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IRA CDs might be a good option if you expect to retire in a few years and want a safe place to grow money. IRA certificates of deposit let you invest your money with a guaranteed rate of return, ideal for people who are close to reaching retirement age.
An IRA CD is a type of retirement account that invests your money in a certificate of deposit (CD). When you open a regular CD, you're putting away money for the near future — with an IRA CD, your CD is part of your long-term retirement savings strategy.
Best IRA CD Rates
- Alliant Credit Union IRA Certificate: 4.30% to 5.15% APY
- Synchrony IRA CD: 2.25 to 5.10% APY
- Ally IRA High Yield CD: 2.55% to 5.00% APY
- Discover IRA CD : 2.00% to 5.00% APY
- Ally IRA Raise Your Rate CD: 3.75% APY
Below, are our picks for IRA CDs. We know "best" means something different for everyone, so we've listed each bank's strengths, as well as its limitations.
Compare the Best IRA CDs
IRA CD FAQs
An IRA CD is a type of retirement account that invests your funds in a CD. When you open a regular CD, your CD acts as a savings account — with an IRA CD, your CD acts as an investment account. The best online brokerages allow you to choose between a traditional and Roth IRA CD, and some (such as Ally) offer SEP IRAs. An IRA CD follows most of the same rules as any other IRA. You're limited to a certain amount in contributions per year, and you'll pay the usual taxes and penalties for early withdrawals that you would with any other traditional, Roth, or SEP IRA.
The main advantages of opening an IRA CD is that it's a good option if you're looking for a safe investment strategy, and if you're only a few years from retirement. You'll also have the guaranteed rate of return that comes with CDs and the tax benefits that come with IRAs
An IRA CD is not a good match for anyone wanting to take risks with investments. If you're young, you probably have time to take riskier investments that will earn you more in the long run. You're also limited to how much you can contribute to an IRA annually, and if you need access to the funds before the IRA matures, you could pay considerable penalties
Withdrawing early from an IRA CD can result in a double penalty. If you withdraw funds before your CD term ends, you'll pay the bank's early withdrawal penalties. If you withdraw money before age 59 1/2, you'll pay the usual 10% penalty you'd pay for early withdrawals from any type of IRA, as well as taxes. There are certain exceptions to this rule, and there are other things to take into consideration, such as whether you've had a Roth IRA for at least five years. If you withdraw before the CD term ends and before age 59 1/2, you'll pay both penalties.
IRA CD Reviews
Alliant Credit Union IRA Certificate
You can open a Traditional, Roth, or SEP IRA CD with Alliant. It's easier to become a member of Alliant than it is with many credit unions.
Minimum opening deposit: $1,000
Term options: 1 to 5 years
Early withdrawal penalties: When you withdraw funds from your IRA CD before it matures, Alliant charges you the interest earned for the number of days the account has been open, as follows:
- Up to 90 days for terms of 12 to 17 months
- Up to 120 days for terms of 18 to 23 months
- Up to 180 days for terms of 24 months or more
- 7 days during the 7-day grace period for new IRA CDs
What to look out for: Alliant's shortest term is one year. If you're looking for shorter-term IRA CDs, you may prefer a different institution.
You can open a Traditional IRA or Roth IRA with Synchrony. Its most competitive rate is for 5-year CDs.
Minimum opening deposit: $0
Term options: 3 months to 5 years
Early withdrawal penalties: Synchrony offers standard penalties for early withdrawals of your principal balance, as follows:
- 90 days interest penalty for a CD term of under 12 months
- 180 days interest penalty for a CD term of 12 months to 48 months
- 365 days interest penalty for a CD term of more than 48 months
What to look out for: Although Synchrony has a variety of term lengths overall, you can find ones longer than 5 years elsewhere. The minimum opening deposit is also a bit steep at $2,000. If you'd like to open a CD for less, you may want consider one of the other options on our list.
Discover IRA CD
Discover has IRA CDs with terms up to 10 years, and certificates are available as Traditional or Roth IRAs.
Minimum opening deposit: $2,500
Term options: 3 months to 10 years
Early withdrawal penalties: The penalties for early withdrawal are as follows:
- 3 months interest penalty for a CD term of under 1 year
- 6 months interest penalty for a CD term of 1 year to under 4 years
- 9 months interest penalty for a CD term of 4 years to under 5 years
- 18 months interest for a CD term of 5 years to under 7 years
- 24 months interest for a CD term of 7 years to 10 years
What to look out for: You'll need at least $2,500 to open an IRA CD with Discover. IRA CDs with terms of five years or longer have higher early withdrawal penalties than competing banks.
Ally IRA High Yield CD and Ally IRA Raise Your Rate CD
Ally offers two types of IRA CDs: Ally IRA High Yield CD and Ally IRA Raise Your Rate CD. High Yield CDs lock in your rate for the entire term, but with Raise Your Rate CDs, you have the option to increase your APY (Annual Percentage Yield) if Ally's rates go up. You can increase your APY once during a 2-term and twice during a 4-year term.
All Ally IRA CDs are available as SEP, Traditional, or Roth IRAs. It's one of the few banks that allows you to open an IRA CD with no minimum deposit, and its early withdrawal penalties are lower than most competitors' penalties.
Minimum opening deposit: $0
Term options: 3 months to 5 years
Early withdrawal penalties: Ally offers standard penalties for early withdrawals of your principal balance, as follows:
- 60 days interest penalty for a CD term of 24 months or less
- 90 days interest penalty for a CD term of 25 months to 36 months
- 120 days interest penalty for a CD term of 37 months to 48 months
- 150 days interest penalty for a CD term of 49 months or more
What to look out for: The Ally IRA Raise Your Rate CD only come with 2-year and 4-year terms, and the Ally IRA High Yield CD doesn't include 2-year or 4-year terms.
Other IRA CDs We Considered
- Air Force Federal Credit Union Share Certificate: Active Air Force members, veterans, and family members can earn respectable rates with AFFCU, but you'll need at least $1,000 to open an IRA CD, and at least $2,500 for a 5-year or 7-year term.
- SchoolsFirst Federal Credit Union Share Certificate: You'll earn a high APY with an opening deposit of only $500, but SchoolsFirst IRA CDs are limited to residents of Southern California.
- VyStar Credit Union: This credit union provides solid rates for residents of certain parts of Florida and Georgia.
- Connexus Credit Union: Connexus' rates are respectable, but it only compounds your interest once per quarter.
- Signature Federal Credit Union IRA Certificate: Signature can be a good option if you want a credit union rather than a bank, but it compounds interest monthly, not daily.
Bank Trustworthiness and BBB Ratings
None of the banks on our list have any recent public scandals.
The Better Business Bureau grades companies based on responses to customer complaints, honesty in advertising, and transparency about business practices. Here are the BBB scores for our top picks:
| Institution | BBB grade |
| Ally | A |
| Discover | A+ |
| Synchrony | A+ |
| Alliant Credit Union | A+ |
Ally received an A rating from the BBB because it has three unresolved complaints.
A strong BBB score doesn't guarantee you'll have a smooth experience with a bank, though. Ask people you know for recommendations and read online reviews for more insights on whether a bank would be a good fit.
Synchrony has been involved in a few public controversies. In 2023, Synchrony was required to pay $2.6 million in a settlement when accused of calling customers about bank accounts they didn't have. In 2021, the bank also was required to pay $3.5 million in a settlement when accused of making unreasonable phone calls to debtors living in California.
Why You Should Trust Us: Experts' Advice on Choosing the Best IRA CDs
We consulted banking and financial planning experts to inform these picks and provide their advice on finding the best CDs to use for your money. You can read their insights at the bottom of this post.
Here's what they had to say about CDs. (Some text may be lightly edited for clarity.)
How can someone determine whether a bank is the right fit for them?
Tania Brown, certified financial planner at SaverLife:
"Obviously, you want to make sure it's FDIC insured. Also, your banking experience — do you like walking into a bank? Well, then you need someone local. Do you just not care if you ever see your bank? Then you're okay online. Do you write checks? Do you not write checks? So it's thinking through how your experience with it is going to be before you make that decision."
Sophia Acevedo, certified educator in personal finance, banking reporter, Personal Finance Insider:
"I would create a list of what I prioritize most in a bank account. For example, some banks have accounts that charge monthly service fees. I would look to see what the requirements are for waiving the monthly service fee and whether I think I could feasibly meet those requirements each month. If I'm searching for an interest-earning bank account I'll pay attention to interest rates. I would make sure the account pays a higher interest rate than the average bank account."
What makes a CD good or not good?
Mykail James, MBA, certified financial education instructor, BoujieBudgets.com:
"You always want to look at how much money you need to start up. And then if you can continuously add money in. Also, check not just what the interest rate is, but how often they pay out interest, whether it's monthly or quarterly."
Sophia Acevedo, CEPF:
"CDs could be worthwhile if you don't need access to some of your money, since they have a fixed interest rate for a specific term. I would look at current CD rates and see how they stack up to other types of savings accounts."
How should someone choose a CD term length?
Roger Ma, certified financial planner with lifelaidout® and author of "Work Your Money, Not Your Life":
"I would think about when you need the money and then compare that with what the prevailing CD rates are, and then what makes sense from a financial perspective, but also from your own personal timing perspective."
Mykail James, CFEI:
"I believe in having a plan for whatever the funds are. If it's supposed to be a house fund, and you want to wait for another two years to buy a house, that's what you should be thinking of when you want to have this money."
Our Methodology: How We Chose the Best IRA CDs
Personal Finance Insider's mission is to help smart people make the best decisions with their money. We understand that "best" is often subjective, so in addition to highlighting the clear benefits of a financial product or account — a high APY, for example — we outline the limitations, too. We spent hours comparing and contrasting the features and fine print of various products so you don't have to.
We reviewed over a dozen institutions to identify the strongest options using our CD rates methodology. Through our research, we've found that the best banks for IRA CDs pay high rates, offer a variety of IRA CD terms, and don't charge maintenance fees.
While interest rates are an important aspect of any online bank account, several offer the same annual percentage yields (APYs). To differentiate between them, we also considered minimum deposit and balance requirements, mobile apps, and other standout features.
Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any card issuer. Read our editorial standards.
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