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Best IRA CD Rates for September 2022

CNET's pick for Best IRA CDs -- a safe investment choice for any retirement portfolio.

A certificate of deposit, or CD, is a specific savings product that offers a fixed annual percentage yield (APY) in exchange for restricting access to deposited funds until a future date, or maturity date. The average APY for a 1-year CD is 0.65%, according to Bankrate, a CNET sister site. However, the average IRA CD rate nationwide is 0.33%. You can earn well above that rate if you shop around. 

Traditional CDs restrict access to money in the account before the maturity date by imposing early withdrawal penalties. These penalties can vary based on a CD's term -- the length of time before it matures -- and range anywhere from 30 to 365 days of interest earned.

IRAs, or individual retirement accounts, provide tax benefits and allow you to save contributions intended for use after age 59½. IRAs are holding accounts that usually contain stocks, bonds or mutual funds as investment assets. Combining a CD's longer-term savings requirement with the stability of a fixed-rate APY creates a stable investment option. The benefit of using an IRA CD is fixed-rate growth that can be insured against loss up to $250,000 by the Federal Deposit Insurance Corporation (FDIC) or National Credit Union Administration (NCUA).

Review the following list of the best IRA CD rates while comparing rates.

CNET's picks for the top IRA CD rates

Bank Minimum Deposit 1-year 3-year 5-year
EFCU Financial $500 2.60% 3.10% 3.60%
Synchrony $0 2.75% 3.10% 3.50%
Discover $2,500 2.70% 3.10% 3.25%
Alliant $1,000 2.90% 3.15% 3.35%
Bethpage Federal Credit Union $50 3.05% 3.15% 3.25%
PenFed $1,000 2.70% 3.20% 3.20%
Connexus $5,000 3.21% 3.46% 3.01%
Ally $0 2.75% 3.05% 3.10%
Citibank $250 3.20% 2.00% 2.00%
SchoolsFirst Federal Credit Union $500 N/A N/A 2.90%

More details on the best IRA CD rates

  • APY: 2.60% to 3.60%
  • Minimum deposit: $500
  • Early withdrawal penalty: Six months of dividends
  • Membership eligibility: Only people who live, work, worship or attend school in one of nine Louisiana parishes or are related to a member are eligible for membership. For more details visit EFCU Financial.
Discover
  • APY: 2.70% to 3.25%
  • Minimum deposit: $2,500
  • Early withdrawal penalty: 3 to 24 months of simple interest
  • About the bank: Discover Bank is an online financial services company that offers products such as deposit accounts, credit cards, personal loans and student loans. It eliminated fees on deposit accounts in June 2019.
Alliant Credit Union
  • APY: 2.90% to 3.35%
  • Minimum deposit: $1,000
  • Early withdrawal penalty: 90 to 180 days of dividends
  • Membership eligibility: Current or former employees of Alliant's U.S. partner businesses. Visit Alliant for a complete list of businesses.
  • APY: 3.05% to 3.25%
  • Minimum deposit: $50
  • Early withdrawal penalty: 90 to 180 days dividends on the principal amount withdrawn
  • Membership eligibility: Membership is open to anyone who opens a savings account. 
Synchrony Bank
  • APY: 2.75% to 3.50%
  • Minimum deposit: $0
  • Early withdrawal penalty: 90 to 365 days of simple interest
  • About the bank: Synchrony is an online-only bank that takes advantage of limited overhead to offer attractive rates for deposit accounts. Transactions can be handled via its website or mobile app. Synchrony Bank also offers additional CD types like bump-up or no-penalty that provide more flexibility. 
PenFed Credit Union
  • APY: 2.70% to 3.20%
  • Minimum deposit: $1,000
  • Early withdrawal penalty: 90 to 365 days of dividends earned
  • Membership eligibility: PenFed is a credit union open to everyone. It offers a money market certificate that operates exactly like a CD. 
  • APY: 2.70% to 3.20%
  • Minimum deposit: $5,000
  • Early withdrawal penalty: 90 to 365 days of dividends on amount withdrawn
  • Membership eligibility: Membership is open to anyone based on criteria listed on Connexus
Ally
  • APY: 2.75% to 3.10%
  • Minimum deposit: $0
  • Early withdrawal penalty: 60 to 150 days of interest
  • About the bank: Ally is another online-only bank that offers a robust set of deposit products, loans and services. The bank also offers bump-up CDs (those that adjust to a higher APY if available) and no-penalty CDs. You can handle all of your banking needs through its mobile app or free via the Allpoint ATM network. There are no fees with any accounts, and 24/7 customer support via phone, chat or email.
Citigroup
  • APY: 2.00% to 3.20%
  • Minimum deposit: $250
  • Early withdrawal penalty: 90 to 180 days of simple interest
  • About the bank: Citibank is the third largest bank in the U.S. It is the retail banking arm of global financial services giant Citigroup. New York-based Citibank offers a full suite of financial products and services to its 200 million customers in 160 countries. 
  • APY: 2.90%
  • Minimum deposit: $500
  • Early withdrawal penalty: 90 to 180 days of dividends on principal amount withdrawn
  • Membership eligibility: Membership is limited to current or retired school employees, immediate family members or employees of select businesses. For complete details, visit the SchoolsFirst FCU website.

FAQs

Why should I get an IRA CD?

An IRA CD is an investment account that uses a CD as the investment asset. IRAs offer a tax advantage for those who meet income requirements. IRA CDs allow investors to lock in a fixed APY and insure balances up to $250,000 against losses. Traditional IRA CDs are funded with pretax dollars while profits from Roth IRA CDs are tax-free. These products are best suited for retirement savings as they are subject to income taxes and a 10% penalty if funds are withdrawn before the account owner reaches age 59 1/2  except under exemptions outlined by the IRS.

Can an IRA CD lose value?

IRA CDs purchased through a bank or credit union are insured by the FDIC or NCUA, respectively, for up to $250,000. Any interest compounded is also covered by the insurance making it a low-risk investment. Withdrawing funds from an IRA CD before age 59 1/2 or before the maturity date will result in income taxes and/or early withdrawal penalties that will reduce the value of the account. 

What are alternatives to an IRA CD?

An IRA is a holding account that can contain a variety of assets. This included stocks, bonds or mutual funds. The return on these asset classes fluctuates with market conditions. CDs are a safe investment asset with guaranteed returns. While guaranteed, the returns are typically lower when compared to what you may earn with other investments. If you're looking for safe investments similar to CDs, there are additional safe savings accounts to consider, such as high-yield savings accounts or I bonds.

What is the difference between a traditional or Roth IRA CD?

With a traditional IRA CD, contributions can be deducted from your income, but you will be taxed when you withdraw the money.

With a Roth IRA CD, you can't deduct contributions from your income, but you will not be taxed when you withdraw the money.

What is the difference between an IRA CD and a regular CD?

An IRA CD is a CD that is held within an individual retirement account. The money saved in an IRA CD is intended to be used in retirement and not withdrawn before the owner reaches age 59 1/2.

A regular CD is a special savings account with a fixed APY in exchange for restricting access to deposited funds until a future date, or maturity date. CDs can be purchased with terms that range from three months to five years or more. Once the maturity date has expired, you can withdraw the funds or renew the CD at the current interest rate offered by the bank or credit union.

Methodology

CNET Reviews CD rates based on the latest APY information from issuer websites. We evaluated CD rates from more than 50 banks, credit unions and financial companies. We selected the CDs with the highest APY for one-year terms from among the organizations we surveyed, and considered rates for shorter terms if one-year terms were identical or unavailable.

Banks surveyed include: Alliant Credit Union, Ally Bank, America First Credit Union, American Express National Bank, Axos Bank, Bank of America, Bank of the West, Bank5 Connect, Barclays, BMO Harris, Bread Savings, BrioDirect, Capital One, CFG Community Bank, Citizens Access, Colorado Federal Savings Bank, Connexus Credit Union, Consumers Credit Union, Credit One Bank, Discover Bank, First Internet Bank of Indiana, First Tech Federal Credit Union, FNBO Direct, GO2bank, Golden 1 Credit Union, HSBC Bank, Huntington Bank, Lake Michigan Credit Union, LendingClub Bank, Live Oak Bank, M&T Bank, Marcus by Goldman Sachs, Merrick Bank, Nationwide (by Axos), Navy Federal Credit Union, NBKC, OneUnited Bank, Pentagon Federal Credit Union, PNC, Popular Direct, PurePoint Financial, Quontic Bank, Rising Bank, Salem Five Direct, Sallie Mae Bank, Santander Bank, SchoolsFirst Federal Credit Union, Synchrony Bank, TAB Bank, TD Bank, TIAA Bank, Truist Bank, U.S. Bank, UFB Direct, Union Bank, USAA Bank, Vio Bank, and Wells Fargo.

The editorial content on this page is based solely on objective, independent assessments by our writers and is not influenced by advertising or partnerships. It has not been provided or commissioned by any third party. However, we may receive compensation when you click on links to products or services offered by our partners.