Have you spent years faithfully depositing money into an individual retirement account? How are you investing those dollars—are you letting them stagnate in an unexciting fund that perhaps you selected when you first opened the IRA, or are you militarizing them for a victorious retirement through intentional investments?
One of the most popular investments, thanks to its respectable return rates and risk-averse nature, is an IRA CD. With a bit of poking around, you can likely find terms above 4.00% annual percentage yield (APY).
Let’s consider our top picks for the current best IRA CDs and help you evaluate which one might best fit your financial goals.
Rates are accurate as of August 28, 2025 and are subject to change.
Editor’s Picks: Best IRA CDs of 2025
| Best for | Institution | CD term | APY | Minimum deposit | |
|---|---|---|---|---|---|
| High APY | Bread Financial | 6 months | 4.45% | $1,500 | View offer at Bread Financial |
| No minimum deposit | Discover | 6 months | 3.50% | $0 | View offer at Discover |
| Short term | Digital Federal Credit Union | 3 months | 4.00% | $500 | View offer at MoneyLion |
| Medium term | Northern Bank | 24 months | 3.50% | $500 | View offer at Northern Bank |
| Long term | Synchrony Bank | 60 months | 4.15% | $0 | View offer at Synchrony |
| High APY | View offer at Bread Financial |
|---|---|
| Institution | Bread Financial |
| CD term | 6 months |
| APY | 4.45% |
| Minimum deposit | $1,500 |
| No minimum deposit | View offer at Discover |
| Institution | Discover |
| CD term | 6 months |
| APY | 3.50% |
| Minimum deposit | $0 |
| Short term | View offer at MoneyLion |
| Institution | Digital Federal Credit Union |
| CD term | 3 months |
| APY | 4.00% |
| Minimum deposit | $500 |
| Medium term | View offer at Northern Bank |
| Institution | Northern Bank |
| CD term | 24 months |
| APY | 3.50% |
| Minimum deposit | $500 |
| Long term | View offer at Synchrony |
| Institution | Synchrony Bank |
| CD term | 60 months |
| APY | 4.15% |
| Minimum deposit | $0 |
Bank details reviewed August 28, 2025.
Best for a high APY
Bread Savings
| CD Term | 6 months |
| APY | 4.45% |
| Minimum deposit | $1,500 |
at Bread Financial
- Year Founded: 1996
- Company Headquarters: Columbus, OH
- CEO: Ralph Andretta
Bread Financial offers one of the highest return rates we’ve seen for an IRA CD in the current market. Its six-month term provides 4.45% APY, giving you a good balance of locking in a strong earning rate without too daunting a waiting period.
Details reviewed August 28, 2025.
Best for no minimum deposit
Discover Bank
| CD Term | 6 months |
| APY | 3.50% |
| Minimum deposit | $0 |
at Discover Bank
- Year Founded: 1985
- Company Headquarters: Riverwoods, IL
- CEO: Michael Shepherd
Placing your funds into a CD means you won’t be able to access that money for a while. Probably not a huge deal when it comes to IRA funds, since you’re planning ahead for retirement, but it’s still something to consider.
If you’re looking to park your money in a high-yield account but aren’t ready to tie up a huge sum where you can’t get to it early without paying a penalty, Discover IRA CDs are a good choice. With 3.50% APY and no minimum opening deposit, you can add as little or as much money as works for your budget.
Just keep in mind that CDs are the most worthwhile when you deposit a meaningful amount of money, as that lets you take more advantage of compounding interest.
Details reviewed August 28, 2025.
Best for a short term
Digital Federal Credit Union
| CD Term | 3 months |
| APY | 4.00% |
| Minimum deposit | $500 |
at MoneyLion
- Year Founded: 1979
- Company Headquarters: Marlborough, MA
- CEO: Shruti Miyashiro
It’s rare to find a short-term IRA CD with APY of 4.00% or more. That makes Digital Federal Credit Union’s three-month option an enticing prospect. Whether you’re apprehensive about the hands-off approach of a CD or you’re simply interested in building a lucrative CD ladder, this account is a great option.
Details reviewed August 28, 2025.
Best for a medium term
Northern Bank
| CD Term | 24 months |
| APY | 3.50% |
| Minimum deposit | $500 |
at Northern Bank Direct
- Year Founded: 1960
- Company Headquarters: Woburn, MA
- CEO: James Mawn Jr.
Northern Bank’s 24-month IRA CD is great for those comfortable with surrendering a portion of their IRA for a substantial amount of time. Allowing money in your IRA to gather dust in a CD may be easier than in a regular CD anyway, as you can’t access IRA funds for regular purchases until age 59½. If you’re ready to set and forget your investment for a couple years before thinking about reallocating those funds to something else within your retirement account, this term may be right for you.
Details reviewed August 28, 2025.
Best for a long term
Synchrony
| CD Term | 60 months |
| APY | 4.15% |
| Minimum deposit | $0 |
- Year Founded: 1932
- Company Headquarters: Stamford, CT
- CEO: Brian D. Doubles
You may wonder why it’s worth opening an IRA CD with a lengthy term when it’s often possible to earn higher APY on a shorter term (with the added benefit of accessing your money sooner free of the typical CD early withdrawal penalty).
Here’s the benefit: The longer your CD term, the longer you’ll lock in the current CD rates. True, many six-month IRA CDs offer more generous APYs; but by the time your account matures, those rates may be considerably lower, meaning you’d renew your CD for an inferior return.
Synchrony Bank’s 60-month IRA offers a fantastic 4.15% APY, guaranteeing a respectable return on your deposit for the next five years (no matter how crazy the market gets).
Details reviewed August 28, 2025.
CDs vs. IRAs: What’s the difference?
Certificates of deposit (CDs) and individual retirement accounts (IRAs) are completely different species of deposit accounts—but you can crossbreed them into a smart investment to grow your retirement savings.
Let’s start by noting that you generally can’t take distributions from your IRA penalty-free until you’re at least 59½. And, let’s also note that money in your IRA shouldn’t just be sitting there, it should be invested— in things like stocks, bonds, gold, real estate, and more.
You can also invest a portion of your retirement savings in a high-yield CD created specifically for IRA funds. These IRA CDs keep your money within the IRA “ecosystem” while giving you a safe, essentially effortless return for that retirement money you can’t spend anyway.
IRA CDs vs. stocks and mutual funds
You can deploy your IRA savings toward many different investments, from CDs to stocks to mutual funds. Each of these options comes with benefits and drawbacks.
The biggest advantage of a CD is consistency. Open an account, lock in a return rate for a specific amount of time, and forget about it. The market can spin into a tizzy, but you’ll continue to earn the same APY. But along with that reliability comes the incapacity to get outsized value for your money.
This is where stocks come in. Though it’s more risky, a swing in the market can give you an exponentially higher return than a CD. It can also devastate your balance if the market takes a turn for the worst. All to say, you should be at peace with a fluctuating return rate.
Mutual funds can be thought of as a sort of happy medium between these two options. They’re a bunch of stocks and/or bonds handled by professionals. While some mutual funds are more aggressive than others (and therefore more risky), their diversification typically makes them less treacherous than stocks, but with the potential for more upside than CDs.
When should I get an IRA CD?
If you’re considering an IRA CD, you should have a strategy for when to open it. It’s wise to pull the trigger when:
- Interest rates are high: Financial institutions routinely publish promotional APYs well above 4.00% for certain term lengths. If you see a godfather APY that you can’t refuse, it’s probably a good time to open an IRA CD.
- You’re nervous about market volatility: Your IRA should continually be growing. If you have little confidence in the stock market or other investments, an IRA CD is a safe option. The upside may be lower, but so is the risk.
- You’d prefer a more predictable return: Again, many investment options are affected by a fickle market. You may see huge gains one month and a slight loss the next. If you would rather know exactly how much your money will grow, an IRA CD is the answer.
A healthy IRA needs a mix of investments, so we’re not suggesting putting the entirety of your retirement savings in CDs. However, they’re a strong pick to hold a portion of your nest egg.
Is a Roth IRA eligible to hold CDs?
A Roth IRA is eligible to hold CDs, as is a traditional IRA. In many cases, the Roth account can be a better choice than a traditional.
With a traditional IRA, you pay no taxes upfront—but you’ll owe taxes on both your deposit and any interest you’ve earned when you take distributions. With a Roth IRA, you’re investing money that’s already been taxed, and your withdrawals (including all interest) are tax free. Plus, you have the option to withdraw your entire amount all at once at retirement without worrying about being bumped into a higher tax bracket.
How to build an IRA CD ladder
Building an IRA CD ladder is a straightforward process—but there is a bit of tact involved.
The idea behind a CD ladder is benefitting from high-APY certificates of deposit without tying a large portion of your money up at once. This involves opening multiple CDs with varying term lengths. For example, if you’d like to invest $10,000 of your IRA into CDs, you may 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. Each time an account matures, you can reinvest it into a 12-month CD to continue the rolling three-month maturity period. Or, you can invest it into something else that you suspect will be more profitable.
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Frequently asked questions
What are the contribution limits for IRA CDs?
The annual contribution limits for IRA CDs are the same as any IRA. The IRS limits those under age 50 to contributing a maximum of $7,000 of new money each year—and a maximum of $8,000 for those age 50 and above.
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).
Is there risk associated with IRA CDs?
IRA CDs aren’t “risky” in the same way that many other investments are. For example, you shouldn’t lose money in an IRA CD. The risk comes with comparatively lower upside to investments in, say, the stock market. You could be missing out on a higher return from other investment options. Your earnings in a CD may even be outpaced by inflation.
Can I transfer my IRA CDs to a different bank?
You can’t transfer your actual IRA CD (along with its unique terms and APY) to a different bank. However, once your IRA CD matures, you can use those funds to open an IRA CD with another bank.
Do IRA CDs have early withdrawal penalties?
IRA CDs have early withdrawal penalties just like a regular CD. Plus, if you take distribution of the funds (in other words, you withdraw it from your IRA) before age 59½, you’ll be dinged with a 10% early withdrawal penalty as imposed by the IRS.
Are IRA CDs tax deductible?
IRA CDs aren’t tax deductible. In some cases, the new money you contribute to an IRA may be tax deductible, but that has nothing to do with the CD itself.
What happens when an IRA CD matures?
You may be able to set your IRA CD to automatically roll into a new CD when it matures. Otherwise, you may receive a distribution check that you’ll want to roll over and reinvest in an eligible retirement account before 60 days have passed so as to avoid a penalty from the IRS. Also note that, in general, IRA rollovers are limited to one per year.