Best IRA CD Rates: Average 3.83% for September 2025

IRA CD Rate Trends

IRA CD rates saw substantial growth starting in 2022, largely driven by the Federal Reserve's aggressive rate hikes to combat inflation. As the Fed raised the federal funds rate—the benchmark for short-term interest rates—financial institutions responded by increasing yields on deposit accounts, including IRA CDs.

This upward trend made IRA CDs a much more attractive option for retirement savers seeking predictable, low-risk growth. That said, rates have softened slightly since late 2024, following three interest rate cuts by the Fed.

Among IRA CD providers, credit unions tend to offer much higher yields compared to banks. For more context, here's a look at recent IRA CD rate trends:

IRA CD Trends, 2024 to 2025

Learn more: What Is a CD?

How Much Can You Earn With an IRA CD?

Your earnings from an IRA CD will ultimately depend on your deposit amount, the term of the CD and its annual percentage yield (APY).

For example, if you were to deposit $10,000 into an IRA CD with a competitive rate of 3.83%, you'd earn $383 over the course of a year or $787.67 over two years. That's nearly eight times what you could earn from a CD with the national average rate.

Here's a quick comparison of what you could earn in just one year with the two different rates:

^*Source: Curinos, September 2025; based on annual compounding

How to Find the Best IRA CD

Choosing the right IRA CD is an important step in building a low-risk retirement savings strategy. While it may seem convenient to check with local banks and credit unions, doing a little homework could lead to significantly better long-term returns.

Here's how to make sure you find the best IRA CD for your financial goals:

• Compare APYs across institutions. IRA CD rates can vary widely depending on the provider. Credit unions often offer higher APYs than traditional banks due to their not-for-profit structure, but it's still important to cast a wide net when shopping around.
• Understand compounding frequency. Like regular CDs, IRA CDs compound interest on different schedules. More frequent compounding grows your savings faster, so be sure to check this detail when comparing options.
• Check minimum deposit and contribution rules. IRA CDs typically have minimum deposit requirements, which can range from $250 to $5,000 or more, though some may have no minimum at all. Also, keep in mind that annual IRA contribution limits apply—$7,000 in 2025, or $8,000 if you're 50 or older—so you'll need to coordinate your funding strategy accordingly.
• Confirm FDIC or NCUA insurance. Always make sure your IRA CD is held at an institution insured by the Federal Deposit Insurance Corp. (FDIC) or National Credit Union Administration (NCUA). These protections cover up to $250,000 per depositor, per institution and per ownership category, and help ensure your retirement savings are safe.
• Review early withdrawal penalties and tax implications. Withdrawing from an IRA CD before it matures may trigger an early withdrawal penalty from your institution. What's more, early withdrawals from an IRA may also result in taxes and a 10% IRS penalty if you're under the age of 59½. Make sure you're comfortable committing the funds for the full term of your CD.
• Put promotional APYs in context. Some financial institutions offer teaser rates to bring in new retirement account holders. These may look attractive upfront, but the rate can drop after a short period. Always confirm that the rate is fixed for the full CD term.

By taking the time to compare IRA CDs based on rate, risk and flexibility, you can grow your retirement savings more effectively and avoid costly surprises down the road.

Is Now a Good Time to Get an IRA CD?

Deciding whether to open an IRA CD right now depends on several personal and economic factors. Here are some key considerations to help you evaluate the timing:

• Your retirement strategy: IRA CDs are best suited for conservative investors looking for low-risk, steady growth within their retirement portfolio. If you're close to retirement or prefer stability over high returns, locking in a fixed rate now can help preserve your capital and generate predictable interest. On the other hand, younger investors with a longer time horizon may want to balance CDs with higher-growth assets.
• Interest rate environment: CD rates tend to follow moves by the Federal Reserve. If rates are currently high as they are in 2025, it may be a good opportunity to lock in favorable yields before they drop. But if you believe rates could rise further, you may consider short-term CDs or even a CD ladder strategy to get more flexibility.
• Liquidity needs: IRA CDs require you to keep your money tied up for a set term, and withdrawing early could result in penalties and tax consequences. Make sure you won't need access to these funds until the CD matures or until you're past age 59½ to avoid unexpected costs. If you anticipate needing cash sooner, consider keeping some retirement funds in more liquid investments.
• Other investments and savings: ​​An IRA CD shouldn't be your only retirement investment. Because it offers lower potential returns, it's best used alongside stocks, bonds and other assets to diversify your risk and improve long-term growth. If your current portfolio is heavily weighted toward volatile or aggressive investments, adding a CD could provide welcome stability.

Learn more: Retirement Planning Guide

Pros and Cons of IRA CDs

Before you open an IRA CD, carefully weigh the advantages and disadvantages, particularly in how they apply to your situation. Here are some to keep in mind.

Learn more: Types of CDs and How They Work

Alternatives to IRA CDs

While IRA CDs offer safety and predictability, they may not be the right fit for every retirement plan. Depending on your goals, risk tolerance and time horizon, one or more of these alternatives may offer better returns or flexibility:

• Money market mutual fund: Money market funds invest in short-term, low-risk securities and aim to maintain a stable net asset value. They tend to offer higher yields and greater liquidity, making them a flexible choice for conservative investors within an IRA. However, their returns can fluctuate with market conditions, and they may offer less predictability than a fixed-rate CD.
• Bond fund: Bond funds and exchange-traded funds can provide higher returns than CDs, especially in a rising rate environment. They come with a little more risk, but they also offer the potential for monthly income and portfolio diversification within your IRA. Keep in mind that bond returns aren't guaranteed, and they can lose value, particularly when interest rates rise or the market fluctuates.
• Treasury securities: U.S. Treasury bonds, bills and notes are backed by the federal government, offering strong safety and potentially better yields than IRA CDs. You can buy them directly or through mutual funds or ETFs in your IRA. However, their yields may still lag behind other investments, and longer-term Treasuries can tie up your funds for years with limited flexibility.
• Stocks and other higher-risk investments: Equities, real estate investment trusts and mutual funds carry higher risk but also the potential for significantly higher long-term returns. Younger or more aggressive investors may use these to grow their retirement accounts faster than they could with fixed-income products.

As you evaluate your options, it can help to consult with a financial advisor who can provide expert and personalized guidance for your retirement plan.

Learn more: How to Choose a Financial Advisor

Frequently Asked Questions

The Bottom Line

IRA CDs offer a unique blend of safety, predictability and steady growth, making them a solid option for conservative retirement savers. With high-yield IRA CDs offering much better APYs than the national average, they can deliver significantly better returns while protecting your principal through FDIC or NCUA insurance.

That said, they're not for everyone. IRA CDs are best suited for people who can leave their funds untouched for the entire term and who want to preserve capital without taking on market risk. Before opening an account, consider your time horizon, liquidity needs and how this investment fits within your broader retirement strategy.

By comparing rates, reviewing terms carefully and weighing alternatives, you can make a more informed decision and maximize your retirement earnings. If you're unsure where to start, consider working with a financial advisor to tailor your plan to your specific needs and goals.