Discover Bank’s IRA CD

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Discover Bank is offering a 12-month IRA CD for 1.00% APY and a 10-year IRA CD for 2.45%.

A great retirement investing alternative that not many people have heard about is the IRA CD. That would be a CD inside of a Roth or Traditional IRA. With this approach, you get the security of a CD with the tax-advantages of an IRA.  As a reminder, an IRA is a tax-advantaged retirement account which you use to hold investments, like a stock, bond, or in this case, a CD. A CD is, of course, a certificate of deposit, which is a deposit product with a fixed term and rate. They are also FDIC insured.

Discover Bank is currently the only bank that I know of offering an IRA CD. Their IRA CDs range anywhere from 3 months to 10 years. Click below see current rates:

• Discover Bank 12-month IRA CD
• All Discover Bank IRA CDs

So, who should consider an IRA CD?  Ultimately, you need to be making your investment decisions. There is no one-size fits all investment plan. But generally speaking, here’s who should consider an IRA CD:

• CD investors that want to pay less in taxes.
• Retirement investors who want an alternative to their MMF to meet their cash asset-class requirements.
• Beginning investors who want to start an IRA but don’t know about other investment asset classes.

I have faith in the American business for the long-term. For this reason, and being the young guy that I am, I stay with domestic stocks for a large percentage of my portfolio.

But with the economy still on shaky ground, and some discussing another possible market crash, some investors may be looking for a safe, secure place to continue investing for retirement.  This approach makes sense for a lot of people. If you’re looking to preserve capital (i.e. keep your retirement money safe), the typical places to turn include a money market fund within your retirement account, or a simple CD or savings account.

MMFs don’t have FDIC Insurance or a return on your money, and CDs outside of an IRA aren’t able to achieve extra tax savings. The IRA CD brings them both together. Learn more about IRA CDs by visiting www.DiscoverBank.com.

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