places to open an IRA is with a bank or credit union in the form of a savings or money market account. The list of IRA savings accounts below are the best for earning a high interest rate on your savings while keeping your future nest egg secure.

Top 10 IRA savings accounts of May 2019

Account

Minimum balance to earn APY

APY

Ally Bank IRA Online Savings Account (Traditional, Roth, SEP)

$0

2.20%

Self-Help Federal Credit Union IRA Account (Traditional, Roth)

$100

2.12%

Alliant Credit Union IRA Savings (Traditional, Roth, SEP)

$100

2.00%

Latino Community Credit Union IRA Share Account (Traditional, Roth, SEP)

$25

2.02%

First Internet Bank Money Market IRA (Traditional, Roth)

$100

2.02%

Bethpage Federal Credit Union IRA Money Market (Traditional, Roth)

$1

2.00%

Spectrum Credit Union MarketEdge IRA (Traditional and Roth)

$2,500

1.85%

Digital Federal Credit Union Money Market IRA Account (Traditional, Roth, CESA, SEP, SIMPLE)

$25,000

1.66%

Northpointe Bank IRA Ultimate Money Market

$25,000

1.50%

Wings Financial Credit Union High Yield IRA (Traditional, Roth, CESA)

$10,000

1.26%

Ally Bank IRA Online Savings Account— APY 2.20%, minimum deposit $0

Ally may be an online-only bank, but its history stretches back to the beginning of the 20th century as a financial institution that helped automaker General Motors finance sales. In its current iteration, Ally offers a wide range of competitive savings products, including an IRA account that earns an APY of 2.20%. Ally offers three different types of plans: Traditional, Roth and SEP, covering a variety of retirement needs while offering a high rate of return.

Learn more Secured

on Ally Bank’s secure website

Member FDIC

Self-Help Federal Credit Union IRA Account— APY 2.12%, minimum deposit $100

A credit union with more than 27 branches and $1 billion in assets, Self-Help’s physical locations are scattered throughout California, Wisconsin, North Carolina and Florida. However, anyone in the country can sign up to bank with them online by joining the Center for Community Self-Help, which involves paying a one-time $5 fee.

The IRA account offered by Self-Help comes with an option to choose either a Traditional or Roth plan. You’ll need to maintain a balance of at least $100 to earn the APY, but considering this is for your retirement, that shouldn’t be too tough.

Learn more Secured

on Self-Help Federal Credit Union’s secure website

NCUA Insured

Alliant Credit Union IRA Savings— APY 2.00%, minimum deposit $100

Although based in Illinois, it’s a simple matter for anyone in the country to join this credit union. A $10 donation to Foster Care to Success qualifies you for membership and the ability to take advantage of Alliant’s personal banking products, including their IRA Savings account.

Alliant offers three different plans for its IRA savings: Traditional, Roth and SEP. The APY is 2.00% no matter what plan you choose so long as you maintain the account’s minimum balance of $100.

Learn more Secured

on Alliant Credit Union’s secure website

NCUA Insured

Latino Community Credit Union IRA Share Account— APY 2.02%, minimum deposit $25

This North Carolina credit union offers its banking products to anyone in the nation so long as they make a one-time $10 donation to the Latino Community Development Center, a nonprofit promoting financial literacy and general economic development “for low-income Latino and other immigrant communities in North Carolina,” according to its mission statement.

The credit union offers an IRA share account — their version of a savings account — with either a Traditional, Roth or SEP plan. The account requires a minimum deposit of $25 and currently earns an APY of 2.02%.

Learn more Secured

on Latino Credit Union’s secure website

NCUA Insured

First Internet Bank Money Market IRA— APY 2.02%, minimum deposit $100

It may not literally be the first internet bank ever, but this Indiana-based financial institution does offer a great IRA product with a wide variety of plans. Customers can choose from the standard Traditional and Roth options, as well as SEP and CESA plans.

You need to deposit a minimum of $100 to open the account and — more importantly — maintain an average daily balance of at least $4,000 to avoid paying a monthly $5 fee. However, there’s no minimum balance needed to earn the 2.02% APY on the funds placed in the IRA account.

Learn more Secured

on First Internet Bank’s secure website

Member FDIC

Bethpage Federal Credit Union IRA Money Market Account— APY2.00%, minimum deposit $1

A staple of the Northeast’s credit union industry, Bethpage opens its arms to anyone in the country who wants to become a member. All it requires is for you to open a $5 savings account with Bethpage and you’re in the club, meaning you’re also able to open an IRA money market account should you choose.

Bethpage FCU offers Traditional and Roth IRA plans with the account, which requires a minimum deposit of $1 to earn the full 2.00% APY. There’s no monthly fee associated with the account.

Learn more Secured

on Bethpage Federal Credit Union’s secure website

NCUA Insured

Spectrum Credit Union MarketEdge IRA— APY 1.85%, minimum deposit $2,500

Based in California, this credit union accepts members throughout the country so long as they make a $15 donation to join the Contra Costa County Historical Society. You can also sign up to pay a $25 annual fee to the Navy League of the United States.

The IRA offered by Spectrum earns a minimal APY of 0.50% if you have a balance up to $2,500, but for balances $2,500 and up, you can expect to earn a nice rate of 1.85%. Spectrum currently offers Traditional and Roth IRA plans.

Learn more Secured

on Spectrum Credit Union’s secure website

NCUA Insured

Digital Federal Credit Union Money Market IRA— APY 1.66%, minimum deposit $25,000

The name of this credit union may sound like it was frantically created by a guy in the marketing department running ten minutes late to a pitch meeting, but what it lacks in pizazz it makes up for with great rates. Before you can open a money market IRA account with this credit union, you have to become a member, a matter of making a $10 donation to Reach Out for Schools.

This money market IRA account offers Traditional and Roth plans, as well as CESA, SEP and SIMPLE. It requires a minimum balance of $1,000 to begin earning interest, and the APY works on a tiered system. The sweet spot for most savers will be the 1.66% earned on balances between $25,000 and $99,999.99. Accounts with balances $100,000 and over enjoy a 1.77% APY while those falling short of $25,000 make do with 1.56%.

Learn more Secured

on Digital Federal Credit Union (DCU)’s secure website

NCUA Insured

Northpointe Bank IRA Ultimate Money Market— APY 1.50%, minimum deposit $25,000

This bank, headquartered in Michigan, provides an IRA money market best reserved for big savers. The bank’s Ultimate Money Market earns APY on a tiered system, and balances up to $24,999.99 only earn 0.25% APY. However, if you can break the $25,000 threshold, you’ll earn an APY of 1.50% on balances all the way up to $1,000,000 (after which your money earns 0.50%).

Learn more Secured

on Northpointe Bank’s secure website

Member FDIC

Wings Financial Credit Union High Yield IRA— APY 1.26%, Minimum deposit $10,000

Maybe you’ll be amazed by the competitive rates offered by this credit union with a focus on workers in the airline industry, but once you make a $5 donation to the Wings Financial Foundation, you’ll find plenty of opportunities to test the reality of the products offered to you.

The high-yield IRA savings account offered by Wings Financial Credit Union includes Traditional, Roth and CESA plans and earns an APY of 1.26% on balances from $10,000 up to $49,999.99. Balances less than $10,000 earn 0.10% while those $50,000+ earn 1.36%.

Learn more Secured

on Wings Financial Credit Union’s secure website

NCUA Insured

What’s the benefit of an IRA savings account?

Like any IRA account, an IRA savings account provides tax advantages to the saver. The exact benefits depend on the type of IRA plan or type you choose. While the two most common types of IRA offered are Traditional and Roth, more specialized versions of the account are also available, including:

  • Simplified Employee Pension (SEP): A type of IRA that can be used by either small business owners on behalf of their employees, or by self-employed individuals, the SEP IRA functions similar to a Traditional IRA — except it has a much higher annual contribution limit. You can contribute 25% of your annual compensation to the plan or $56,000 (whichever is the lesser), and like a Traditional IRA, those contributions are tax-deductible.
  • Savings Incentive Match Plan for Employees (SIMPLE): Another IRA tailored for small-business owners or those who are self-employed, SIMPLE plans allow you to put up to $13,000 of your business net earnings into the account, where the money remains tax-deferred until your start taking your withdrawals.
  • Coverdell Education Savings Account (CESA): This account aids with saving for education costs for those 18 years old or younger, but functions similar to a Roth IRA with more limits. For example, the beneficiary must be 18 years or younger when the account is set up (or be a special needs beneficiary), and you can make a maximum contribution of $2,000 per year. Only those with modified adjusted gross incomes of up to $110,000 ($220,000 if filing a joint return) may make a contribution to the account, and the contributions are not tax-deductible. The beneficiary can use the funds from the CESA for qualifying expenses toward their education.

How does an IRA savings account work?

You can contribute money to your IRA savings account any time you like, just as you would with an ordinary savings account. However, because this is an IRA product, it’s still subject a 2019 contribution amount limit of $6,000 (or $7,000 if you’re aged 50 or older), the same as an IRA account at a brokerage firm.

In that same vein, the penalties for withdrawing money early from your IRA remain in effect for the IRA savings account. Taking money from your Traditional IRA savings account incurs a 10% penalty if you’re younger than 59 1/2 years old (and assuming you don’t qualify for one of the special circumstances allowing a penalty-free withdrawal, such as a first-time home purchase).

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

James Ellis
James Ellis |

James Ellis is a writer at MagnifyMoney. You can email James here

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Best of

The Best 6-Year CD Rates

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

If you want to earn the highest CD rates, you generally need to invest in a longer-term CD. When the bank or credit union gets to keep your money for an extended period of time, it rewards you with higher interest rates.

Higher rates can make a 6-year term an appealing choice when considering CDs. However, there aren’t as many 6-year CDs available as with other CD terms. Most banks don’t offer this particular term, often maxing out at five years or skipping to 7-year CDs. In our analysis, we managed to find nine great choices when sorting through long-term CD data from DepositAccounts.com, a LendingTree-owned company.

To find the best 6-year CDs, we first looked at the highest 6-year CD rates available nationwide. Then we ranked each by APY, taking the accounts’ minimum deposit requirements into consideration for wider availability. We also made sure to include institutions with great health ratings so you know you’re working with a reputable bank with FDIC or NCUA insurance.

The Best 6-year CD rates

Institution

APY

Minimum deposit amount

INOVA FCU

3.25%

$200

Chartway FCU

3.10%

$500

Goldman Sachs Bank USA

3.05%

$500

Third Federal Savings and Loan

2.90%

$500

Evansville Teachers FCU

2.90%

$1,000

New Buffalo Savings Bank

1.76%

$1,000

MySavingsDirect

1.65%

$1,000

1st Source Bank

1.50%

$500

EmigrantDirect

1.50%

$1,000

INOVA FCU— 3.25% APY, $200 minimum deposit

Earn the best 6-year CD rate from Inova FCU. You need at least $200 to deposit and open up INOVA’s 6-year certificate. The penalty for an early withdrawal from this account is equal to 180 days’ of dividends.

Headquartered in Indiana, INOVA Federal was originally founded to serve the employees of Miles Laboratories in 1942. You can join INOVA through your employer or other organization, or through an immediate family member who is already an INOVA member.

Learn more Secured

on INOVA Federal Credit Union’s secure website

NCUA Insured

Chartway FCU— 3.10% APY, $500 minimum deposit

You can take advantage of Chartway FCU’s longest share certificate term of 71 months starting with $500. It earns at a competitive rate, which applies to certificates between 60 and 71 months. The penalty for making an early withdrawal from a 71-month certificate will equal 180 days’ worth of interest.

Chartway FCU started as NorVA N.A.S. Federal Credit Union by civilian workers at the Norfolk Naval Air Station in 1959. Today, you can join Chartway if you live, work, go to school or worship in select areas in Texas, Utah or Virgina, you work for a select partner employer or you have an immediate family member who is a member. You may also join by donating $10 to the We Promise Foundation, Chartway’s philanthropic arm.

Learn more Secured

on Chartway Federal Credit Union’s secure website

NCUA Insured

Goldman Sachs Bank USA— 3.05% APY, $500 minimum deposit

A big name in the online banking space, Goldman Sachs Bank USA, also known as Marcus by Goldman Sachs, offers consistently competitive rates. This includes its high-yield 6-year CD, the longest term among its offerings. It requires an initial deposit of at least $500 within 10 days after opening the account. Marcus by Goldman Sachs makes a 10-day CD rate guarantee, so if the rate increases during that period, you can snag that higher rate.

Just be careful of making an early withdrawal from the 6-year CD as it will trigger a penalty of 365 days’ worth of simple interest on the principal.

An entirely online bank, Marcus by Goldman Sachs is a brand of Goldman Sachs Bank USA, the banking branch of investment giant Goldman Sachs, which traces its history back to 1869.

Learn more Secured

on Goldman Sachs Bank USA’s secure website

Member FDIC

Third Federal Savings and Loan— 2.90% APY, $500 minimum deposit

The 72-month standard CD is the longest term offered by Third Federal Savings and Loan. It earns at a competitive rate and requires only $500 to open and start saving. The penalty for an early withdrawal from a 72-month CD equals 18 months’ interest.

Third Federal is based in Cleveland, where it was founded back in 1938.

Learn more Secured

on Third Federal Savings And Loan (OH)’s secure website

Member FDIC

Evansville Teachers FCU— 2.90% APY, $1,000 minimum deposit

The 6-year certificate is Evansville Teachers FCU’s longest term and earns at a competitive interest rate alongside the credit union’s other certificates. You’ll need at least $1,000 to open an account. The penalty for an early withdrawal will equal either $100 or 180 days’ worth of interest, whichever is greater.

ETFCU was founded in 1936 by several teachers in Evansville, Ind. who needed better financial services. Today, you can be eligible for Evansville Teachers FCU membership not just as a teacher, but also through select employers or organizations, or a family or household member. You may also join by donating $5 to the Mater Dei Friends & Alumni Association.

Learn more Secured

on Evansville Teachers Federal Credit Union’s secure website

NCUA Insured

New Buffalo Savings Bank— 1.76% APY, $1,000 minimum deposit

With at least $1,000, you can start saving your money in a 6-year CD from New Buffalo Savings Bank at a pretty solid rate. Interestingly, no matter which term you have, the early withdrawal penalty will equal six months’ of interest.

New Buffalo Savings Bank was founded in 1921, and maintains its headquarters and a few branches in the New Buffalo, Mich. area.

Learn more Secured

on New Buffalo Savings Bank’s secure website

Member FDIC

MySavingsDirect— 1.65% APY, $1,000 minimum deposit

MySavingsDirect offers a wide range of MyTerm Certificates of Deposit. Its 6-year term falls in between its range of 60 to 120 month terms available at the given APY. Plus, interest is compounded daily for faster savings growth. You’ll need at least $1,000 to open an account. Making an early withdrawal from this account will trigger a penalty of 180 days’ worth of interest.

MySavingsDirect is a digital-only division of Emigrant Bank which dates back to 1850.

Learn more Secured

on MySavingsDirect’s secure website

Member FDIC

EmigrantDirect—1.50% APY, $1,000 minimum deposit

EmigrantDirect offers a lower but still decent rate on its 60- to 120-month certificates of deposit, including its 6-year term. You need $1,000 to open an account here. The penalty for early withdrawals will be an amount equal to 180 days’ interest.

Like MySavingsDirect, EmigrantDirect is another digital-only division of Emigrant Bank.

Learn more Secured

on EmigrantDirect.com’s secure website

Member FDIC

1st Source Bank— 1.50% APY, $500 minimum deposit

You can get started with 1st Source Bank’s 6-year CD with just $500. The penalty for an early withdrawal is 12 months’ interest earned on the amount withdrawn.

1st Source Bank was established back in 1863 in South Bend, Ind. It has branches in Florida, Indiana and Michigan.

Learn more Secured

on 1st Source Bank’s secure website

Member FDIC

Is it worth getting a 6-year CD?

It can be worth getting a 6-year CD if you’re signing up for the highest rates on our list. Perhaps it would make a solid addition to a CD ladder you’re building. Let’s say you have $1,000 to deposit into a CD. Depositing that into the highest-earning 6-year CD above, at 3.25% APY, will result in $215 total interest earned. Making that same deposit into the best 5-year CD at 3.35% APY yields about $182.

But this is just looking at the top rates for both terms. In truth, 6-year CD rates aren’t always competitive enough to make them a reliable investment. In fact, 5- and 7-year CD terms consistently have much better rates, despite the small one-year difference.

When we compare 6-year CD rates with 5-year CD rates, the 6-year yields struggle to keep up. You can see above that the best 6-year CD rates jump from 3.25% APY at the top all the way to just above 1%. Meanwhile, all the best 5-year CD rates offer a much better savings opportunity ranging between 3.35% and 3.20% APY. No matter which 5-year CD you pick from the list, you’re bound to yield some solid earnings.

We tend to expect that the longer the CD term, the higher the rate will be, but we just don’t see that when comparing 6-year CDs with other long-term CDs. On the whole, 6-year CD terms are bookended by better-earning products. Opening 5- and 7-year CDs will give you a wider product selection to choose from and a better chance at growing your savings.

Alternative long-term investments

Other than 5- and 7-year CDs, Ken Tumin, founder of DepositAccounts.com (which similar to MagnifyMoney, is owned by LendingTree) suggests turning to individual bonds to beef up your savings. “Much like a CD ladder, the same technique can be used with individual bonds (Treasury, municipal, corporate, etc.) to build steady savings over time,” he offered. Note that non-Treasury bonds do have some default risk that CDs don’t carry when they have FDIC/NCUA insurance.

Another alternative to a bond ladder is a mutual fund or an ETF of bonds. Unlike a ladder, the value of a bond mutual fund or ETF fluctuates with interest rates. This can give you the chance to boost your savings when interest rates go down. However, the opposite is also true, where the value of your bonds decrease when interest rates rise.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Lauren Perez
Lauren Perez |

Lauren Perez is a writer at MagnifyMoney. You can email Lauren here

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