Though certificate of deposit accounts do not allow you to access your funds before the maturity date, you may move your money from one account to another once the term is over in what is known as a CD rollover. The same is true when it comes to an IRA CD Rollover.
If you hold a CD in an IRA account, you may choose to move the money in your CD to a different IRA CD account once it matures. Withdrawing money from one retirement account (like an IRA) and depositing it into another is known as a rollover.
How an IRA CD Rollover Works
A rollover between IRAs is different than a simple transfer and subject to a separate set of rules. When you transfer funds, they are moved straight from the IRA or similar retirement account and into the next by whichever financial institution holds the accounts. You never touch the money and can make as many transfers as you want.
A rollover, however, involves the funds being distributed to you. You must then decide which account you will deposit them into. Since you handle the money, you have to re-deposit it according to specific rules and not spend a dime, or else you will face severe tax consequences.
IRA CD Rollover Rules
If you are going to rollover a certificate of deposit from one IRA into another, be sure you understand the rules so you are not penalized:
- Once you receive the funds, you have 60 days to roll them over into a new account.
- Only one rollover is permitted ever 365 days
- You cannot rollover an IRA CD before the account matures without facing early withdrawal penalties.
These rules are meant to help you understand how to rollover an IRA CD. If you have any questions or doubts about the process, it is advisable you speak with a financial professional before making any changes to your existing IRA CD.