IRA Certificate of Deposit Rates

IRA CD rates are variable, as are all interest rates on any investment.  The amount will depend on the market, the prime rate, and what the bank or other institution feels is in its best interest to offer.  It is based on a number of factors, most of which they keep to themselves.  That being said, currently some IRA CDS are offering interest as high as 4.5%, though the more usual is around 3.5%, with a minimum deposit of $10,000 - $15,000 for a 30-month CD.  You may be able to earn more if you purchase a larger CD or one with a longer term.

An IRA CD is one of two things.  It can be any CD that you purchase with the funds invested in your IRA – Investment Retirement Account – and is therefore tied to this account.  It can also be a specific CD that your institute of choice has designed specifically to connect with IRA accounts.  It is worth your while to look into both types of investments.  You are best served by purchasing the CD with the highest interest rate.

While CDs have not always been marketed as a good retirement investment, they are of increasing value in today’s economy.  The first and most important reason for this is that CDs are FDIC – Federal Deposit Insurance Corporation – backed.  This means that they are insured by the government, so that regardless of what happens to a given bank, the investment is safe.  Most FDIC backed deposits are guaranteed up to $100,000 per institution, but quite often, in the case of retirement accounts, that limit goes up to $250,000.

These investment tools offer security in other ways as well.  These days security is being prized over the quick return.  While IRA CDs can be purchased with variable interest rates, as a rule the rate is fixed.  Meaning that even in the market rate drops, your rate will not change. 

Again, depending on the type of CD, you may even be able to keep that rate for a single rollover of your funds, Keep everything in the CD and just let it all rollover.  Furthermore, the fact of compound interest means that your interest earns interest on itself.  You can increase the amount you’re earning without lifting a finger.  With people waiting longer and longer to retire, by the time your IRA CD reaches maturity, this can be a substantial amount.