Can a IRA be rolled over into CD's without being taxed or pentalized?

Answer 1

Maybe, if your IRA is at a bank. But why would you want to do this? having your money in cash accounts only guarantees that over the long run you are going to lose money to taxes and inflation. Instead you should be invested in a balance of stocks, bonds and cash that is appropriate for your age and risk tolerance.

If you are not sure about how to figure out your asset allocation, there are a TON of financial calculators out there you can use or you can call 1-800-vanguard for advice. Just don't invest through a bank.

Good luck!

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Answer 2

CD IRA's are offered by banks. If you have an IRA at a mutual fund company and want to transfer it to a bank IRA or a self directed IRA that allows CD investments you may do so. The simplest way to accomplish this is through a direct custiodian to custodian transfer. The firm that will be receiving the funds can provide the forms you need.

If you make a withdrawal you will have 60 days from the time you receive the funds to deposit the funds in another IRA, and you can only do this once per year.

Answer 3

If what is in the IRA goes into a CD that is IN an IRA then you should have no tax consequence.

Keep in mind an IRA is like a pail.... what you put in that pail is up to you for investments. CD's are just one thing you can have within IRA's.

Also you cannot transfer a regular IRA to a ROTH IRA with out some sort of tax or penalty. The ROTH works differently and a good accountant will direct you wisely on the avenue to take.

Answer 4

No. IRA's can only be "rolled over" into similar accounts. (In other words, transferring a traditional IRA in one bank to a traditional IRA account at another bank.)

Converting to CD's would be the same as taking the money out and spending it. You can't do this until you're 59 1/2.

What you can do is talk to your bank and see what options you have for investing your IRA. Chances are, they're already invested in CD's or something similar and you'll have no need to do anything. If your IRA is invested in mutuals or a diversified program, all you have to do is ask them to put it into CD's instead.