best IRA CD rates

I recently learned that my father has decided to cash out his UPS pension. The immediate question from my dad was, “How do I avoid paying taxes on this thing?”

After running through the various options in my head, I remembered something about my parents’ portfolio. My extremely risk-averse parents continue to keep nearly all of their money in a local savings account that earns a robust 0.05% APY. The most reasonable answer was, “Dad, roll your pension over to an IRA CD.”

What is an IRA CD?

An IRA CD is a certificate of deposit that is inside an IRA. A CD works like a savings account except that the money in the CD is locked up for the term of the CD in exchange for a higher interest rate. If you withdraw the money early you may pay a penalty that equals a predetermined amount of interest. For example, on a one-year CD, you typically pay three months of interest for withdrawing funds before the year is up.

You can buy CDs inside your IRA, which makes them IRA CDs. For CDs outside an IRA, here are the best rates.

The drawback of CDs is the penalty for early withdrawal. Since you’ll be buying them in your IRA, you likely have a much better idea of when you’ll need the money than, say, if you were using CDs in your emergency fund. With current interest rates, you can earn 5% or more guaranteed on your money. That’s not too bad.

The Best IRA CD Rates

What follows are some of the best IRA CD rates we could find. Keep in mind that the APY on a CD can change frequently, so be sure to confirm the rate with the bank before investing your money.

We’ll begin the list with a big-name bank, Discover, followed by popular online banks, Ally and Synchrony. From there, you’ll find the highest rates available as of April 1, 2024.

Bank or Credit UnionTermMinimum Deposit
Discover® Bank3 months to 10 years$2,500
Ally Bank3 months to 5 years$0
Synchrony Bank3 months to 60 months$0
Bellco Credit Union12 months$500
USAlliance Financial12 months$500
USAlliance Financial18 months$500
Department of Commerce FCU12 – 23 months$500
United States Senate FCU3 years$1,000
GTE Financial6 – 60 months$500
Northwest FCU5 years$1,000

Discover® Bank

Discover Bank

Discover Bank is the most recognizable name on our list and for many people that’s important. Choosing a bank that’s been around for decades can help people trust that their money is safe. The IRA CD rates here may not be the highest but they are certainly competitive. CDs are FDIC-insured.

Here’s a list of notable IRA CD rates from Discover:

  • 9-month CD – 4.25% APY
  • 12-month CD – 4.70% APY
  • 18-month CD – 4.40% APY
  • 24-month CD – 4.00% APY
  • 30-month CD – 3.75% APY
  • 3-year CD – 3.75% APY
  • 4-year CD – 3.75% APY
  • 5-year CD – 3.75% APY

Ally Bank

Ally Bank

Ally is a well-known online bank offering high-yield savings products including competitive rates on IRA CDs. CD terms range from 3 months to 5 years and there’s no minimum deposit to open an account. Accounts are FDIC-insured. Here are the highest IRA CD rates at Ally:

  • 9-month CD – 4.45% APY
  • 12-month CD – 4.50% APY
  • 18-month CD – 4.45% APY
  • 3-year CD – 4.00% APY
  • 5-year CD – 3.90% APY

Synchrony Bank

Synchrony Bank

Synchrony Bank is an online bank offering several IRA CD terms from 3 months to 60 months. There’s no minimum deposit needed to open an account. However, you can’t open an account online, instead, you’ll need to call Synchrony. You can find the number to call on Synchrony’s website. Accounts are FDIC-insured. Here’s a peek at some of the highest IRA CD rates from Synchrony:

  • 6-month – 4.40% APY
  • 9-month – 4.65% APY
  • 12-month – 4.80% APY
  • 15-month – 4.50% APY
  • 24-month – 4.20% APY

Bellco Credit Union

Bellco Credit Union

Bellco Credit Union offers easy membership for anyone. You can join the Bellco Foundation with a minimum donation of $10. From there, you can access IRA CDs and other financial products including checking, savings accounts, and credit cards. Bellco offers a great rate for a 12-month CD at 4.50% APY. The minimum deposit is $500. CDs are NCUA-insured.

USAlliance Financial

USAlliance Financial

USAlliance Financial is a credit union offering an easy way to join. You can become a member of the American Consumer Council with an $8 donation and then join USAlliance. You’ll find the best rate for a 12-month CD at USAlliance at 5.15% APY. You’ll also find the best rate for an 18-month CD here at 4.50% APY. The minimum deposit for both CDs is $500. CDs are NCIA-insured.

Department of Commerce FCU

Department of Commerce FCU

The Department of Commerce Federal Credit Union also offers easy membership through the American Consumer Council with an $8 donation. The Department of Commerce FCU provides the best rate for a 12-month to 23-month IRA CD at 5.02% APY. The minimum deposit is $500 and accounts are NCUA-insured.

United States Senate FCU

United States Senate Federal Credit Union

The United States Senate Federal Credit Union also offers membership through the American Consumer Council. You can even use a promo code found here to waive the $8 ACC membership fee. The United States Senate FCU offers the best rate for a 3-year CD at 4.08% APY with a $1,000 minimum deposit. Accounts are NCUA-insured.

GTE Financial

GTE Financial

Membership to GTE Financial is open to anyone who joins their CU Savers educational financial club with a $10 membership fee. You’ll find their best rate is for a 12-month CD at 5.12% APY at GTE Financial. The minimum deposit is $500 and accounts are NCUA-insured.

Northwest FCU

Northwest Federal Credit Union

Northwest Federal Credit Union offers easy membership through one of many community organizations. When you sign up online you can choose an organization to join, for example, The Humane Society of the United States. Northwest FCU offers the highest rate on a 5-year CD at 4.85% APY. The minimum deposit is $1,000 and accounts are NCUA-insured.

Pros and Cons of an IRA CD


  • Guaranteed interest
  • No risk of market losses


  • May earn less than the stock market, especially over long periods.
  • Funds are tied up for the full CD term
  • Early withdrawal penalties

How to Open an IRA CD

To open an IRA CD you will first have to open an IRA at the bank or credit union where you will be buying the CD. For example, let’s say you are going to buy a CD from USAlliance Financial. First, you would open an IRA at USAlliance (either traditional or Roth) and fund that IRA account.

You could fund it with the cash you have on hand (up to annual contribution limits) or roll over some money from an existing IRA. Note that there may be tax consequences if you move money from a Roth to a traditional IRA and vice versa.

Once your money is in an IRA at your desired bank you can use it to purchase a CD. Not all banks allow CD purchases inside an IRA so if you aren’t using a bank from this list be sure to ask before moving your money.

Read the terms carefully before you commit to a CD. Remember your funds will be held for the entire CD term. Choose a term you are comfortable with and know the early withdrawal penalty.

Is an IRA CD Tax Deductible?

A Roth IRA is not tax deductible. Any money you contribute is taxed when it’s earned but then grows tax-free. You do not pay taxes when you withdraw from a Roth IRA in retirement.

A traditional IRA works differently. With a traditional IRA, the money you contribute is tax deductible and it grows tax deferred. When you withdraw from a traditional IRA in retirement you’ll pay taxes on that amount. There are income limits for the deductibility and limitations on the contributions to IRAs of either type.

Are IRA CDs FDIC Insured?

All the banks and credit unions on this list provide FDIC or NCUA insurance. If the bank or credit union goes bankrupt the insurance will give you your money back. It is protected up to $250,000 per depositor at the institution.

Keep in mind, that if you have more than one account at the institution, the maximum amount you’re covered for is $250,000, even if your accounts total more than that. However, if you have IRA CDs at two different institutions that provide FDIC or NCUA insurance, you’ll be covered up to $250,000 at each institution.

The Bottom Line

If you are looking for a safe investment with a guaranteed rate of return, CDs might be just the thing. They earn competitive interest rates compared to regular savings accounts and, like a savings account, are insured.

While your long-term savings should likely be invested in the stock market, CDs provide a safe place to store some money that you will want access to over the shorter term.


  • Rob Berger

    Rob Berger is the founder of Dough Roller and the Dough Roller Money Podcast. A former securities law attorney and Forbes deputy editor, Rob is the author of the book Retire Before Mom and Dad. He educates independent investors on his YouTube channel and at