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IRA CD Rates

January 21st, 2010

An IRA, individual retirement account, is a tax-deferred retirement account for individuals. You can setup an IRA in many different financial institutions such as a bank, a credit union, a brokerage, or an insurance company. There are big tax advantages to setting up IRAs and there are many different investment options for your retirement money. There are two main types of IRAs: Traditional and Roth.

The first step in finding an IRA is determining which type of IRA you need. You can contribute to a Roth IRA at any age, however you can only contribute to a Traditional IRA until the age of 70.5.

Roth IRAs also have income caps that change from year to year while traditional IRAs don’t have such caps.

Roth IRA distributions are tax free, but you don’t get a tax deduction when you put the money into them. Traditional IRAs on the other hand come with a tax deduction when you put the money in, but you when take money out of them its taxed as regular income. There are also penalties for taking money out of an IRA before the age of 59.5.

If you’re looking to invest in CDs for your IRA, be sure to shop around the best CD rate before committing your money to a particular financial institution. Search our site for IRA CD rates.

Use a CD calculator to figure out the interest you’ll earn on your IRA certificate of deposit. You may want to consider a CD laddering option for your IRA. A CD laddering option is more appropriate for handling your IRA during your retirement and doesn’t make much sense while you’re investing your money.

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