Individual Retirement Account CD

  • Choose from either a Roth or Traditional IRA CD
  • No monthly maintenance fees
  • Competitive rates with guaranteed returns
Open an Account Or call 24/7 at

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
  • See the IRA CD Account Guide for more information
Top Tier - Bankrates.com

Top Tier Quarterly Winner for consistently high CD and IRA CD yields4.

— Bankrate.com, 3Q 2014

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
Open an Account
Frequently Asked Questions for Discover IRA CD

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 an Individual Retirement Account (IRA) Certificate of Deposit (CD)?

The minimum initial deposit to open an account is $2,500.

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

You can fund your IRA account in the following ways:

  • Call us at 1-888-204-8966
  • Through an online ACH transfer for Current and Prior year contributions
  • Initiate a Bank to Bank transfer of an existing IRA
  • Initiate a direct or indirect rollover of an existing IRA
  • Wire Transfer (fees may apply)
  • Mail a check that includes your account number, made payable to you to:
    Discover Bank
    PO Box 30418
    Salt Lake City, UT 84130

*Please note that Traveler Checks will not be accepted for deposit.

What is the Discover Bank routing number?

The Discover Bank routing number is 031100649 for direct deposit and electronic transfers made by ACH, but not for wire transfers. 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 IRA CD number

How do I complete a Wire Transfer?

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 IRA CD number

What fees are associated with my IRA CD?

Fees associated with your IRA CD Account include the early withdrawal fees listed below. We do not assess an Early Withdrawal Fee for a Required Minimum Distribution (RMD).
The Early Withdrawal Fees are as follows:

For IRA 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 that in some cases, the Early Withdrawal Fee may reduce the principal in the IRA CD. You may want to contact a financial advisor or tax professional for further information regarding tax consequences.

See the IRA CD Account Guide for more information

Are Discover IRA CDs FDIC-insured?

Yes. Funds on deposit at Discover Bank are FDIC-insured up to the maximum allowed by law. For more information, visit our FDIC information page.

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

Yes. Funds may be moved into an IRA CD from any qualified retirement account. This transaction is done via a Direct or Indirect Rollover. You may want to consult a financial advisor or tax professional. You may also call our IRA Specialists at 1-888-204-8966 for more information.

What is the difference between a transfer and a rollover?

When you transfer funds from an IRA, the funds are moved directly from one financial institution to another. The transfer check is made payable to your financial organization on your behalf. Because you don't handle the funds directly, the transaction is not considered a distribution. There is also no limit to the amount of transfers you can make.

When you rollover funds, you directly receive the funds through a distribution from your IRA, and then you have 60 days to deposit the funds into another IRA or retirement plan in order to avoid tax consequences. IRA owners are limited to one rollover per plan per year. Additionally, IRA owners may not rollover the same assets within 12 months. Please note rollovers are not counted toward your annual IRA contribution limits.

For both transfers and rollovers, funds need to be moved between the same type of IRA account. For example if you have a Traditional IRA you can only transfer or rollover funds from another Traditional IRA.

Note: Distributions from Discover Bank are reported on IRS form 1099-R. Contributions, including rollovers, conversions or recharacterizations, are reported on IRS form 5498.

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

Only one rollover per plan is permitted per 12 month period.

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

No. You can rollover as much money as you want, however, the same assets may not be rolled over more than once in a 12 month period.

What happens when my IRA CD matures?

We will send a notification 30 days before your IRA CD matures. When your IRA CD matures, you may make a deposit or withdrawal and change the term of your IRA CD during the grace period. The grace period lasts for 9 days immediately following the maturity date. Your IRA CD will automatically renew if you don't take any action during the grace period and interest withdrawals will not affect the grace period. Any term change, deposit, or withdrawal of principal during the grace period will end the grace period.

In some cases, the Early Withdrawal Fee may reduce the principal in the IRA CD. You may want to contact a financial advisor or tax professional for further information regarding 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 CD?

No. You will not receive a certificate for your IRA CD; however, you will receive a welcome kit when you open your IRA CD. You can access your IRA CD information anytime via the Account Center but will need to call us at 1-888-204-8966 to make changes.

When will I receive my IRA CD statement?

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 and there are limited circumstances when you may withdraw from the account before age 59½ from either a Roth or Traditional IRA without penalty. You may want to consult a financial advisor tax professional or our IRA Specialists at 1-888-204-8966 for more information.

How do I withdraw money from my IRA CD Account?

To login and access the IRA Request for Distribution form, please click here. After you log in, click on the "Customer Service" option in the navigation and select either "Traditional IRA CD Account Forms" or "Roth IRA Forms" in the Forms and Documents box. You can then submit the completed form to us 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 IRA Specialists.

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

In some cases, the Early Withdrawal Fee may reduce the principal in the IRA CD. You may want to contact a financial advisor or tax professional for further information regarding tax consequences.

How much of my IRA CD contribution is tax deductible?

Consult a financial advisor or a tax professional to help you determine exactly how much of your IRA contribution is tax deductible.

Can I designate a beneficiary for my IRA CD?

Yes. We actually encourage all our IRA account holders to designate at least one beneficiary by completing a beneficiary form.

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

Traditional and Roth IRA plans offer multiple options for beneficiary distribution. There are several rules concerning age at time of death and calculating required minimum distributions (RMDs) to beneficiaries. You may want to consult a financial advisor or tax professional to help you determine the rules around distributions to beneficiaries. RMDs do not apply to Roth accounts.

How are my IRA CD transactions reported to the IRS?

Any contributions made during the tax year will be reported on form 5498. Additionally, any Rollovers, Conversions, and Recharacterizations are also reported on form 5498. We will send Form 5498 to you and the IRS by May 31. Any distributions made from your IRA during a tax year will be reported on form 1099-R. We will send Form 1099-R to you and the IRS by January 31.

If I need tax help, who should I contact?

The Internal Revenue Service is a great resource. The IRS also can be reached by phone at 1-800-829-1040.

Do I need to obtain spousal consent if I live in a community property state?

Yes. We require spousal consent regardless of the state you live in.

Do I need to obtain spousal consent if my spouse is the sole primary beneficiary?

No. However, if you later make changes to your primary beneficiaries, you will need to provide spousal consent.

How do I decide which IRA CD is the best choice for me?

When choosing which type of IRA to open, you should consider factors such as your taxable income, age, and Tax Filing Status. You may want to consult a financial advisor or tax professional to help you determine which type of IRA is best suited to your needs. You can also call our IRA Specialists at 1-888-204-8966 to discuss available products.

What is the difference between a Traditional IRA and a Roth IRA?

Traditional IRAs are a retirement plan for contributions made with pre-tax dollars. Some contributions to Traditional IRAs are tax deductible and most distributions are taxable. Roth IRAs are a retirement plan for contributions made with after tax dollars. Contributions are nondeductible and all qualified distributions are tax free.

Can a Traditional IRA be converted into a Roth IRA?

Yes. A conversion is a taxable, reportable movement of assets from a Traditional IRA to a Roth IRA. Consult a financial adviser or tax professional for guidance. For assistance in completing a conversion, please contact an IRA specialist at 1-888-204-8966.

A Traditional IRA may be converted to a Roth IRA as a direct or indirect conversion. In a direct conversion you never have access to your money. It is sent bank to bank and directly placed into a Roth IRA on your behalf. An indirect conversion is similar to a Rollover. You will receive a check made payable to you that can be deposited into your new Roth IRA account. Consult a financial advisor or tax professional for guidance. For assistance in completing a conversion, contact an IRA Specialist at 1-888-204-8966 for additional information.

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

Roth IRA contributions may be made at any age, even after age 70½, provided you still have earned income. There is no required minimum distribution on a Roth IRA. Once a Roth plan has been open for at least 5 years, distributions are not subject to tax or government penalties.

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

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

What is the difference between a transfer and a rollover?

When you transfer an IRA, the funds are moved directly from one financial institution to another. The transfer check is made payable to your financial organization on your behalf. Because you don't handle the funds directly, the transaction is not considered a distribution. There is also no limit to the amount of transfers you can make.

When you rollover funds, you directly receive the funds through a distribution from your IRA, and then you have 60 days to deposit the funds into another IRA or retirement plan in order to avoid tax consequences. IRA owners are limited to one rollover per plan per year. Additionally, IRA owners may not rollover the same assets within 12 months. Please note rollovers are not counted toward your annual IRA contribution limits.

For both transfers and rollovers, funds need to be moved between the same type of IRA account. For example if you have a Traditional IRA you can only transfer or rollover funds from another Traditional IRA.

Note: Distributions from Discover Bank are reported on IRS form 1099-R. Contributions, including rollovers, conversions or recharacterizations, are reported on IRS form 5498.

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

Only one rollover per plan is permitted per 12 month period.

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

No. You can rollover as much money as you want, however, the same assets may not be rolled over more than once in a 12 month period.

Can I have more than one IRA?

Yes, you can have both Traditional and Roth IRA accounts at Discover Bank. Your Traditional IRA accounts will be grouped into and administered as a single Traditional IRA plan, and Roth IRA accounts will be grouped into a single Roth plan. Additionally, if you maintain Inherited IRA accounts, they will be in separate plans.

Please note you may not contribute more than the allowable maximum spread across the two plans.

Click here for more information on contribution limits.

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

Yes, you can contribute to both plan types. Your annual contribution can be divided between both types as long as you meet the eligibility requirements for each IRA type. For specific advice on the best way to contribute, you may want to consult a financial advisor or tax professional. You can also call our IRA Specialists at 1-888-204-8966 to discuss your options.

Can I designate a beneficiary for my IRA CD?

Yes. We actually encourage all our IRA account holders to designate at least one beneficiary by completing a beneficiary form.

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

Traditional and Roth IRA plans offer multiple options for beneficiary distribution. There are several rules concerning age at time of death and calculating required minimum distributions (RMDs) to beneficiaries. Consult a financial advisor or tax professional or call our IRA Specialists at 1-888-204-8966 to help you determine the rules around distributions to beneficiaries. RMDs do not apply to Roth accounts.

When will I start earning interest on new deposits?

You will start to earn interest on the business day your deposit is received.

How is interest on my IRA CD calculated?

Interest is compounded daily, credited to your account monthly, and calculated on a 365-day basis. Use our calculators for more information.

What is the difference between APY and APYE?

APY stands for Annual Percentage Yield and is the effective annual rate of return taking into account the effect of compounding interest. The Annual Percentage Yield Earned or APYE for periodic statements is an annualized rate that reflects the relationship between the amount of interest actually earned on an account and the average daily balance for the statement period. For more information about APY and APYE, click here to visit the U.S. Government Printing Office website.

APY Example:
An IRA with an interest rate of 2.47% will have an APY of 2.50% due to compounding.

APYE Example:
An account with an interest rate of 1.09% (APY 1.10%) for the first part of the statement period and a rate of 1.19% (APY 1.20%) for the second part of the statement period 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.

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

Yes. We require that all distributions be requested using the distribution form or 70½ election form. You should submit your requests for RMDs by December 15 to ensure adequate time for processing by the December 31 deadline.

Where do I find the form for my RMD?

To access the distribution form, click here. To access the 70½ election form click here.

How do I submit my RMD form?

You can mail or fax your forms to us. Please remember you should mail all forms by December 15 to guarantee processing by the December 31 deadline.
Discover Bank
PO Box 30418
Salt Lake City, UT 84130
Fax: 1-801-996-2683

When should I expect to receive my RMD?

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

What is the deadline for submitting my RMD request?

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

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

Yes, you can take 100% of your RMD from your Discover IRA accounts assuming your balance at Discover Bank is large enough.

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

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

How do I find out how much I'm required to take from my IRA CD?

Financial institutions typically send notices early in the year to advise IRA customers of their RMD requirements, including withdrawal amount required. Discover Bank notifies IRA owners of RMD requirements on the IRA annual statement and on form 5498. If you did not receive these forms from us or have misplaced them, please call us at 1-888-204-8966.

What fees are associated with my IRA CD?

Fees associated with your IRA CD Account include the early withdrawal fees listed below. We do not assess an Early Withdrawal Fee for a Required Minimum Distribution (RMD).

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 that in some cases, the Early Withdrawal Fee may reduce the principal in the IRA CD. You may want to contact a financial advisor or tax professional for further information regarding tax consequences.

See the IRA CD Account Guide for more information

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

Yes, Federal and State withholding will be applied where required by federal and/or state laws. In some cases, you will be able to indicate that you prefer no withholding or more withholding than is required. You will always be responsible for the income tax obligations of distributions from your IRA accounts. You may want to consult a financial advisor or tax professional to make sure your withholding elections are right for you.

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

Yes. Failing to take your RMD may result in tax consequences from the Internal Revenue Service (IRS). For more specifics regarding the consequences, you may want to consult a financial advisor or tax professional. For general questions and information regarding your IRA, please call our IRA Specialists at 1-888-204-8966.

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1. Annual Percentage Yield (APY) is accurate as of XX/XX/XX. Interest rate will be disclosed and will be fixed for entire IRA CD term once funding is received. Written confirmation of the interest rate, APY, and maturity date is sent after the account is open and funded.

2. National IRA CD Average APYs based on rates of top 50 U.S. banks (ranked by total deposits) provided by Informa Research Services, Inc., as of XX/XX/XX.

3. Competitor comparison information obtained from Informa Research Services, Inc., as of XX/XX/XX, using Illinois IRA CD account rates. Rates assume a $2,500 minimum deposit to open. When no competitor rate is available a dash "-" is displayed. The non-Discover Bank service marks Bank of America and Chase are owned by each respective entity. All rights reserved. Although the information provided by Informa Research Services has been obtained from the various institutions, the accuracy cannot be guaranteed.

4. Discover Bank has received the Bankrate.com® Top Tier Award for consistently offering annual percentage yields (APYs) that were among the highest reported in 100 Highest Yields® for 3rd quarter 2014. See http://www.bankrate.com/brm/rate/rankings.asp for complete details.