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Save for Retirement with an Armed Forces Bank Certificate of Deposit IRA

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Planning for retirement isn’t easy -- whether you’re in the military or a civilian.

Are you meeting your retirement savings goals? Unfortunately, many Americans are behind on their retirement savings contributions. While it’s best to start as early as possible, it’s never too late to create better retirement savings habits. There are many ways to augment your strategy -- for example, a Certificate of Deposit IRA could help you save extra money.

Keep reading to learn more about saving for retirement, CD IRAs and how they work, and how Armed Forces Bank’s CD IRA could be the right choice for you.

Saving for Retirement in the Military

Saving for retirement is one of the most important savings goals that many people have -- including those in the military. But this can be confusing. On top of understanding which type of military retiree recipient you are, there’s also the fact that the military has made many changes to the types of retirement plans offered over the years.

Retirement plans allow you to play an active role in contributing to your retirement account, setting yourself up for a financially secure future. It’s also important to start as soon as possible, which can help give your funds the opportunity to grow over many years. So even if you’re in your 20s or 30s, it’s important to continue investing in your future. No matter how old you are, making a commitment to saving for retirement will benefit you for years to come.

Regardless of the military retirement plan you have, you can always augment your retirement strategy with different types of accounts, such as IRAs -- or Individual Retirement Accounts. IRAs can be invested in several different types of assets, such as stocks, bonds, mutual funds, and certificates of deposit (CDs).

How a Certificate of Deposit (CD) IRA Works

There are two main types of IRAs: traditional IRAs and Roth IRAs. The main difference is when your account is subject to taxes.

Traditional IRAs are taxed when you withdraw the money from the account, so contributions are made with pre-tax dollars. This account offers tax-deferred growth. Roth IRAs, on the other hand, are funded with post-tax dollars, so they are not taxed upon withdrawal. This account offers tax-free growth. You can choose the account type that works best for your goals.

Certificate of Deposit IRA accounts can be opened as either a traditional or Roth IRA. But what is a CD IRA?

A CD IRA essentially means that your IRA invests in CDs. CDs can be useful as investment vehicles for those who are looking to earn interest on their money without taking on risk.

Other benefits of CDs include the potential for a higher interest rate than with other types of savings accounts, guaranteed return plus interest, and being insured by the FDIC. In 2022, an IRA CD has a contribution limit of $6,000, or $7,000 if you’re age 50 or older. In 2023, this IRA contribution limit will increase to $6,500 and $7,500, respectively.

Armed Forces Bank Offers Competitive CD IRAs*

At Armed Forces Bank, we know it’s never too early to plan for your future.

An IRA is a simple and easy way to enjoy guaranteed returns, and the peace of mind that comes with them.

Our IRAs have the following benefits:

  • Guaranteed tax-deferred growth
  • Balances are FDIC insured up to maximum allowed by law
  • Flexible terms to fit your specific objectives
  • Yields that are higher than many Treasury bonds, with no risk to your principal
  • Traditional and Roth IRA options are available

Keep in mind that you’ll need a minimum opening balance of $500 to obtain the disclosed annual percentage yield. A fixed rate of interest is earned on the entire balance.

What Else You Should Know about Armed Forces Bank’s CD IRAs

With a CD IRA, if you withdraw funds before the set term, you’ll have to pay a penalty. The amount of the penalty depends on the length of the account term. Penalties are as follows:

  • 7 - 91 Days: 60 days loss of interest
  • 92 - 182 Days: 182 days loss of interest
  • 183 - < 60 Months: 1 year loss of interest
  • 60 Months: 2 years loss of interest

This account can be used to invest your IRA or ESA.

For Certificates issued for IRAs or Education Savings Account (ESA), the interest is compounded and credited quarterly for investment terms of 12 months or longer. Shorter-term investments pay at maturity.

Interest may be withdrawn by IRA holders 59 1/2 or older by transfer to an internal account or ACH to another bank, monthly, quarterly, semi-annually, or annually. Interest may be withdrawn by check semi-annually, annually or at maturity, whichever comes first.

Retirement Distributions from any Individual Retirement Account may begin upon permanent disability or death without incurring an early withdrawal penalty. Additional documentation is required.

Armed Forces Bank Helps You Save to Retire

Whether it seems far away or just around the corner, an IRA from Armed Forces Bank offers a way to start your retirement savings plan or supplement your other savings and investment plans.

Ready to get started? Open your new CD IRA account online with Armed Forces Bank. Or find the Armed Forces Bank branch nearest you. Need easier access to your cash in retirement, but still want to earn APY? Check out our Premier Money Market IRAs.

Member FDIC
*A penalty may be imposed for early withdrawal. The Annual Percentage Yield (APY) is accurate as of December 14, 2022. CD rates are subject to change at any time and are not guaranteed until CD is opened. Fees charged to the account could reduce earnings on the account. Penalty amounts apply to all new CDs/IRAs opened or renewed after September 2015. FDIC-insured up to the maximum allowed by law.