what is an ira certificate

An IRA certificate, also known as an IRA CD, is a type of savings account that is held within an individual retirement account (IRA) . It is a way to earn higher dividends on your retirement savings by investing in a certificate of deposit (CD) . A CD is essentially a type of savings account where the account holder gets a little more interest in return for keeping the money in the account for a specific period of time, usually from six months to five years. An IRA CD works by holding a CD, which is an interest-earning savings account, within an IRA container that holds investments for retirement. The advantage of investing in an IRA CD is that the IRA container means you never have to pay capital gains taxes on your investment gains. However, there are restrictions on the use of an IRA CD before reaching retirement age, and there are pros and cons to investing in an IRA CD.