The 2-Year IRA CD, or 24-Month IRA, is a tax-advantaged savings account that functions as a time deposit with a specific maturity date and set interest rate. An easy way to understand this product is to picture a big circle titled “IRA” with a little circle titled “CD. The best IRA CD rates for March 2021. Laura Grace Tarpley, CEPF. 2021-03-01T17:32:57Z The letter F. It indicates the ability to send an email. An image of a chain link. Regular CDs and Rates: Axos Bank offers seven CD options with good rates: 3-month, 6-month, 12-month, 24-month, 36-month, 48-month, and 60-month. Yields apply on all balances above the $1,000 minimum deposit amount and currently sit at 0.20% APY for all products. Capital One — Best mobile app Capital One offers IRA CDs with term lengths from 6 months to 60 months. Rates are competitive, ranging from 0.25% on 6-month IRA CDs to 1.00% on 60-month IRA CDs. Here are Bankrate’s picks for the best IRA CD rates. Delta Community Credit Union. APY: 0.80%-1.25% APY (1 year-5 years) Minimum deposit: $1,000.

1. Capital One Ira Rates
2. Best Ira Cd Rates In California

If you're looking for a guaranteed return on retirement funds, an IRA CD is a good option to consider.

IRA CDs are safe investments and appeal to investors who like the predictability that comes with a fixed annual percentage yield (APY). Use this CD calculator to see exactly how much money you will earn over the term of the IRA CD.

Investing in an IRA CD is relatively easy; it's similar to purchasing a regular CD. But instead of transferring money into a CD from your checking or savings account, you would use funds in your IRA to buy a CD. Or, you could use money from another retirement account.

What is an IRA CD?

Most of us need to save more money to retire comfortably at a time when the American population is living longer.

One way to work toward that goal is to open an individual retirement account (IRA). Typically, your options are a traditional IRA or Roth IRA. Their tax advantages are different. Use Bankrate's calculator to calculate your earnings for a Roth IRA and traditional IRA.

You get to pick what investments go into your IRA. You can use the money you contribute to your IRA to invest in stocks and bonds. You can also invest your money in CDs.

An IRA CD is an individual retirement account where your money is parked in a CD. A CD is a time-deposit account that pays an interest at a set rate in exchange for the saver agreeing to deposit cash for a set term. A CD term varies. You can find CD terms that range from three months to 10 years. Generally, CDs offer a higher rate than savings accounts because they are less liquid.

You may want to consider getting an IRA CD if your tolerance for risk is low and you're looking for a guaranteed return to boost your retirement savings while enjoying tax advantages.

Not everyone is eligible for an IRA, however. Check with your tax adviser to make sure you're able to contribute to an IRA.

Best IRA CD rates for March 2021

Note: The APYs (Annual Percentage Yields) shown are as of Feb. 26, 2021. The rates for some products may vary by region. Some APYs may require higher balances than the minimum deposit. (Banks are listed in order of top 1-year IRA CD APYs at a $25,000 balance.)

What IRA CD is best for you depends on you and your goals. You will want to consider a high rate along with other factors, including the minimum deposit required and its maturity date. The rate the financial institution offers you changes by how long it requires you to keep your money parked - some banks may offer more competitive rates on their 5-year IRA CDs, but not for their 6-month IRA CDs, for example. Consider your time horizon when deciding what's best for you.

Best IRA CD rates: Bank details

Here are Bankrate's picks for the best IRA CD rates.

Delta Community Credit Union

APY: 0.80%-1.25% APY (1 year-5 years)

Minimum deposit: $1,000

Delta Community Credit Union began as the Delta Employees Credit Union in 1940. It was started by eight Delta Air Lines employees. Delta Community Credit Union has more than 400,000 members and has 26 branches in metro Atlanta and three branches outside of Georgia.

Anyone living or working in metro Atlanta and employees of more than 150 businesses are welcome at Delta Community Credit Union. Delta Air Lines, Chick-fil-A and UPS are some of the eligible businesses.

Ally Bank

APY: 0.20%-0.85% APY (3 months-5 years)

Minimum deposit: $0

Ally Bank is an online-only bank that offers more CD options than most direct banks. Ally Bank gives savers options with a High Yield CD and a Raise Your Rate CD. If you fund your IRA CD within 90 days, you'll get its best rate for the term and balance on either the day you open or the day you fund the account. Ally Bank IRA CDs are available as a traditional, Roth and simplified employee pension (SEP) IRA.

Synchrony Bank

APY: 0.15%-0.80% APY (3 months-5 years)

Minimum deposit: $2,000

Synchrony Bank, formerly known as GE Capital Bank, is a subsidiary of Synchrony Financial. Synchrony Bank offers Roth IRA CDs and traditional IRA CDs.

You can't open IRA CDs at branches (there aren't any). You also can't open them online. Instead, you will need to call Synchrony Bank to open an IRA CD. Its corporate headquarters are based in Draper, Utah.

Navy Federal Credit Union

APY: 0.40%-0.95% APY (3 months-7 years)

Minimum deposit: $1,000-$100,000 for some APYs.

Navy Federal Credit Union has more than 9 million members and is the world's largest credit union. It has a global network of 340 branches. Navy Federal Credit Union has its headquarters in Vienna, Virginia.

Membership at Navy Federal Credit Union is open to all Department of Defense and Coast Guard Active Duty, civilian, contract personnel, veterans and their families.

In addition to CDs, Navy Federal Credit Union also offers checking and savings accounts, loans and credit cards.

SchoolsFirst Federal Credit Union

APY: 0.10%-1.15% APY (30 days-5 years)

Minimum deposit: $500-$100,000 for some APYs

SchoolsFirst Federal Credit Union was formed during the Great Depression in 1934. The credit union, created by school employees, has 50 branches.

SchoolsFirst Federal Credit Union has low minimum balances and CD terms from as short as 30 days to as long as five years. CDs at this credit union have four balance tiers: $500, $20,000, $50,000 or $100,000.

Golden 1 Credit Union

APY: 0.20%-1.00% APY (3 months-5 years)

Minimum deposit: $500 (Note: Golden 1 Credit Union offers a one-year IRA CD that only requires $25.)

Golden 1 Credit Union has been around since 1933.

People who work or live in California are eligible to join Golden 1 Credit Union. You just need to open a savings account with at least $1.

Golden 1 Credit Union has around 72 branches in California.

Alliant Credit Union

APY: 0.50%-0.65% APY (1 year-5 years)

Minimum deposit: $1,000

In 1935, what's now Alliant Credit Union was founded as the United Airlines Employees' Credit Union. Alliant currently has 450,000 members nationwide.

You'll need to keep at least $5 in your High-Rate Savings Account in order to keep it open. You'll also need to maintain a $100 daily average minimum balance to earn interest with this account.

Discover Bank

APY: 0.20%-0.60% APY (3 months-10 years)

Minimum deposit: $2,500

In June 2019, Discover Bank eliminated fees on its deposit products. Interest on Discover Bank CDs are compounded daily and credited to your CD monthly. Discover Bank gives a nine-day grace period once your CD matures. Its headquarters are in Greenwood, Delaware.

Suncoast Credit Union

APY: 0.40%-1.25% APY (6 months-5 years)

Minimum deposit: $500

Suncoast Credit Union was started in 1934 as Hillsborough County Teachers Credit Union. Suncoast Credit Union now has 69 branches and has around 918,000 members.

Suncoast Credit Union is the eighth largest credit union in the U.S. based on membership. It is also the 10th largest based on assets.

People who attend school, live, work or worship in a county in Florida that Suncoast Credit Union serves are welcome to join.

Who are IRA CDs best for?

IRA CDs are worth considering if you're looking to diversify your portfolio. You may have other retirement accounts with funds invested in areas where a loss of principal is possible, such as the stock market or exchange-traded funds.

That is also why IRA CDs are a good option for someone with a low-risk tolerance. If you don't like surprises and want to know exactly how much interest the investment will make, a fixed-rate IRA CD provides that certainty. As long as you hold the IRA CD to its maturity, you will earn the expected interest on the IRA CD. It's also worth considering adding to your portfolio if you're nearing retirement.

At a bank, the Federal Deposit Insurance Corp. (FDIC) covers up to $250,000 for the combined balance of all self-directed retirement accounts owned by the same person in the same insured bank.

At a National Credit Union Administration (NCUA) credit union, the National Credit Union Share Insurance Fund (NCUSIF) covers up to $250,000. The coverage is separate from insurance coverage on your other credit union accounts.

What types of IRAs are eligible for a CD?

• Traditional IRA: This is any IRA that isn't a Roth IRA or a SIMPLE IRA, according to the IRS. To contribute to one: you, or your spouse if you're filing jointly, need to have taxable compensation and can't be older than age 70 1/2 . Contributions may be tax deductible if you qualify.
• Roth IRA: An IRA that uses after-tax contributions. Qualified distributions from a Roth IRA aren't taxable.

Where can you buy an IRA CD?

Your IRA is a basket for your investments, and what you can invest in depends on the provider. Not all financial institutions offer CD IRAs, so you will need to find one that does.

Make sure you shop around. Look for institutions that offer competitive CD rates, and pay attention to minimum balance requirements.

When choosing an IRA CD, keep your time horizon top of mind. The biggest risk with a CD is accessing your money before the CD's term ends. Generally, institutions will charge you a penalty if you withdraw money before the CD's maturity date.

Overall, CDs are a safe place to stash your money. They are insured up to $250,000 at banks by the FDIC and at credit unions by the NCUA.

Capital One Ira Rates

Pros and cons of investing in an IRA CD

Before opening an IRA CD, weigh the pros and cons to see if it's the right product for you.

The pros of investing in an IRA CD include:

• A guaranteed return on your investment (as long as you don't withdraw from your CD before it matures).
• Your money is insured up to $250,000 as long as it is held at an FDIC-insured bank or an NCUA credit union.
• Investing in an IRA CD is more straight-forward than investing in stocks or bonds.
• You won't have to worry about fees unless you're penalized for tapping into your account before it matures.

The cons of investing in an IRA CD include:

• If you're younger, you may want to invest in something with the potential for a higher return.
• The rate you earn may not keep up with inflation.

What are the contribution limits for an IRA?

The IRS limits how much you can contribute to your IRA per year.

Those under age 50 can contribute up to $6,000 annually in a traditional or Roth IRA in 2020 or 2021. People aged 50 and older can contribute up to $7,000. These limits didn't change for 2020 or 2021.

Are IRA CDs also subject to the same contribution limits?

Yes. Just like any IRA, the IRS limits how much you can contribute to an IRA CD per year.

Is an IRA CD tax-deductible?

You may be able to deduct some or all of your contributions to a traditional IRA. There are exceptions. For instance, if you exceed a certain income, your deduction might be limited.

Roth IRA contributions aren't deductible. You don't report the Roth IRA contributions on your tax return either.

Can I transfer an IRA CD to another bank?

Yes, you can. A trustee-to-trustee transfer is one way to move your IRA CD from one bank to another. Here, you won't touch the money: Your bank with the maturing CD will send money to your new bank provider. Before moving your money, make sure that your CD has matured in order to avoid potential early withdrawal penalties.

If you are nearing retirement and want your money to be more liquid, consider transferring the IRA CD to an IRA savings account or to an IRA money market account instead of another IRA CD. Check with your bank to make sure the funds don't have to be in this IRA savings account or IRA money market account for a certain period.

What is the penalty for early withdrawal of an IRA CD?

Like any other CD, you will typically pay a penalty if you withdraw your money before an IRA CD matures.

Also, if you withdraw before age 59 1/2 from a traditional IRA CD, you may be subject to pay an additional 10 percent tax on early distributions. The IRS will make exceptions. If the IRA CD term expires within a traditional IRA, you can keep those funds in the IRA but use them to make other investments.

How to effectively use an IRA CD and avoid penalties

To effectively use an IRA CD, fund it with money you won't likely need until after age 59 1/2. This strategy will help you avoid an IRS additional tax.

If your IRA is heavily invested in risk assets, parking money in an IRA CD can help you diversify your portfolio. With an IRA CD, you will get a guaranteed return and tax benefits.

IRA CD vs. CD

Just like when you open a regular CD, your time horizon is very important when choosing an IRA CD. With a regular CD, withdrawing your money too early may result in an early withdrawal penalty. If the funds are in a traditional IRA CD and you withdraw from the CD both before its term is up and before you turn 59 1/2, you may incur an early withdrawal penalty from your bank and a 10 percent early withdrawal tax.

Unlike a regular CD, contributions to a traditional IRA may be tax-deductible. But you can't deduct contributions that you make to a Roth IRA CD.

IRA CD risks

IRA CDs are just as safe as a regular CD, as long as they are opened at an FDIC-insured bank or an NCUA credit union and don't surpass the insurance limits. For instance, IRAs fall in the 'Certain Retirement Account' category at the FDIC. The coverage limit is $250,000 per owner on IRAs at an FDIC bank in a deposit product, such as a savings account or a CD. At a credit union, the National Credit Union Share Insurance Fund covers an IRA separately from insurance coverage on your other credit union accounts. The NCUSIF covers an IRA at a credit union up to an additional $250,000.

Use the FDIC Electronic Deposit Insurance Estimator and contact your FDIC-insured bank to confirm that your account is insured. At a credit union, use the Share Insurance Estimator and contact your credit union to confirm your account meets insurance requirements.

Is an IRA CD better than an IRA savings account?

An IRA CD may have a higher APY than an IRA savings account. It also might be a more appropriate option because, for the most part, IRA funds consist of money that you don't plan on touching.

On the other hand, if you're over 59 1/2 and plan to actively make withdrawals out of your traditional IRA, then an IRA savings account might make more sense, rather than paying early withdrawal penalties - imposed at your bank - for withdrawing from the CD early.

Learn more:

Getting an IRA CD

IRA CDs can be added to an IRA portfolio, regardless of whether it’s a traditional, Roth or SEP IRA. IRA CD rates are competitive and this type of CD has almost no risk — but does have a guaranteed return.

The best IRA accounts — which are basically tax-advantaged accounts to help you start saving for retirement — come with plenty of lucrative and high-quality investment options for you to choose from. One of the most popular no-risk investments you can use to round out your portfolio is an IRA certificate of deposit (CD), also commonly known as an IRA CD.

If you’re asking yourself “what is an IRA CD?” or “what are the best IRA CD rates?” then you’re asking the right questions. The best IRA CDs offer great return rates, flexible term lengths, low early withdrawal penalties and a streamlined investment process.

Compare the 6 best IRA CD rates of 2020

6 best IRA CD lenders of 2020

• Ally Bank — Best online bank
• Alliant — Best credit union
• Capital One — Best mobile app
• Discover — Best one-stop banking
• TIAA Bank — Best for yield pledge promise
• Synchrony — Best customer service

Ally Bank — Best online bank

High-yield IRA CDs from Ally Bank are available with term lengths from 3 months to 5 years. The APR rates on IRA CDs span from 0.50% to 1.15% APR and increase as the term length increases. There’s no balance requirement to open an Ally IRA CD, and the bank will let you choose between two rates on your CD: the rate that’s available the day you open it or the day you fund it — whichever is higher. The limit on that rate guarantee is 90 days, and Ally Bank CDs can be opened and managed completely online.

Alliant — Best credit union

Banks aren’t the only institutions to offer IRA CDS; credit unions also offer IRA CDs. Alliant Credit Union has IRA CDs available with terms from 12 months to 60 months. APY rates range from 0.65% to 0.75% depending on the term. Alliant’s minimum deposit requirement is low — only $1,000 — and this credit union has no maximum deposit amount on CDs. The dividends are compounded every month and at maturity, and funds are insured up to $250,000 by NCUA.

Capital One — Best mobile app

Capital One offers IRA CDs with term lengths from 6 months to 60 months. Rates are competitive, ranging from 0.25% on 6-month IRA CDs to 1.00% on 60-month IRA CDs. Capital One IRA CDs have no account minimums, which means that no one will be priced out of this investment option. Capital One also has a highly-rated mobile app available to help you manage your IRA CDs and other accounts.

Discover — Best one-stop banking

Opening an IRA CD through Discover will require a larger initial investment than many of the competitors, with a minimum of $2,500 to get started. The APY rates on Discover IRA CDs range from 0.90% to 1.15%, and term lengths range from 12 months to 5 years. If you’re looking for term length flexibility, Discover offers it.

TIAA Bank — Best for yield pledge promise

If you’re worried that you’re missing out on better IRA interest rates elsewhere, the yield pledge promise from TIAA Bank was made for you. This bank guarantees it looks at comparable banks weekly and will adjust its rate to ensure it’s offering a rate in the top 5% of offers, so the rate you open your IRA CD at will likely be in the higher tier. IRA CDs with TIAA are available with terms from 3 months to 5 years, with rates from 0.35% to 1.35% APY. The minimum to open an account with Yield Pledge is $5,000, but the bank also offers a basic CD and a bump-rate CD with smaller deposit requirements, though you are not guaranteed higher rates.

Synchrony — Best customer service

Synchrony offers competitive IRA CDs with terms from 3 months to 5 years. Rates range from 0.25% to 1.20% APY depending on the term length. The minimum opening balance of $2,000 is a little high, but what’s great about Synchrony is the excellent customer service, and the bank even has dedicated customer support phone lines for long-term customers.

What is an IRA CD?

An IRA is a tax-advantaged account that you can set up when saving for retirement. Within your IRA account, you can have many different types of investments, much like a standard investment portfolio, including certificates of deposit (or CDs).

A CD gives you a fixed-rate, no-risk return for investing money that you leave untouched for a certain period of time. An IRA CD is basically just a standard investment CD — the only difference is that it’s part of your retirement savings account.

IRA CD vs. other investment accounts

IRA CD vs. standard CD

Best Ira Cd Rates In California

Standard CDs and IRA CDs operate similarly. With both products, you are given a guaranteed rate of return in exchange for leaving a sum of money deposited for a certain period of time. The main difference is that an IRA CD is housed within a retirement account and a standard CD is simply a standard investment account.

When your IRA CD matures, the funds stay within your IRA account. With a standard CD, you can cash out and use the funds as you please. The one exception is a Roth IRA, which allows you to withdraw contributions at any time without penalty. Compare CD rates to see the difference between the two.

IRA CD vs. IRA account

Comparing an IRA CD to an IRA account is a little like comparing apples to oranges. An IRA CD is a type of investment that is part of a portfolio account, and an IRA account is the portfolio account that houses investments like IRA CDs.

The term IRA account refers to the entire investment portfolio that you have. This can be a SEP, Roth or traditional IRA account. Within each of those accounts, you have different types of investments. One of those investment options is an IRA CD. Basically, an IRA CD is an investment that is part of an IRA account.