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The best IRA CD rates for April 2022
IRA certificates 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 getting close to retirement age.
A good IRA CD should offer competitive interest rates and a term length that matches your needs. It also shouldn’t charge monthly service fees or require a high minimum balance.
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.
Learn more about our top picks:
Ally IRA High Yield CD and Ally IRA Raise Your Rate CD
Why it stands out: Ally offers two types of IRA CDs:
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: Ally offers a total of nine different IRA CD term lengths, ranging from 3 months to 5 years.
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
Discover IRA CD
Why it stands out: 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: Discover offers CD term lengths ranging from 3 months to 10 years.
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.
Synchrony IRA CD
Why it stands out: 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: Synchrony offers IRA CDs with rates ranging from 3 months to 5 years.
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.
Alliant Credit Union IRA Certificate
Why it stands out: 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: Alliant term lengths range from 1 to 5 years.
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.
Other IRA CDs that didn’t make the cut and why:
Navy Federal Credit Union Standard Certificate : You can earn high rates on your IRA CDs, but you must have at least $1,000 to open an account. (Member FDIC)Air Force Federal Credit Union IRA 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 Credit Union IRA 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 Certificate of Deposit : This credit union provides solid rates for residents of certain parts of Florida and Georgia.Connexus Credit Union Share Certificate : 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.
Are these banks trustworthy?
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 | C |
| Discover | A+ |
| Synchrony | A+ |
| Alliant Credit Union | A+ |
The BBB cites the high number of customer complaints for Ally’s C grade.
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.
Frequently asked questions:
Why trust our recommendations?
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.
What is an IRA CD?
An IRA CD is a type of retirement account that invests your funds in a certificate of deposit (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.
Most banks 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.
This means you’ll contribute after-tax dollars to a Roth IRA CD, and you won’t pay taxes when you withdraw money. For a Traditional IRA CD and SEP IRA CD, you’ll typically contribute money before taxes are taken out, then pay income tax on withdrawals.
Generally, your retirement savings strategy should change as you approach retirement. If you have a significant number of years left to invest, you’ll likely want to take on more investing risk than an IRA CD can provide. If you’re retiring in the next few years, however, an IRA CD can be a less-risky option for investing with a guaranteed rate of return.
How did we choose our top IRA CD rates?
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.
We reviewed over a dozen institutions to identify the strongest options. We also cross-referenced our list against popular comparison sites like Bankrate and NerdWallet to make sure we didn’t miss a thing.
What are the pros and cons of opening an IRA CD?
Here are some pros of opening an IRA CD:
- It’s a good option if you are looking for a safe investment strategy
- It may appeal to you if you’re only a few years from retirement
- You’ll have the guaranteed rate of return that comes with CDs and the tax benefits that come with IRAs
- You don’t have to pay brokerage fees
Here are the cons of opening an IRA CD:
- It’s 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 limited to how much you can contribute to an IRA annually
- If you need access to the funds before the IRA matures, you could pay considerable penalties
What are the penalties for withdrawing early from an IRA CD?
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.
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