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Updated on Thursday, October 1, 2020
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 best IRA CD rates using data from another LendingTree company DepositAccounts.com, a database of offerings at more than 17,100 banks and credit unions. 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 best IRA rates in September 2020
|Term||Institution||APY||Minimum Deposit Amount|
|3 months||BethPage FCU||0.50%||$50.00|
|6 months||Communitywide FCU||1.00%||$1,000|
|12 months||State Department FCU||1.05%||$500|
|18 months||Georgia's Own Credit Union||1.19%||$500|
|2 years||Pen Air FCU||1.05%||$500|
|3 years||Pen Air FCU||1.15%||$500|
|4 years||Pen Air FCU||1.25%||$500|
|5 years||Service Credit Union||1.50%||$500|
|6 years||Evansville Teachers FCU||1.35%||$1,000|
Best 3-month IRA CD – BethPage Federal Credit Union (Traditional, Roth)
The BethPage Federal Credit Union features the most competitive 3-month IRA CD that’s currently available, with an APY of 0.50% and a minimum deposit of just $50.
Best 6-month IRA CD – Communitywide Federal Credit Union (Traditional, Roth)
CommunityWide Federal Credit Union is offering the highest rate available on 6-month IRA CDs at 1.00% APY for deposits of $1,000 and over. It has other IRA CD products, too, with term lengths ranging from 6 to 60 months.
Best 1-year IRA CD — State Department Federal Credit Union (Traditional, Roth)
This one-year term share certificate earns an APY of 1.05% and requires a minimum deposit of $500.
Best 18-month IRA CD – Georgia’s Own Credit Union (Traditional, Roth)
Georgia’s Own Credit Union is currently featuring a very attractive APY of 1.19% on its 18-month IRA CD. There is a minimum deposit of $500 required to earn this APY. Interest on this product is compounded monthly.
Best 2-year IRA CD, 3-year IRA CD and 4-year IRA CD– Pen Air Federal Credit Union (Traditional, Roth, SEP, CESA)
Pen Air Federal Credit Union is currently offering a competitive rate on its 2-year IRA CD, with a 1.05% APY, its 3-year IRA CD, with a 1.15% APY and its 4-year IRA CD, with a 1.25% APY. There is a minimum deposit of $500 required for this account, according to DepositAccounts.
Best 5-year IRA CD – Service Credit Union
Service Credit Union is currently offering the most attractive option for an 5-year IRA CD, boasting an APY of 1.50%. Dividends are compounded and credited monthly.
Best 6-year IRA CD — Evansville Teachers FCU (Traditional, Roth, CESSA)
To join this credit union, you may make a $5 donation to the Mater Dei Friends & Alumni Association. You may want to strongly consider doing so, as the 6-year IRA CD rate offered by Evansville FCU is the best on the market in terms of APY. Plus, it only requires a minimum balance of $1,000.
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 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.