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Updated on Monday, March 1, 2021
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 February 2021
|Term||Institution||APY||Minimum Deposit Amount|
|3 months||Service Credit Union||0.40%||$500.00|
|6 months||Communitywide FCU||0.70%||$1,000|
|12 months||Lafayette FCU||0.80%||$500|
|18 months||Evansville Teachers FCU||0.75%||$1,000|
|2 years||Evansville Teachers FCU||0.90%||$1,000|
|3 years||Evansville Teachers FCU||1.00%||$1,000|
|4 years||Evansville Teachers FCU||1.04%||$1,000|
|5 years||Affinity Plus FCU||1.25%||$500|
|6 years||Evansville Teachers FCU||1.20%||$1,000|
Best 3-month IRA CD – Service Credit Union
Service Credit Union offers an array of IRA CDs, including a 3-month CD with a competitive APY of 0.40%. This CD requires a $500 minimum deposit, and dividends are compounded and credited monthly.
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 0.70% 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 – Lafayette FCU (Traditional, Roth, CESA)
Lafayette Federal Credit Union offers an array of IRA CDs, ranging in term length from seven months to five years. Currently, its 1-year IRA CD features a standout rate of 0.80%. There is a minimum deposit of $500 required to open this product and to earn the APY.
Best 5-year IRA CD – Affinity Plus Federal Credit Union (Traditional)
Affinity Plus Federal Credit Union currently offers a competitive rate of 1.25% APY on its Basic Certificate, a 5-year IRA CD. The credit union features an array of CDs ranging in term length from three to 60 months, available for a low minimum deposit of $500.
Membership to Affinity Plus Federal Credit Union is open to anyone who makes a one-time dues payment of $25 to the Affinity Plus Foundation.
Best 18-month IRA CD, 2-year IRA CD, 3-year IRA CD, 4 year IRA CD and 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 18-month, 2-year, 3-year, 4-year, and 6-year IRA CD rates offered by Evansville FCU are 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.