Best IRA CD Rates Of September 2024 (2024)

An IRA (individual retirement account) is a wise investment option for those looking to save for retirement. But did you know that you can invest your IRA contributions into certificates of deposit (CDs) just as you would stocks, bonds or mutual funds? The best IRA CD rates offer guaranteed returns, making them an attractive option for savers who want a low-risk and steady way to grow their savings.

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• CD Promotions
• Best IRA CD Rates 2024
• Summary: Best IRA CD Rates
• Methodology
• What Are Current IRA CD Rates?
• What Is An IRA CD?
• How Does an IRA CD Work?
• How To Find the Highest IRA CD Rates
• Pros and Cons of an IRA CD
• Who Is an IRA CD Best For?
• How To Rollover an IRA CD to an IRA
• What Is the Difference Between a CD and an IRA?
• Are IRA CDs a Good Investment?
• Bottom Line
• Banks We Monitor
• Frequently Asked Questions (FAQs)
• Next Up In CDs

If you’re looking for the best IRA CD rates in 2024, we’ve got you covered. Here are the top five providers of the best IRA CDs based on our methodology.

Annual percentage yields (APYs) and account details are accurate as of August 20, 2024.

To create our list of the best IRA CD rates, Forbes Advisor analyzed 341 CDs accounts across 134 financial institutions, including a mix of traditional brick-and-mortar banks, online banks and credit unions. We ranked each institution on 10 data points within the categories of APY, minimums, compounding frequency, customer experience, digital experience, available terms and overall availability.

The following weights were assigned to each category for the star rating:

• APY: 50%
• Customer and digital experience: 20%
• Minimum deposit: 12.5%
• Compound interest schedule: 7.5%
• Availability: 5%
• Available terms: 5%

To learn more about our rating and review methodology and editorial process, check out our guide on How Forbes Advisor Reviews Banks.

IRA CDs work by combining the features of an IRA with some of the benefits of a CD. The two main types are traditional IRA CDs and Roth IRA CDs. Each option provides different tax advantages.

• Traditional IRA CDs: Contributions may be tax-deductible and qualified withdrawals are taxed as ordinary income.
• Roth IRA CDs: Contributions are made with after-tax income and qualified withdrawals are tax-free.

When you open an IRA CD, you will deposit new funds to an IRA or roll funds over from another IRA. Traditional and Roth IRA CDs opened with new funds are subject to the same annual contribution limits as regular IRAs. For 2023, the maximum annual contribution you can make to a traditional or Roth IRA is $6,500. You can contribute an additional $1,000 if you’re 50 or older.

To find the highest IRA CD rates, start with online banks and credit unions. These institutions tend to offer the best rates and features. See the options in this list for some of the top-ranked IRA CDs from our analysis.

Consider how much you’d like to deposit and what term length you’re comfortable with to find the best interest rates you can qualify for. You should be able to easily meet minimum deposit requirements and feel confident you will not need the money until the term is up. Look for daily compounding schedules to earn the highest returns.

“A high interest rate can sometimes come with strings attached,” says Jeff Rose, a certified financial planner and former CEO and founder at Alliance Wealth Management, LLC. “Some institutions charge as much as six months’ worth of interest for early withdrawals on a five-year CD. So, always weigh the potential earnings against the flexibility and terms of the account.”

IRA CDs can help you reach your retirement savings goals, but they aren’t right for everyone. Here are some of the main pros and cons of an IRA CD to consider.

Pros

• Safe and guaranteed returns
• May offer better rates than savings accounts
• Tax advantages on contributions or withdrawals
• Can provide steady income in interest earnings

Cons

• Locks up your money
• May offer lower returns than riskier investments
• Contribution limits may apply

IRA CDs are a low-risk option for short-term retirement saving, but they’re not ideal for long-term investing. To learn more, check out The Pros And Cons Of IRA CDs.

An IRA CD may be best for people nearing retirement age. If you will reach your retirement goals in the next couple of years and want a safe place to earn interest until then, IRA CDs are a smart investment. You might decide to move some funds from another retirement or investing account into an IRA CD to guarantee you won’t lose money.

You might also consider an IRA CD if you want to invest more conservatively for retirement or have a lower risk tolerance. These accounts can help you diversify your portfolio. Even with the most competitive rates, IRA CDs are not likely to outperform the rest of your investments in the long run. However, they can offer secure earnings while more growth-oriented assets cannot.

After your IRA CD matures, you may choose to roll it into a regular IRA. This process may sound complicated, but it’s actually quite simple if you take it one step at a time.

1. Decide if you’ll open a traditional or Roth IRA.
2. Choose which financial institution you’ll open an account with and fill out any necessary paperwork.
3. Ask your current financial institution to transfer or “roll over” the funds from your existing CD into the new account.

CDs and IRAs serve very different purposes.

A certificate of deposit is a low-risk savings account offered by banks, credit unions and other financial institutions. CDs have pre-determined maturity dates with fixed interest rates that generally cannot change throughout your term. The advantage is that you know how long your money will be locked up and how much you’ll earn over time.

An individual retirement account is an investment account with unique tax advantages designed to help you save for retirement. Unlike a CD, which has a fixed return, your IRA can be invested in several different assets with different risks and rates of return, including stocks, bonds or mutual funds.

Ultimately, the choice between a CD or IRA depends on your situation and goals. If you need quick access to your money, a CD might be best for you. But if you’re looking to contribute regularly toward your future retirement, then an IRA may be a better bet.

An IRA CD can be a good investment if it fits your financial goals and risk tolerance. IRA CDs help you grow your retirement savings in a predictable way because they have guaranteed returns. But they typically offer lower interest rates compared to other retirement accounts and investment options like stocks or mutual funds.

If safety and capital preservation are important to you, putting part of your retirement savings in an IRA CD could be a wise choice. But if you’re willing to take on more risk in exchange for potentially higher returns, you may want to explore other investment options within your IRA.

For example, diversifying your retirement savings with stocks, bonds and mutual funds can help you potentially achieve better long-term growth. Consider talking to a financial advisor if you need help deciding whether an IRA CD is a good investment for you.

These financial institutions were included in our research for the best CD rates: ableBanking, Affinity Federal Credit Union, Ally Bank, American Express, Axos Bank, Apple Federal Credit Union, Bank of America, Bank5 Connect, BankDirect, BankPurely, BankUnitedDirect, Barclays, Bethpage Federal Credit Union, Bread Savings (formerly Comenity Direct), BrioDirect Banking, Capital One, Charles Schwab Bank, Chase, Chevron Federal Credit Union, CIT Bank, Citibank, Citizens Access, Colorado Federal Savings Bank, Comerica, CommunityWide Federal Credit Union, Connexus Credit Union, Consumers Credit Union, Credit Union of Denver, Discover, Dollar Savings Direct, EmigrantDirect, Financial Partners Credit Union, Financial Resources Federal Credit Union, First National Bank of America, Georgia’s Own Credit Union, Golden1 Credit Union, Greenwood Credit Union, HSBC Direct, Hughes Federal Credit Union, Ideal Credit Union, iGoBanking, Investors eAccess, Keybank, Kinecta Federal Credit Union, Limelight, Live Oak Bank, MAC Federal Credit Union, Marcus by Goldman Sachs, Michigan State University Federal Credit Union, My eBanc, MySavingsDirect, Navy Federal Credit Union, nbkc Bank, Northern Bank Direct, Northpointe Bank, Nuvision Federal Credit Union, Pacific National Bank, Pen Air Federal Credit Union, PenFed, PNC Bank, Popular Direct, Purepoint Financial, Quontic, Quorum Federal Credit Union, Radius Bank, Rising Bank, SalemFiveDirect, Sallie Mae Bank, Spectrum Federal Credit Union, State Bank of Texas, State Department Federal Credit Union, Superior Choice Credit Union, Synchrony Bank, TAB Bank, TD Bank, EverBank, TotalDirect Bank, U.S. Bank, USAA, USAlliance Federal Credit Union, Vio Bank, Virtual Bank, Wells Fargo and Truist.

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