Picking the best strategy for retirement savings can seem like a challenging process. Roth IRAs (Individual Retirement Accounts) and CDs (Certificates of Deposit) are two common options for retirement savings that many individuals utilize in their financial planning.
Determine which option to choose by taking a look at the benefits and limitations of each.
A CD is a financial product that allows your money to grow for a pre-determined length of time. CDs are generally offered for terms ranging from three months to five years. Longer-term CDs usually earn a higher interest rate because of how long the money sits in your account.
Some benefits of a CD include:
A Roth IRA is a retirement account that allows you to make post-tax contributions and experience tax-free withdrawals once you hit retirement age.
Benefits of Roth IRAs include:
When saving for retirement, diversification of your financial portfolio can help you save more money. Roth IRA CDs offer the best features of both CDs and Roth IRAs.
Your contributions to a Roth IRA can placed into CDs, giving the benefits of a CD combined with those of a Roth IRA.
Synchrony Bank offers award-winning deposit products to help you grow your savings. We offer customers 24/7 online access, award-winning customer service, and other perks, including free identify theft resolution. FDIC insures our customers up to $250,000, per depositor, for each ownership category.
Synchrony Bank does not provide tax advice so be sure to contact your tax advisor or financial consultant before opening or contributing to an IRA.
*ANNUAL PERCENTAGE YIELD (APY): All APYs are accurate as of .
APYs are subject to change at any time without notice. Offers apply to personal accounts only. Fees may reduce earnings. For Money Market and High Yield Savings Accounts, the rate may change after the account is opened. For CDs, a minimum of $2,000 is required to open a CD and must be deposited in a single transaction. A penalty may be imposed for early withdrawals. After maturity, if you choose to roll over your CD, you will earn the base rate of interest in effect at that time. The APY shown for CDs and IRA CDs is for a 60-month CD with a balance of at least $25,000. Click here for all CD rates and terms offered.