Individual Retirement Account CD

  • Choose from either a Roth or Traditional IRA CD
  • No monthly maintenance fees
  • Competitive rates with guaranteed returns
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Competitive rates and tax-advantaged benefits.

Whichever IRA CD option you choose, this is one of the easiest, safest routes to a comfortable future.

  • Deposits are FDIC insured up to the maximum allowed by law
  • Open with as little as $2,500
  • Flexible terms from 3 months to 10 years
  • Convenient renewal options at maturity
Top Tier - Bankrates.com

Top Tier Quarterly Winner for consistently high yields4.

— Bankrate.com, 4Q 2013

IRA CD Rate Chart
Term Interest Rate APY1
Rates as of XX/XX/XX

Enjoy guaranteed returns.

Earn more with Discover's competitive rates that have consistently exceeded the IRA CD National Average2.

Discover National Average2 Bank of America3 Chase3
Account Balance Interest Rate APY1 APY APY APY
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Frequently Asked Questions for Discover IRA CD

Make your money work harder.

Use the IRA CD Earnings Interest Calculator to plan your annual contributions and factor in any rollovers to see your projected value.

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The values shown in the calculator are for illustrative purposes only and may not apply to your individual circumstances.

Enjoy predictable growth for a secure future.

While both Roth and Traditional IRAs are excellent investments to help you save for retirement each has different advantages and requirements.

Frequently Asked Questions

What is the minimum deposit amount to open my Individual Retirement Account (IRA) Certificate of Deposit (CD)?

The minimum initial deposit is $2,500.

How can I fund my IRA CD Account?

  • Transfer: Transfer from an existing IRA account from another financial institution
  • Rollover: Rollover from a personal bank account or another financial institution
  • New contribution: Deposit from an existing Discover Bank account or an external bank account
  • Call us at 1-888-204-8966
  • Mail a check that includes your Account number, made payable to you to:

    Discover Bank

    PO Box 30418

    Salt Lake City, UT 84130

  • Travelers Checks will not be accepted for deposit

What fees are associated with my IRA CD?

Fees associated with your CD Account include a $30 Wire Transfer Fee and early withdrawal fees listed below.

The Early Withdrawal Fees are as follows:

For IRAs CDs opened or renewed through 3/14/13:

  • <1 year: 3 months simple interest on principal amount withdrawn
  • 1 year-5 years: 6 months simple interest on principal amount withdrawn
  • 6+ years: 9 months simple interest on principal amount withdrawn

For IRA CDs opened or renewed from 3/15/13 through 2/16/14:

  • <1 year: 3 months simple interest on principal amount withdrawn
  • 1 year-3 years: 6 months simple interest on principal amount withdrawn
  • 4 years-6 years: 9 months simple interest on principal amount withdrawn
  • 7+ years: 15 months simple interest on principal amount withdrawn

For IRA CDs opened or renewed on or after 2/17/14:

  • <1 year: 3 months simple interest on principal amount withdrawn
  • 1 year-3 years: 6 months simple interest on principal amount withdrawn
  • 4 years: 9 months simple interest on principal amount withdrawn
  • 5 years-6 years: 18 months simple interest on principal amount withdrawn
  • 7+ years: 24 months simple interest on principal amount withdrawn

*Please note, in some cases, the Early Withdrawal Fee may reduce the principal in the CD.

How do I complete a wire transfer?

To complete an outgoing wire transfer, click here to access a Wire Transfer Form.
When initiating an incoming wire, please wire funds to:

  • Mellon Bank - Routing Number 043000261
  • Discover Account - 9914394
  • Further credit your name and your Discover Bank account number

What happens when my IRA CD matures?

We will issue a notification 30 days before your IRA CD matures. For your convenience, if no response is received, your IRA CD will automatically renew for the same term with the balance and interest rate as of your maturity date. If you do not want your CD to automatically renew, you can:

  • Change your term or balance amount
  • Close your IRA CD and withdraw your balance

To avoid an early withdrawal fee, changes to your account must be made within nine (9) days after your maturity date. If you elect not to renew your account, you will not be paid interest after the maturity date.

Note: Withdrawing funds from your IRA CD could result in potential tax consequences

Will I receive a confirmation when my IRA CD automatically renews?

Yes. You will receive a confirmation letter when your IRA automatically renews.

Will I receive a certificate for my IRA Certificate of Deposit (CD)?

No, you will not receive a certificate for your IRA Certificate of Deposit (CD). However, your account information is available 24/7 by logging in to the Account Center at DiscoverBank.com

Which type of IRA is the best choice for me?

Discover offers both Roth and Traditional IRAs. When choosing which type of IRA to open, you should consider factors such as your taxable income, age and family status. Your financial advisor or tax professional can help you determine which type of IRA is best suited to your needs.

Can I have more than one IRA?

Yes, you can have multiple IRAs; however, your total contribution can't be more than the maximum contribution allowed for that year. Multiple IRAs can be opened with the same or different financial institutions. You can have only one of each plan type (one Roth IRA and one Traditional IRA), but you can have multiple CDs within each plan type.

Can I contribute to both a Roth and a Traditional IRA?

Yes, your annual contribution can be divided between both types of IRAs as long as you meet the eligibility requirements for each type of IRA. You should consult a financial advisor or tax professional for specific advice.

Can I designate a beneficiary for my IRA?

Yes, in fact, all Discover IRA account holders are encouraged to designate at least one beneficiary by completing a beneficiary form.

You will need to provide the name, address, date of birth and Social Security number for your beneficiary and describe their relationship to you (i.e., parent/child, spouse). If you are married, by default your spouse will be designated as your primary beneficiary unless you and your spouse indicate otherwise on the beneficiary portion of the online application.

What is the difference between a transfer and a rollover?

Both transfers and rollovers are ways to move funds from one retirement account to another.

Transfer: funds are moved directly from one IRA (or other type of retirement plan) into another by the financial institution(s) where the accounts are held. Since you do not handle the funds directly, the transaction is not considered a distribution. There are no limits to the number of transfers you can make.

Rollover: funds from one IRA (or other type of retirement plan) are distributed to you. It is then up to you to deposit the funds into another IRA or other retirement plan within 60 days in order to avoid tax consequences. Assets in the Rollover IRA are not counted toward your annual IRA contribution limits. Only one rollover for a single account is permitted per 12 month period.

Is there a limit to how often I can rollover funds?

You are permitted to make one rollover for a single account in a 365-day period.

Is there a limit on the amount of money I can roll over?

No, you can roll over as much money as you'd like.

When will I receive my IRA CD statements?

IRA CD statements are sent annually in January.

Can I borrow funds or withdraw from my IRA CD?

Loans may not be taken from IRA CDs. There are limited circumstances when you may withdraw before age 59 from either a Roth or Traditional IRA without penalty. You should consult a tax professional or financial advisor for specific advice related to this transaction.

Can I transfer funds from my employer's retirement plan into an IRA CD?

Yes, funds can be transferred into an IRA CD from any qualified retirement account. You should consult your financial advisor or tax professional for specific advice related to this transaction.

Can a Traditional IRA CD be converted to a Roth IRA CD?

Yes, a Traditional IRA CD can be converted to a Roth IRA CD as a rollover contribution. You should contact your financial advisor or tax professional for specific advice related to this transaction.

What are the benefits of making a conversion from a Traditional IRA CD to a Roth IRA CD?

A Roth IRA CD provides the following potential benefits not offered by a Traditional IRA CD:

  • Contributions can be made at any age, even after age 70 , provided you still have earned income.
  • There is no minimum distribution requirement.
  • Once the plan has been open for at least five years, distributions are not subject to tax or government penalties.

Are there any disadvantages to converting from a Traditional IRA CD to a Roth IRA CD?

Converting from a Traditional IRA CD to a Roth IRA CD may have some tax implications. You should discuss this with your financial advisor or tax professional prior to conversion

How much of my IRA CD contribution is tax deductible?

Your financial advisor or tax professional can help you determine exactly how much of your IRA CD contribution is tax deductible.

What are the rules regarding distribution of assets to my beneficiaries after death?

For a Roth IRA CD, no restrictions apply. However, for a Traditional IRA CD, there are rules concerning age at death and calculating required minimum distributions to the beneficiaries. Your financial advisor or tax professional can help you determine the rules around distributions to beneficiaries.

How are my IRA CD transactions reported to the IRS?

Form 5498 will be mailed to you and the IRS by May 31st. The form reports the contributions made during the previous tax year.

Form 1099-R will be mailed to you and the IRS by January 31st. The form is used to report IRA distributions for the previous calendar year

If I need more tax help, where should I go?

The Internal Revenue Service Web site, www.irs.gov, is a good starting point. You can also contact the IRS by phone at 1-800-829-1040.

How do I fund my IRA CD Account or make additional deposits?

You can fund your account in the following ways:

  • Online transfer from an eligible Discover Bank Account or external bank account
  • Call us at 1-800-888-204-8966
  • Wire Transfer (fees may apply)
  • Mail a check that includes your Account number, made payable to you to:

    Discover Bank

    PO Box 30417

    Salt Lake City, UT 84130

  • Travelers Checks will not be accepted for deposit

How to I complete a Wire Transfer?

To complete an outgoing wire transfer, click here to access a Wire Transfer Form.
When initiating an incoming wire, please wire funds to:

  • Mellon Bank - Routing Number 043000261
  • Discover Account - 9914394
  • Further credit your name and your Discover Bank account number

How do I withdraw money from my IRA CD Account?

Click here to log in and access the IRA Request for Distribution form. To access the form, click on the "Customer Service" option in the navigation and select "Traditional IRA CD Account Forms" in the Forms and Documents box. You can then submit the completed from to Discover by mail or fax. For other questions regarding your IRA CD Account, please call us at 1-888-204-8966 to speak with one of our Banking Specialists.

  • Fax: 1-801-996-2683
  • Mail: Discover Bank, PO Box 30418, Salt Lake City, UT 84130

Note: Early withdrawal penalties may apply if you withdraw money from your IRA CD Account before the IRA CD has matured.

Is there an early withdrawal penalty for removing funds from my Discover Bank IRA CD Account?

Early withdrawal penalties may apply for early distribution of funds from an IRA CD Account. However, if the funds distributed are a result of a Required Minimum Distribution, those funds are not subject to an early withdrawal penalty.

When will I start earning interest on new deposits?

You will start to earn interest on the day your account is funded if the deposit occurred at or before 2pm ET. After 2pm ET, you will start to earn interest on the next business day.

How is interest on my Discover account calculated?

Interest is accrued and compounded daily and credited to your account monthly. Use our calculators for more information.

What is APY and how is it used?

APY stands for Annual Percentage Yield. The annual percentage yield is the amount of interest earned in one year. APY is shown as a percentage rate and it is determined by factoring the interest rate with the frequency of compounding. The more frequently compounding takes place, the more interest is earned on the account.

What is the difference between APY and APYE?

  • APY: The annual percentage yield (APY) measures the total amount of interest paid on an account based on the interest rate and the frequency of compounding.
  • APY Example: A 10-Year CD with a rate of 2.47% will effectively yield 2.50% over a one-year period due to compounding.
  • APYE: The annual percentage yield earned (APYE) for periodic statements is an annualized rate that reflects the relationship between the amount of interest actually earned on the consumer's account during the statement period and the average daily balance in the account for the statement period.
  • APYE Example: An account with a rate of 1.09% (APY 1.10%) for the first half of the year repriced to a rate of 1.19% (APY 1.20%) for the second half of the year would have an APYE in between 1.10% and 1.20%. The actual percentage would depend on the weighted average of the balance in the account during those time periods.

What is the deadline for submitting a distribution form to Discover Bank to fulfill my Required Minimum Distribution (RMD) by December 31?

The deadline to submit a distribution form for RMD is December 15. Discover Bank cannot guarantee forms received after December 15 will be processed by the December 31 deadline.

How can I get a distribution form to submit to Discover Bank for my RMD?

Click here or log in to the Account Center at DiscoverBank.com. After logging in to the Account Center, click on Customer Service and select the form under the "Forms and Documents" section.

Can I take 100% of my RMD from my Discover Bank IRA CD account?

Yes, assuming the balance is large enough.

Do I have to take my RMD from my Discover Bank IRA account or can I take it from an IRA that I have at another financial institution?

You can fulfill your RMD requirements from an IRA account at any financial institution.

I don't know how much I'm required to take from my IRA account. How can I find out?

Financial institutions typically send notices early in the year to advise IRA account holders of their RMD requirements, including the amount required to be withdrawn. If you did not receive your notice from Discover Bank, or have misplaced it, just call us at 1-888-204-8966 and we will be happy to assist you.

Is there an early withdrawal penalty for removing funds from my Discover Bank IRA CD account?

Early withdrawal penalties may apply for early distribution of funds from an IRA CD account. However, if the funds distributed are a result of a Required Minimum Distribution, those funds are not subject to an early withdrawal penalty.

Do I have to submit a form to request my RMD?

Yes. Discover Bank requires that all distributions be requested using the distribution form. Your distribution form must be received by Discover Bank no later than December 15.

Will Federal and/or State withholding be applied to my RMD?

Federal and State withholdings will be applied where required by federal and/or state regulation unless you indicate otherwise on your distribution form.

Are there tax consequences if I fail to take an RMD by the December 31st deadline?

Yes. Failing to take your Required Minimum Distribution may result in tax consequences from the Internal Revenue Service. Discover Bank encourages you to seek the advice of your tax professional or financial planner for specific tax consequences.

How do I submit my RMD distribution form to Discover Bank?

Forms can be mailed or faxed to Discover Bank. [Reminder, all forms must be received by Discover Bank no later than December 15 to guarantee processing by the December 31 deadline.]

  • Fax:

    1-801-996-2683

  • Mail:

    Discover Bank

    PO Box 30418

    Salt Lake City, UT 84130

When should I expect to receive my RMD distribution?

Discover Bank will process your RMD distribution upon receipt and you should expect to receive your distribution within 10 days of processing.

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