Did you know that IRAs can hold CDs (Certificates of Deposit)? If you are nearing retirement and are tired of fretting over your nest egg, your highest and safest return may be with a federally insured bank (FDIC) or credit union (NCUA) CD.
Although many brokers offer CDs for IRAs, the interest rates available are generally much lower than what you can find direct. You may have to do a little more searching and a little more work up front but you could earn $500 - $1000 more each year.
Direct IRA CDs also have other advantages. First, you are in complete control of the funds. The CD is opened up under your title and social security number. You are not just a numbered account at the bank. Secondly, some banks waive early withdrawal penalties on IRA CDs. As a result, if your "Best" rate is no longer the best, you may be able to move your funds to another IRA CD with a higher interest rate.
There are free sources of rates such as Bankrate.com and fee based services such as ours that call banks and credit unions looking for high rates. You can also search the internet using one of the three main search engines such as Google, MSN, or Yahoo. Each of them has a search bar where you can type certain key words such as "best ira cd rates" or "best ira certificate of deposit rates".
Finally, as of April 1, 2006, the FDIC (banks) and NCUA (credit unions) raised the insurance limit for IRAs to $250,000 per institution. Now you can put even more of your funds at the same bank or credit union with the high rate. How can it get any better? Best Rate, Best Service, Flexibility, & Control.
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