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Best IRA CD Rates

An IRA CD can be a safe investment choice for any retirement portfolio.

Best CD Rates

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There’s no one way to prepare for retirement. But an individual retirement account, or IRA, is one of the most flexible options because you can fill the account with different investment assets -- including certificates of deposit

Like a regular CD, an IRA CD lets you deposit a sum of money with a bank and earn a guaranteed rate of return -- typically at a fixed interest rate -- for the duration of the CD term. In exchange, you agree not to withdraw your money until you reach the end of the term. Otherwise, you may pay an early withdrawal penalty that can reduce your interest earnings or even eat into your principal. 

Unlike stocks and bonds, CDs won’t lose value and are insured by either the Federal Deposit Insurance Corporation or National Credit Union Administration, respectively, meaning you’ll never end up with less money than you started with (unless you’re charged an early withdrawal penalty). And, because the rate of return is guaranteed and locked in when you open the CD, you can easily predict how much you’ll earn.

If you’re nearing retirement, or want to hedge your risk with a safe investment that has guaranteed returns, an IRA CD can be an excellent addition to your IRA portfolio. But if you’re still years away from retirement with time to grow your money, you’ll be better off investing your IRA in higher-earning (but riskier) options, such as stocks, high-yield bonds and funds.

What is an IRA CD?

As the letters suggest, an IRA CD is a certificate of deposit held in an individual retirement account. Like a traditional CD, you’ll need to lock up the amount you invest for a specific term, between three months and 10 years. During that time, you’ll earn a fixed rate of return. If you need to withdraw before the end of the term, you’ll incur a penalty, which is typically a portion of your interest earned.

What’s more, the IRA your CD will be held in contains additional restrictions for withdrawal. Because IRAs are meant to help you invest for retirement, you won’t be able to access your money without a 10% tax penalty on the amount you withdraw until age 59 1/2 (with some exceptions). Once you’ve reached that age, you can enjoy the account’s tax benefits. 

Many banks and credit unions offer IRA CDs that can go in either a traditional or Roth IRA. A traditional IRA lets you save for retirement with pretax money that you pay taxes on when you withdraw. Roth IRAs are funded with money already taxed, and your withdrawals are tax-free after age 59 1/2. (You can withdraw contributions at any age after five years from account opening, but not earnings.)

Combining a CD’s longer-term savings requirement with the stability of a fixed-rate APY creates a stable investment option. One benefit of using an IRA CD issued by a federally insured bank or credit union is fixed-rate growth that’s insured against loss up to $250,000 per person, per institution by the FDIC or NCUA.

CNET’s picks for the top IRA CD rates

BankMinimum deposit1-year3-year5-year5-year return on $10,000
Bethpage Federal Credit Union$504.75%3.75%4.00%$2,167
Rates as of May 16, 2023.

More details on the best IRA CDs

Min. deposit to open
  • Early withdrawal penalties range from 90 to 365 days’ worth of simple interest on the principal withdrawn
  • Terms range from three to 60 months
  • Offers both traditional and Roth IRA CDs
  • Offers no-penalty and bump-up CDs for certain terms
  • Can withdraw interest without early withdrawal penalty (separate tax penalties may apply)
  • Must call to open an account

About the bank: Synchrony is an online-only bank that uses limited overhead to offer attractive rates for deposit accounts. Its IRA CD rates are competitive for most terms, and you have several options for term lengths and CD types. 

You can open a new IRA CD, transfer an existing IRA from another institution or rollover funds from qualifying employer-sponsored retirement plans. However, you’ll need to call the bank for most of these options. Unlike its non-IRA CD accounts, there doesn’t seem to be an option to open an IRA CD online. If you’re looking for more retirement options, Synchrony also offers IRA money market accounts.


Min. deposit to open
  • Early withdrawal penalties range from three to 24 months’ worth of simple interest on the amount withdrawn
  • Terms range from three to 120 months
  • Offers both traditional and Roth IRA CDs
  • Allows rollovers and transfers from another retirement plan or financial institution
  • No early withdrawal penalties if you’re making a withdrawal as part of a Required Minimum Distribution

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. Its IRA CDs offer competitive rates and come in a wide variety of term options, up to 10 years. However, Discover doesn’t offer no-penalty or bump-up CDs. In addition to IRA CDs, Discover also offers an IRA savings account. The bank’s 24/7 customer service, and highly rated mobile app, make it easy to manage your money.

Alliant Credit Union

Read Alliant Credit Union Review
Min. deposit to open
  • Early withdrawal penalties range from seven to 180 days’ worth of dividends 
  • Terms range from three to 60 months
  • IRA certificates can only be opened by phone
  • Offers higher rates on jumbo certificates ($75,000 or higher) for certain terms
  • Offers traditional, Roth and SEP IRA certificates
  • No penalties for monthly dividend withdrawals

 About the bank: Alliant Credit Union is an online credit union that offers deposit accounts, credit cards, loans and investment accounts. As a credit union, its products and services are only available to members. Membership is open to current or retired employees of Alliant’s partner organizations and businesses, residents of eligible communities in Chicago and immediate family members of current Alliant members. If you’re not eligible through any of those options, you can become eligible for membership by joining Foster Care to Success (FC2S), Alliant’s partner nonprofit.

Alliant offers competitive rates on its CDs (known at credit unions as “share certificates”), with marginally higher rates for balances above $75,000. In addition to the standard traditional and Roth IRA options, Alliant also offers SEP IRA certificates for self-employed individuals.

Bethpage Federal Credit Union

Min. deposit to open
  • Early withdrawal penalties range from 90 to 180 days’ worth of dividends on the principal amount withdrawn
  • Terms range from three to 60 months
  • Offers 39-month “bump-up” IRA certificates
  • Offers traditional and Roth IRA certificates
  • Must schedule an appointment to open an IRA certificate

About the bank: Bethpage Federal Credit Union has its headquarters and all of its branches in New York. Still anyone who opens a savings account with a $5 deposit can become a member. In an environment where many of the best CD rates available are exclusive to online banks, Bethpage is a rare institution that offers both competitive rates on its share certificates and 32 physical branches for customers to get help in person. To open an IRA certificate, you’ll need to schedule a video, phone or in-person appointment.

PenFed Credit Union

Min. deposit to open
  • Early withdrawal penalty: All dividends earned (if early withdrawal occurs within the first year) or 30% of the dividends that would’ve been earned had the certificate been held to maturity, not to exceed the total dividends earned so far (if early withdrawal occurs after the first year) 
  • Terms range from 12 to 84 months
  • Offers traditional, Roth and SEP IRA certificates
  • Early withdrawal penalty won’t exceed the value of dividends earned so far, meaning you won’t lose any of your principal
  • Can only open an IRA certificate by printing and submitting a paper application

About the bank: Pentagon Federal Credit Union, or PenFed, is the second-largest federal credit union in the US. Membership is open to anyone who opens a PenFed savings account with a $5 deposit. The credit union offers a large variety of financial products, including three different types of IRA accounts -- IRA certificates, an IRA savings account and an IRA premier account, which is similar to the savings account but requires a higher minimum balance.

PenFed’s IRA CDs have competitive rates but fewer options for short-term certificates. They’re also more of a hassle to open, as you must print and sign a physical copy of the paperwork and then fax or mail it to PenFed.

Connexus Credit Union

Read Connexus Credit Union Review
Min. deposit to open
  • Early withdrawal penalties range from 90 to 365 days’ worth of dividends on amount withdrawn
  • Terms range from 12 to 60 months
  • Offers traditional and Roth IRA share certificates
  • Special rate on 15-month share certificates
  • Higher rates on jumbo share certificates for some terms
  • Must call to open an IRA share certificate

About the bank: Headquartered in Wausau, Wisconsin, Connexus Credit Union serves customers in all 50 states through its online banking platform as well as its 5,000 shared branches through the Co-op Shared Branch network. Membership is open to those affiliated with the employers or organizations listed here, residents of select communities in Illinois, Minnesota, Ohio and Wisconsin, and family members of current members. Anyone can gain eligibility by joining the Connexus Association, the credit union’s partner nonprofit, with a $5 donation.

Connexus offers a good selection of IRA certificate rates and terms But keep in mind there’s a  $5,000 minimum opening deposit, and you need to call a representative to open a share certificate.

Min. deposit to open
  • Early withdrawal penalties range from 60 to 150 days’ worth of interest
  • Terms range from three to 60 months
  • Offers traditional, Roth and SEP IRA CDs
  • Early withdrawal penalty waived for Required Minimum Distributions
  • If you fund your CD within 90 days, you’re guaranteed the best rate offered for your term and balance, on either the day you open or the day you fund
  • Must fund account within 90 days of opening
  • Raise Your Rate CDs are available for two- and four-year terms

About the bank: Ally is another online-only bank that offers a robust set of deposit products, loans and services. You can handle all of your banking needs through its mobile app or online banking portal. There are no fees with any accounts, and 24/7 customer support is available via phone, chat or email. 

In addition to having competitive rates on its IRA CDs and a wide range of CD terms and IRA types, Ally’s IRA CDs also come with a unique offering: If you fund your CD within 90 days of opening, you’re guaranteed the best available rate for your term and balance, whether the higher rate is from the time you opened your CD or the time you funded your CD. Ally also offers Raise Your Rate CDs -- which allows you to raise your CD rate a certain number of times if Ally’s rate goes up during your CD term -- for two- and four-year CDs.


Min. deposit to open
Min. balance to open
  • Early withdrawal penalties range from 90 to 180 days’ worth of simple interest
  • Terms range from three to 60 months
  • Products and pricing may vary by ZIP code
  • Offers traditional and Roth IRA CDs
  • Offers a variable-rate CD product, where the rate might change after account opening
  • Must download and mail in a paper application, visit a branch or call a representative to open an IRA CD

About the bank: Citibank is one of the largest banks in the US. 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. 

Citibank offers two options for IRA products: insured money market accounts and CD accounts. Among those two products, you can choose between a traditional and Roth IRA. Citibank offers a large range of IRA CD terms, including uncommon ones like four or seven months. However, those terms payout paltry rates, meant to disincentivize customers from choosing those terms. On the other hand, rates for more common terms like six months or one year are competitive with what the best IRA CDs offer. 

Citibank also has a unique 18-month variable rate IRA CD, where the rate might change after your account is opened. Most CDs have a fixed rate that you lock in when you open the account.

Pros and cons of investing in IRA CDs


  • An IRA offers a tax advantage for those who meet income requirements.

  • IRA CDs allow investors to lock in a fixed APY. CDs at federally insured banks and credit unions protect balances against losses of up to $250,000 per person, per institution.

  • Traditional IRA contributions are deducted from your annual income, but taxed when you withdraw your money.

  • For Roth IRA contributions, you can’t deduct from your annual income, but you’re not taxed upon withdrawing the funds.


  • These products are subject to income taxes and a 10% penalty if funds are withdrawn before the account owner reaches age 59 1/2, in addition to early withdrawal penalties, except under exemptions outlined by the IRS.

  • Interest rates are locked in at the time of purchase, which could represent a missed opportunity to capitalize on growth if interest rates continue to rise.

  • Inflation continues to outpace the APYs currently paid, even on the highest-yielding IRA CDs.

Are IRA CDs a smart investment?

An IRA CD can be wise investment, especially for investors looking to diversify their portfolios. You should consult a qualified investment adviser to ensure that your specific investment goals are taken into consideration. In general, IRA CDs represent a low-risk investment option with a fixed rate of return that can be used to plan your investment strategies better.

However, if you have a long time horizon -- such as a young adult saving for retirement decades in the future -- you may get better returns from the stock market. Although investing in stocks is more risky than a guaranteed return from CDs, especially over the short term, a diversified portfolio of stocks generally provides a more significant return in the long run than CDs. 

How to invest in an IRA CD

  • Compare rates to find the best option for your investment. Compare rates, terms and conditions of IRA CDs from banks, credit unions and brokerage firms to find the most favorable option.
  • Choose what type of CD fits your investment best. Decide whether you’d like to open a traditional or Roth IRA CD.
  • Complete an application. You’ll need to verify your identity with a government-issued ID, Social Security number and account numbers used to fund the IRA CD.
  • Fund the IRA CD. Deposit or transfer the required minimum amount.


IRA CDs purchased through federally insured banks or credit unions are insured by the FDIC or NCUA, respectively, for up to $250,000 per person, per institution. Insurance covers any interest compounded, making it a low-risk investment. Withdrawing funds from an IRA CD before age 59 ½ or before the maturity date will result in income taxes and/or early withdrawal penalties that will reduce the value of the account.

An IRA is a holding account that can contain a variety of assets. This includes stocks, bonds or mutual funds. The return on these asset classes fluctuates with market conditions. CDs are  safe investment assets 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.

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.

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 59½.

A regular CD is a special savings account with a fixed APY in exchange for restricting access to deposited funds until a future date, also known as a maturity date. CDs can be purchased with terms that typically range from three months to up to 10 years. 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.


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.

This article includes some material that was previously published on NextAdvisor, a CNET Money sister site that was also owned by Red Ventures and which has merged with CNET Money. It has been edited and updated by CNET Money editors.

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.

Raina He is an editor at CNET Money. She writes and edits articles about personal finance, with a focus on credit cards, banking and loans. She graduated from the University of North Carolina at Chapel Hill with a B.A. in Media and Journalism. Before coming to CNET Money, she was an editor at NextAdvisor, a personal finance news site that shared a parent company with CNET Money.
Holly Johnson is a credit card expert and writer who covers rewards and loyalty programs, budgeting, and all things personal finance. In addition to writing for publications like Bankrate,, Forbes Advisor and Investopedia, Johnson owns Club Thrifty and is the co-author of "Zero Down Your Debt: Reclaim Your Income and Build a Life You'll Love."