Exploring the Pros and Cons of Opening a CD in Your IRA

Should You Open a CD in Your IRA?

You can invest your IRA funds in a CD. But should you? Read on to find out.

The Upside of CD in Your IRA

• High CD rates: CDs are currently paying up to 5%, offering risk-free interest.
• Tax benefits: IRA provides tax-deferred growth on CD interest, reducing immediate tax liabilities.

The Downside of CD in Your IRA

• Growth potential: CD returns may not match the long-term growth potential of stocks, affecting retirement savings.
• Age consideration: Tailor your IRA investments based on your proximity to retirement.

Ultimately, the decision to open a CD in your IRA should align with your financial goals and risk tolerance.