Top 10 IRA CD rates for August 2024: Unlock higher interest earnings
When it comes to securing a comfortable retirement, understanding your investment options is crucial. One such option is an individual retirement account (IRA) in the form of a certificate of deposit (CD).
An IRA CD is seen as a low-risk investment vehicle that combines the tax benefits of IRAs and with the higher rates of CDs. It’s a great option when combined with other types of retirement investment products, especially with current market rates for CDs exceeding 5% among the top competitors.
The 10 best IRA CDs of August 2024
Our picks for the top 10 IRA CDs
According to our research, here are the top 10 best IRA CDs with some of the highest APYs, including the key figures you should know before you open an account.
CD rates, minimum deposit requirements, and fees are up to date as of August 28, 2024, and are subject to change.
1. America First Credit Union: Up to 5.25% APY
America First Credit Union, based in Ogden, Utah, primarily serves member residents in the Southwest and Western states.
America First provides full-service personal and business banking products, including depository accounts, loans, credit cards, and high-yield IRA CDs.
America First Credit Union
| Top APY: | 5.25% |
| Minimum deposit to open: | $500 |
| Term lengths available: | Three months to 60 months |
Why we picked it
America First has some of the highest rates in the market with APYs exceeding 5% on its IRA CDs. It also offers flexible terms, such as the ability to bump up your rate during the CD term.
What to consider before opening
America First’s banking services are limited to those who live and work in the Southwest and West, including Arizona, California, Idaho, Nevada, New Mexico, Oregon, and Utah, or to anyone nationwide through the banking platform Raisin.
See more America First products and services
America First Credit Union offers several checking and savings accounts as well as money market accounts and regular CDs.
2. Suncoast Credit Union: Up to 5% APY
In 1934, Suncoast Credit Union opened in Tampa, Florida, to serve teachers in Hillsborough County. It has since expanded to offering financial services to school employees within the state’s Suncoast region, their relatives, and local communities.
Suncoast offers local residents and businesses several different types of checking, savings, and retirement accounts, including high-interest IRA CDs.
Suncoast Credit Union
| Top APY: | 5% |
| Minimum deposit to open: | $500 |
| Term lengths available: | Six months to five years |
Why we picked it
Suncoast Credit Union has IRA CDs with rates ranging from 3.85% for a 36-month term to 5% for a 12-month term, making it among the highest rate offerings in the market. Also, you can get up to 5.25% APY for a 12-month jumbo IRA CD which requires a minimum of $100,000 to open.
What to consider before opening
The only way to open an IRA CD is by visiting a branch of Suncoast Credit Union or calling their customer service line. There may be a withdrawal penalty if you remove funds before the CD term ends.
See more Suncoast Credit Union products and services
Suncoast also offers a handful of other accounts, including savings, checking, and regular CDs that it calls “share certificates.”
3. Ally Bank: Up to 4.90% APY
Ally, based in Detroit, is an online-only bank that offers a full suite of banking products and services, including deposit accounts, loans, credit cards, and investment accounts.
Ally has several different types of IRA CD accounts with some APYs up to 5%.
Ally Bank
| Top APY: | 4.90% |
| Minimum deposit to open: | $0 |
| Term lengths available: | Three months to five years |
Why we picked it
Ally offers seven different terms for its IRA CDs, with rates ranging from 3% for three months to 4.90% for six months. There are also no maintenance fees or minimum deposit amounts, but you will need funds to earn interest.
What to consider before opening
When your IRA CD matures, there is a 10-day grace period to withdraw your money at no charge. Take note that Ally Bank does not have any physical branches, but it does have more than 43,000 free ATMs and 24/7 customer service.
See more Ally Bank products and services
Ally Bank also has interest-earning checking and savings accounts as well as high-yield traditional CDs. Most of these accounts do not have a minimum deposit amount required to open, but keep in mind the earned interest is based on the amount of funds in the account.
Learn more: Read our Ally Bank review
4. Synchrony Bank: Up to 4.85% APY
Synchrony Bank is an online-only bank that offers several banking products, such as savings, money market accounts (MMAs), and CDs. The bank offerings are limited—it does not offer a checking account—but the highest APYs on an IRA CD are competitive.
Synchrony Bank
| Top APY: | 4.85% |
| Minimum deposit to open: | $0 |
| Term lengths available: | Three months to five years |
Why we picked it
Synchrony Bank has some of the highest rates for IRA CDs among competitors, with APY’s reaching 4.85% for a nine-month term and down to 0.25% for a three-month term. The bank also has a CD that does not charge early withdrawal penalties with an APY of 0.25% for 11 months. There are no minimum deposit amounts, but you will need to fund the account to earn interest.
What to consider before opening
Aside from the one IRA CD with a no-penalty offering, most of Synchrony’s other CDs will have a fee for withdrawing funds before the initial term ends. The bank requires you to call the customer support line to open an IRA CD. Also, it does not offer a checking account.
See more Synchrony Bank products and services
As far as deposit products are concerned, Synchrony Bank is limited to savings and MMAs, in addition to CDs. Most of these banking products have no balance requirement to open an account and no monthly maintenance fee.
5. Digital Federal Credit Union: Up to 4.86% APY
Digital Federal Credit Union (DCU) is the largest credit union in New England and has a wide range of product offerings including loans, credit cards, mortgages, and checking and savings accounts for both personal and both businesses.
Digital Federal Credit Union
| Top APY: | 4.86% |
| Minimum deposit to open: | $500 |
| Term lengths available: | Three months to five years |
Why we picked it
DCU has fairly competitive IRA CD rates with its highest APY of 4.86% for a three- to five-month term. If market rates climb higher during the term of a CD, the credit union offers the ability to increase your rate one time for CDs with a term of either 15 months or 27 months.
If you have at least $25,000 saved to place in a CD, Digital Federal Credit Union has a jumbo CD with higher yields up to 5.13%. It also offers a “Quickstart CD” for members under 23 years old that requires a low minimum balance of $100 and an APY of 4.86%.
What to consider before opening
DCU does charge a penalty fee for withdrawing the funds prior to the CD term ending. The withdrawal penalty fee varies based on the term of the CD with an amount based on the dividend earned.
See more Digital Federal Credit Union products and services
DCU has several very high-yielding savings and checking accounts. Its deposit products, including CDs, offer flexibility based on your available funds or if you want to stagger several short-term CDs to mature at different dates, which helps build a steady stream of returns. This is often called CD laddering.
6. NASA FCU: Up to 5.20% APY
NASA FCU is a full-service credit union offering a wide range of banking products, including mortgages, loans, and credit cards, as well as deposit and investment accounts. NASA FCU also provides financing solutions for members pursuing higher education.
NASA FCU
| Top APY: | 5.20% |
| Minimum deposit to open: | $1,000 |
| Term lengths available: | Three months to five years |
Why we picked it
NASA FCU offers some of the highest-yielding IRA CDs in the nation with rates reaching 5.20% for a nine-month CD. Its lowest rate, at 3.95% for a 60-month CD, is still competitively priced.
What to consider before opening
NASA FCU is limited to anyone who joins the National Space Society (NSS) or is part of the NASA community, though you can get a one-year affiliated membership to the NSS for free through the FCU if none of the other membership eligibilities apply to you.
See more NASA FCU products and services
NASA FCU also offers savings, checking, and regular CDs:
Learn more: Read our NASA FCU review
7. Alliant Credit Union: Up to 4.75% APY
Alliant Credit Union (CU) is headquartered in Chicago but is a fully digital credit union, offering high-rate deposit accounts, mortgages, credit cards, loans, and investment accounts.
Alliant Credit Union
| Top APY: | 4.75% |
| Minimum deposit to open: | $1,000 |
| Term lengths available: | Three months to five years |
Why we picked it
Alliant has fairly competitive IRA CD rates with APYs up to 4.75%. While it’s not the highest in the market, there are benefits, such as the ability to get that same rate across different types of CDs.
What to consider before opening
You must first be a member of Alliant to access their banking products. Opening any IRA account requires calling a representative of the credit union.
See more Alliant Credit Union products and services
Alliant has several different high-yielding deposit accounts, including savings, checking, and CDs.
Learn more: Read our Alliant Credit Union review
8. TD Bank: Up to 5% APY
TD Bank offers an extensive range of personal and business banking as well as investment products. It’s headquartered in Cherry Hill, New Jersey, but its parent group, TD Bank Group, is based in Toronto.
TD Bank’s IRA CDs have some of the highest APYs in the market. It also offers bonus deals periodically, such as up to $300 for opening a checking account when qualifying direct deposits are met.
TD Bank
| Top APY: | 5% |
| Minimum deposit to open: | $250 |
| Term lengths available: | Three months to five years |
Why we picked it
TD Bank has some of the highest rates for IRA CDs among competitors with APYs reaching 5% for a six-month term and down to 3% for a three-month term. Partial and full withdrawals may be made without penalty during a 10-day grace period that begins on each anniversary of account opening.
What to consider before opening
To qualify for the top-tier CD rates, you must have a qualifying TD checking account.
See more TD Bank products and services
TD Bank also has a handful of interest-earning checking and savings accounts as well as regular CDs with promotions to get higher APYs.
Learn more: Read our TD Bank review
Delta Community Credit Union is the largest credit union based in Georgia offering a full array of financial services including deposit accounts, credit cards, loans, investment accounts, and different high-yield CDs with varying terms.
Delta Community Credit Union
| Top APY: | 4.95% |
| Minimum deposit to open: | $1,000 |
| Term lengths available: | 12 months to five years |
Why we picked it
Delta Community Credit Union offers IRA savings accounts and IRA CD accounts that meet or exceed traditional banking institutions with an IRA savings APY of 0.35% and IRA CDs as high as 4.95% APY. Delta Community Credit Union also offers a $25,000 scholarship to students of historically Black colleges and universities (HBCUs).
What to consider before opening
Delta Community’s membership requires a Georgia residency or association with the Delta Community of companies and professional associations.
See more Delta Community products and services
Delta Community offers other deposit accounts that earn interest at a low cost of entry:
10. Discover: Up to 5.10% APY
Discover bank is an online-only bank that offers a full suite of banking products and services, such as deposit accounts, loans, credit cards, and investment accounts, with an emphasis on earned rewards for everyday spending.
Discover has several different types of IRA accounts including a high-rate CD with APYs up to 5.10%.
Discover Bank
| Top APY: | 5.10% |
| Minimum deposit to open: | $2,500 |
| Term lengths available: | Three months to 10 years |
Why we picked it
Discover has one of the longest-term IRA CDs available in the market at 10 years and one of the highest APYs of 5.10% for a nine-month CD.
What to consider before opening
With one of the highest CD APYs in the country, Discover also offers a cash-back checking debit card that offers 1% cash back on purchases up to $3,000 per month with no balance or activity requirements.
See more Discover products and services
Discover has other very high APYs for depository accounts, including online savings and cash-back checking accounts, and traditional CDs.
Learn more: Read our Discover Bank review
What to know about IRA CDs
IRA CDs offer the tax advantages of an IRA with the fixed interest rates of a CD, making them an attractive option for conservative investors looking to grow their retirement savings steadily.
Typically, there are two types of IRA CDs:
- Traditional IRA CDs: A traditional IRA CD allows you to contribute pretax dollars, which means you get a tax deduction upfront. The earnings in your IRA grow tax-deferred until you withdraw them during retirement, at which point they are taxed as ordinary income.
- Roth IRA CDs: A Roth IRA CD is funded with post-tax dollars, meaning there is no immediate tax deduction. However, the earnings grow tax-free, and qualified withdrawals during retirement are also tax-free, offering significant tax advantages in the long run.
What Is the Difference Between a CD and an IRA?
While both CDs and IRAs are popular investment options, they serve different purposes and come with distinct features. A CD is a deposit offered by banks and credit unions, where you agree to leave a lump sum of money for a fixed period of time in exchange for a guaranteed interest rate. Typically, CDs are used for short- to medium-term savings goals and offer a predictable return.
Conversely, an IRA is a retirement savings account that offers tax benefits to encourage long-term saving. IRAs can hold a variety of investments, including stocks, bonds, mutual funds, and CDs. The main difference is in the tax treatment and the flexibility of investment choices.
While a CD offers a fixed return, an IRA provides the potential for higher returns through diversified investments but comes with more complexity and risk.
Why choose an IRA CD vs. a traditional CD?
When deciding between an IRA CD and a traditional CD, consider your long-term financial goals and your need for cash liquidity in the near term.
An IRA CD is typically used for retirement savings and offers tax advantages that are more beneficial for those focused on long-term wealth accumulation.
Additionally, some banks offer a no-penalty IRA CD that can provide flexibility if you need to access your money before the CD maturity date. This feature allows you to withdraw your funds without incurring penalties, which is useful if you encounter unexpected expenses or decide to reinvest your money into higher-yield opportunities.
How To Rollover an IRA CD to an IRA
- Consult your financial advisor: Before making any changes, discuss your plans with a financial advisor to ensure they align with your retirement strategy and your current budget.
- Contact your current IRA CD provider: Request the necessary forms and information to initiate the rollover process. Be sure to ask for the terms, if there are any fees, and the process for when you can roll over into an IRA.
- Open a new IRA, if needed: If you don’t already have an IRA account to receive the rollover, open one with your preferred financial institution.
- Complete the rollover forms: Fill out the required paperwork, specifying that you want a direct rollover to avoid tax penalties.
- Transfer the funds: After the forms are confirmed as submitted, your current provider should transfer the funds directly to your new IRA account, completing the rollover process.
Pros and cons of an IRA CD
Pros
- Tax advantages: One of the biggest perks of an IRA is the tax benefits, whether it’s tax-deferred growth with a traditional IRA or tax-free growth with a Roth IRA.
- Low-risk investment: IRA CDs offer a guaranteed interest rate, making them a safe choice for conservative investors, though you might want to balance it with higher-earning investments if you have a greater risk tolerance.
- Predictable returns: You will know exactly how much interest you’ll earn over the term of the CD.
Cons
- Limited growth potential: The fixed interest rate on CDs is generally lower than the potential returns from other investment options, such as stocks or mutual funds.
- Early withdrawal penalties: With traditional IRA CDs, withdrawing funds before the CD matures can result in penalties and taxes.
- Inflation risk: The fixed returns may not keep pace with inflation, potentially reducing your purchasing power over time.
How to choose the best IRA CD for you
Before selecting the right IRA CD for you, consider several key factors:
- Assess and compare the interest rates offered by various financial institutions, as these can vary greatly. Higher rates generally yield better returns, so it’s wise to shop around.
- Evaluate the term lengths available. Typically, CDs come in terms ranging from a few months to five years or more. Choose a term that matches your liquidity needs and long-term investment strategy. It’s also essential to review any associated fees, such as withdrawal penalties because it can reduce your earnings.
- Consider the financial institution’s reputation and stability. Look for banks insured by the Federal Deposit Insurance Corp. (FDIC) or the National Credit Union Administration (NCUA), as these institutions are regulated federally and offer deposit insurance. By weighing these factors carefully, you can make better-informed decisions for your retirement planning.
Alternatives to IRA CDs
For those looking to diversify their retirement savings, several other investment options can complement or replace IRA CDs:
- Mutual funds: Offer diversification and the potential for higher returns by selling shares of a portfolio of stocks, bonds, and other securities.
- Exchange-traded funds (ETFs): Similar to mutual funds but traded like stocks, ETFs provide flexibility and often lower fees.
- Stocks and bonds: Directly investing in individual companies or government or corporate debt can offer higher returns, but it also carries higher risk.
More tips for retirement planning
Planning for retirement involves more than just choosing the right investments but establishing a long-term strategy that likely includes a combination of investments at different risk levels.
Here are a few additional tips to help you secure your financial future:
- Start early: The earlier you begin saving and investing, the more time your money can earn interest and grow.
- Diversify your portfolio: Spread your investments across different asset classes to reduce risk.
- Review your plan regularly: It’s critical to keep a steady eye on your investments and returns and make adjustments as needed based on your financial goals. This also helps you adjust your portfolio against market ebbs and flows.
- Maximize employer contributions: When possible, take full advantage of any employer match programs for your retirement accounts.
- Consult a financial advisor: Professional advice can provide personalized strategies, help you monitor your investments, and keep a balanced portfolio throughout your financial life cycle.
Our methodology
The Fortune Recommends team compared IRA CDs from over 10 major banks, credit unions, and online-only banks.
For our best IRS CD rates, we ranked products in the following categories and weighted each one as outlined in the percentages below:
- Average APY (60%): The most important factor when opening any type of CD is the annual percentage yield. We averaged out all the APYs available from each financial institution.
- Minimum deposit required (30%): Institutions with lower minimum requirements scored better on our list.
- Amount of term lengths available (10%): Institutions with more term length options scored higher.
Frequently asked questions
Who should use an IRA CD?
IRA CDs are ideal for more conservative investors who prefer tax advantages over high returns. They are especially suitable for those looking to preserve capital while still earning a modest, predictable return. If you’re nearing retirement and want to safeguard your savings, an IRA CD can be a solid strategic addition to your portfolio.
Can I transfer an IRA CD to another bank?
Yes, you can transfer an IRA CD to another bank, but the process requires certain documentation and careful handling to avoid tax penalties. First, contact your current and new financial institutions to manage the transfer smoothly.
Are IRA CDs a safe investment?
IRA CDs are considered a safe investment due to their fixed interest rates and tax benefits. Be sure to select a federally insured bank or credit union so your deposits are covered for up to $250,000 per depositor, per institution.
When should I get an IRA CD?
Consider getting an IRA CD if you’re seeking a low-risk, tax-advantaged way to grow your retirement savings or add that to a larger portfolio of different risk investments. They are particularly beneficial if you want a predictable return or are planning to retire within a few years.
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