For many years, have you consistently contributed funds to an individual retirement account? How are you deploying those funds—are they sitting idle in a lackluster investment you might have chosen when your IRA was initially established, or are you strategically preparing them for a successful retirement by Deliberate investments?
TL;DR
- IRA CDs offer a low-risk way to save for retirement with predictable returns.
- Bread Financial offers a 6-month IRA CD with a 4.20% APY for high yields.
- Ally Bank provides a 6-month IRA CD with no minimum deposit and a 3.90% APY.
- Synchrony Bank offers a 60-month IRA CD with a 4.00% APY for extended periods.
One of the most popular investments, thanks to its respectable return rates and risk-averse nature, is an IRA CD. By investigating a little, you'll probably discover rates exceeding 4.00% annual percentage yield (APY).
We'll look at our top choices for the best IRA CDs right now and help you figure out which one aligns best with your financial objectives.
Current rates are valid as of November 4, 2025 and may be altered.
Top IRA CDs for 2025
| Best for | Institution | CD term | APY | Minimum deposit | |
|---|---|---|---|---|---|
| High APY | Bread Financial | 6 months | 4.20% | $1,500 | View offer at Bread Financial |
| No minimum deposit | Ally Bank | 6 months | 3.90% | $0 | View offer at MoneyLion |
| Short term | Digital Federal Credit Union | 3 months | 3.75% | $500 | View offer at MoneyLion |
| Medium term | Northern Bank | 24 months | 3.25% | $500 | View offer at Northern Bank |
| Long term | Synchrony Bank | 60 months | 4.00% | $0 | View offer at Synchrony |
| High APY | View offer at Bread Financial |
|---|---|
| Institution | Bread Financial |
| CD term | 6 months |
| APY | 4.20% |
| Minimum deposit | $1,500 |
| No minimum deposit | View offer at MoneyLion |
| Institution | Ally Bank |
| CD term | 6 months |
| APY | 3.90% |
| Minimum deposit | $0 |
| Short term | View offer at MoneyLion |
| Institution | Digital Federal Credit Union |
| CD term | 3 months |
| APY | 3.75% |
| Minimum deposit | $500 |
| Medium term | View offer at Northern Bank |
| Institution | Northern Bank |
| CD term | 24 months |
| APY | 3.25% |
| Minimum deposit | $500 |
| Long term | View offer at Synchrony |
| Institution | Synchrony Bank |
| CD term | 60 months |
| APY | 4.00% |
| Minimum deposit | $0 |
Bank details reviewed November 4, 2025.
Optimal for a high annual percentage yield
Bread's Savings
| CD Term | 6 months |
| APY | 4.20% |
| Minimum deposit | $1,500 |
at Bread Financial
- Year Founded: 1996
- Company Headquarters: Columbus, OH
- CEO: Ralph Andretta
Bread Financial provides one of the top return percentages we've encountered for an IRA CD in today's market. Its six-month term provides 4.20% APY, giving you a good balance of locking in a strong earning rate without too daunting a waiting period.
Details reviewed November 4, 2025.
Ideal for accounts with no minimum deposit requirement
Ally Bank
| CD Term | 6 months |
| APY | 3.90% |
| Minimum deposit | $0 |
at MoneyLion
- Year Founded: 1919
- Company Headquarters: Detroit, Michigan
- CEO: Michael Rhodes
at MoneyLion
When you put your money into a CD, you're agreeing not to touch it for a set period. While it might not be a major concern for IRA funds, given your retirement planning, it's still a point worth thinking about.
For those seeking to deposit funds into an account offering a high yield, without committing a substantial amount that would incur penalties for early withdrawal, Ally IRA CDs present a suitable option. Ally's six-month IRA CD offers a 3.90% APY with no minimum opening deposit, allowing you to contribute any amount that fits your budget.
It's important to remember that Certificates of Deposit (CDs) offer the greatest benefit when you invest a substantial sum, as this allows you to maximize the advantages of compound interest.
Details reviewed November 4, 2025.
Ideal for a brief period
DCU
| CD Term | 3 months |
| APY | 3.75% |
| Minimum deposit | $500 |
- Year Founded: 1979
- Company Headquarters: Marlborough, MA
- CEO: Shruti Miyashiro
Finding a short-term IRA CD that offers an APY of 4.00% or higher is uncommon. The three-month option from Digital Federal Credit Union presents an appealing choice. This account presents a compelling choice, whether you're hesitant about the passive nature of a CD or keen on constructing a profitable CD ladder.
Details reviewed November 4, 2025.
Suitable for intermediate durations
North Bank
| CD Term | 24 months |
| APY | 3.25% |
| Minimum deposit | $500 |
at Northern Bank Direct
- Year Founded: 1960
- Company Headquarters: Woburn, MA
- CEO: James Mawn Jr.
For individuals willing to commit a portion of their IRA for a significant duration, Northern Bank's 24-month IRA CD presents an excellent option. It might be simpler to let funds in your IRA sit in a CD than in a standard CD, considering you're unable to use IRA money for everyday purchases until you reach 59½ years old. If you're prepared to make an investment and leave it untouched for a couple of years before considering moving those funds to another option within your retirement account, this period might be suitable.
Details reviewed November 4, 2025.
Ideal for extended periods
Synchrony
| CD Term | 60 months |
| APY | 4.00% |
| Minimum deposit | $0 |
at Bankrate
- Year Founded: 1932
- Company Headquarters: Stamford, CT
- CEO: Brian D. Doubles
You might question the value of opening an IRA CD with an extended term, especially when shorter terms frequently offer superior APY, along with the advantage of earlier, penalty-free access to your funds, unlike typical CD early withdrawal penalties. Penalty for early withdrawal).
The advantage is that a longer CD term allows you to secure current CD rates for an extended period. While many six-month IRA CDs provide higher Annual Percentage Yields (APYs), by the maturity date, those rates could be significantly reduced, leading to a renewal of your CD at a less favorable return.
With Synchrony Bank's 60-month IRA, you'll receive an impressive 4.00% APY, ensuring a solid return on your investment for the upcoming five years, irrespective of market volatility.
Details reviewed November 4, 2025.
CDs versus IRAs: What distinguishes them?
While certificates of deposit (CDs) and individual retirement accounts (IRAs) are distinct types of deposit accounts, combining them can create an intelligent strategy for enhancing your retirement nest egg.
Generally, you can't withdraw funds from your IRA without penalty before reaching the age of 59½. Furthermore, funds within your IRA ought to be actively invested rather than idle, encompassing assets such as stocks, bonds, gold, real estate, and other investment vehicles.
A portion of your retirement savings can also be allocated to a high-yield CD designed exclusively for IRA funds. These IRA CDs ensure your funds remain within the IRA “ecosystem”, offering a secure and largely hands-off return on retirement funds you're unable to access for spending.
IRA CDs versus stocks and mutual funds
Your IRA savings can be used for a variety of investments, including CDs, stocks, and mutual funds. Every choice presents advantages and disadvantages.
A CD's primary benefit is its uniformity. Establish an account, secure a return rate for a set duration, and then cease to worry about it. Even if the market becomes chaotic, your APY will remain unchanged. However, this dependability also means you can't achieve exceptional value for your expenditure.
Stocks are the solution. A market swing, while riskier, can yield exponentially greater returns compared to a CD. A market downturn could also severely impact your financial stability. In essence, you should feel comfortable with a variable rate of return.
Mutual funds represent a middle ground between these two choices. These are various stocks and/or bonds managed by experts. Although certain mutual funds carry higher risk due to their aggressive nature, their diversified holdings generally render them safer than individual stocks, while offering greater potential returns than Certificates of Deposit.
An IRA CD is a Certificate of Deposit held within an Individual Retirement Account. These accounts offer a fixed interest rate for a set term, providing a predictable return on your investment. You might consider an IRA CD if you're looking for a low-risk way to save for retirement and want to lock in a guaranteed interest rate. They're often suitable for more conservative investors who prioritize capital preservation and steady growth over potentially higher, but riskier, returns.
If you're thinking about an IRA CD, you ought to have a plan for when to open it. It's a good idea to act when:
- Interest rates are high: Financial institutions routinely publish promotional APYs well above 4.00% for certain term lengths. When presented with an irresistible "godfather" APY, it's likely an opportune moment to establish an IRA CD.
- You’re nervous about market volatility: Your IRA should continually be growing. For those uncertain about the stock market or other investments, an IRA CD presents a secure choice. While the potential gains might be smaller, the associated dangers are also reduced.
- You’d prefer a more predictable return: Again, many investment options are affected by a fickle market. You might experience substantial increases one month followed by a minor decrease the subsequent month. An IRA CD is the ideal choice if you prefer to know the precise amount your money will increase.
To ensure a robust IRA, a variety of investments is essential, which is why we don't advise allocating all your retirement funds to CDs. Still, they represent a solid choice for a segment of your retirement savings.
Can a Roth IRA invest in Certificates of Deposit (CDs)?
CDs can be held within a Roth IRA, just as they can in a traditional IRA. Often, the Roth option presents a superior selection compared to the traditional one.
With a traditional IRA, taxes aren't paid initially; however, you'll be liable for taxes on both your contributions and any accumulated interest when you withdraw funds. When you use a Roth IRA, you're putting in money that has already been taxed, and any money you take out later, including all the interest earned, won't be taxed. You also have the flexibility to take out your full sum in one go when you retire, without concern for being pushed into a higher tax bracket.
Creating an IRA CD ladder
Constructing an IRA CD ladder is a simple procedure, though it requires a degree of finesse.
A CD ladder strategy allows you to take advantage of high-APY certificates of deposit while avoiding locking up a significant amount of your funds simultaneously. This entails establishing several Certificates of Deposit with different maturity dates. If you're looking to invest $10,000 from your IRA into CDs, you can deposit:
- $2,500 into a 3-month IRA CD
- $2,500 into a 6-month IRA CD
- $2,500 into a 9-month IRA CD
- $2,500 into a 12-month IRA CD
This way, a $2,500 of your $10,000 investment will become available penalty-free every three months. When an account reaches its maturity date, you have the option to reinvest it in a 12-month CD, thereby maintaining the ongoing three-month maturity cycle. Alternatively, you could invest it in an asset you believe will yield greater returns.
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Commonly posed questions
Contribution limits for IRA CDs are the same as for other IRA investments.
IRA CD annual contribution limits mirror those of any standard IRA. Individuals younger than 50 can deposit no more than $7,000 annually, while those aged 50 and older have a limit of $8,000.
However, you can deposit as much of your existing IRA funds as you like into an IRA CD (pending any CD limits enforced by the financial institution).
Are there any risks connected with IRA CDs?
IRA CDs aren’t “risky” in the same way that many other investments are. You shouldn't experience any financial loss with an IRA CD. The danger lies in the comparatively reduced potential gains from investments, for instance, in stocks. Alternative investments might offer you a greater yield. Inflation might even surpass the earnings you get from a CD.
Is it possible to move my IRA CDs to another financial institution?
You're unable to move your existing IRA CD, including its specific conditions and Annual Percentage Yield (APY), to another financial institution. Upon the maturity of your IRA CD, you're free to utilize those funds for establishing a new IRA CD at a different financial institution.
Yes, IRA CDs typically incur early withdrawal penalties.
IRA CDs are subject to early withdrawal penalties, similar to standard CDs. If you take possession of the funds (meaning, you take it out of your IRA) prior to turning 59½, you'll face a 10% penalty for early withdrawal, as mandated by the IRS.
No, IRA CDs aren't tax deductible.
Contributions to IRA CDs are not eligible for tax deductions. The tax deductibility of new funds deposited into an IRA is separate from the CD's own characteristics.
When an IRA CD reaches its maturity date, you have several options for what to do with the funds.
Your IRA CD might be configured to automatically renew into a new CD upon its maturity date. To avoid an IRS penalty, you'll want to roll over and reinvest any distribution check into an eligible retirement account within 60 days. Generally, IRAs permit only one rollover per year.