The Best IRA Savings Accounts

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When you hear the term individual retirement account (IRA), you may automatically think of a retirement savings account. However, many people don’t realize that they can use their IRA as a savings account, too. When money gets put into an IRA, the customer can often get a better interest rate than a typical savings account might offer.

The Best IRA Savings Accounts

Self-Help Federal Credit Union

IRA Account

APY

1.87%

Min to earn APY

$100

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on Self-Help Federal Credit Union's secure site

Ally Bank

IRA Online Savings Account

APY

2.00%

Min to earn APY

None

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on Ally Bank's secure site

Alliant Credit Union

IRA Savings

APY

2.00%

Min to earn APY

$100

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on Alliant Credit Union's secure site

Bethpage Federal Credit Union

IRA Money Market

APY

1.75%

Min to earn APY

$1.00

APPLY NOW

on Bethpage Federal Credit Union's secure site

Communitywide Federal Credit Union

IRA Savings

APY

2.25%

Min to earn APY

$2,000

APPLY NOW

on Communitywide Federal Credit Union's secure site

U S Postal Service Federal Credit Union

Regular IRA Savings - Relationship Rewards

APY

1.41%

Min to earn APY

None

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on U S Postal Service Federal Credit Union's secure site

Spectrum Credit Union

MarketEdge IRA

APY

1.85%

Min to earn APY

$2,500

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on Spectrum Credit Union's secure site

Latino Credit Union

IRA Share Account

APY

2.02%

Min to earn APY

$25.00

LEARN MORE

on Latino Credit Union's secure site

Synchrony Bank

IRA Money Market Account

APY

1.20%

Min to earn APY

None

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on Synchrony Bank's secure site

nbkc bank

IRA Savings

APY

1.11%

Min to earn APY

None

LEARN MORE

on nbkc bank's secure site

How we chose the best IRA savings accounts

In order to help you find the best banks with IRA savings accounts, the chart below uses data from DepositAccounts.com, which is a subsidiary of LendingTree and one of the best sources for deposit account rates online. For this round-up, we looked exclusively at banks and credit unions in the United States.

If there is a credit union included in our list, that’s because it has membership requirements that are easy to meet, like paying a nominal fee. Every financial institution on this list also has a health rating of B or above, with most of them being in the A or A+ range. Lastly, each lender is listed with the APY for its IRA savings account rates, not CD rates. The distinctions will be covered in a later section.

What is an IRA savings account?

Most people who have IRA accounts have them at brokerage firms instead of banks because they are intended to help people save for retirement. However, many people don’t realize banks like the ones mentioned above also offer IRA savings accounts.

According to Ken Tumin, the founding editor of DepositAccounts.com, more conservative investors may prefer to hold IRA savings accounts at regular banks.

“If an investor chooses a bank for his/her IRA, the options are typically just CDs and savings/money market accounts,” Tumin explains. He went on to say that this could be a good option “for people who are conservative investors or are near or in retirement” and are especially averse to risk.

On the flip side, if you’re currently working and are looking to invest in such a way that you have a good chance at growing your nest egg and beating inflation, an IRA savings account is probably not the best tool for you. You are likely better off investing in an IRA through a brokerage firm, or contributing to your 401(k), where you have access to more diverse investments and can take greater risks with your savings (and potentially earn higher rewards).

How IRA savings accounts are invested

If you do decide to put a bank account inside your IRA, that IRA would be used as a holding account for your savings, which would typically be put in a savings account, money market account, or a CD. A CD, which stands for Certificate of Deposit, is different from a money market account because a CD has a fixed maturity date.

This means that if you put your money in a 60-month IRA CD, you will be penalized if you withdraw your money before that maturity date. The benefit is that you can typically earn higher interest rates the longer you agree to leave your money in a CD. The IRA savings account rates in the chart above are not CD rates; they are rates for savings accounts.

A money market account rate is an option if a consumer doesn’t want to lock their money in a CD for a set period of time. It’s a better option for people who want to access their money when they need it, but as evidenced in the chart above, their rates are not as good as CD rates because of that ability to access the money. It’s also good for people who don’t have a lump sum to give and rather want to save a little bit at a time. Many of the IRA savings accounts shown in the chart above do not have minimums to open them.

How to maximize your retirement savings

The best way to maximize your retirement savings is to start as early as possible. The more you can squirrel away in the earlier years of your career, the more you can benefit from compound interest.

Once you do pick a retirement savings vehicle, like an IRA, be sure to do your research, compare APY rates, and find a bank or brokerage firm with an excellent reputation.