Best IRA Rates – An Investigation

If you’re looking for the “best IRA rates,” one of the following things probably applies to you:

  1. You’re a little confused about IRAs and how they work.
  2. You’re conservative or otherwise don’t feel confident directing your own investments.
  3. You’re going to be needing the money soon (like, less than 5 years from now) and you want to earn some tax-free interest on it between now and then.

No, I’m not a psychic. But I do know what I’m talking about : ) If none of those three things apply to you, then you shouldn’t be asking what the best IRA rates are. You should be asking what the best investments are to hold in your IRA. Learn 4 Key Principles to Smart Stock Investing If #1 from above applies to you, spend some time in the IRA Center. If #’s 2 or 3 from above apply to you, then searching for good IRA rates may make sense for you. The rate that you get depends mainly on 3 things:

  1. Market interest rates. This is the biggie. Have you been hearing anything recently about the American economy going into a recession? Have you heard about ‘The Fed cutting rates?’ Interest rates have been lowered substantially and are very low right now. That means you can borrow money for cheap (good). But it also means that you don’t earn much interest on money that you lend or save (bad).
  2. The term that you select. How long are you willing to leave your money in the IRA? You can choose terms ranging from 1 month to 10 years. Typically, the best IRA rates are given for a term of about 6 months.
  3. The amount that you invest. Are we talking about $1,000 or $1,000,000? This doesn’t have as big of an impact as the term, but it does make a difference.

One of the best resources available to find good IRA rates can be found at a website called BankRate.com. Here’s what you do:

1. Select ‘High Yielding IRAs’ from the ‘Select a CD or IRA Product’ drop-down menu.


Find Best IRA Rates at BankRate.com

2. Click ‘Go.’

Best IRA Rates from thousands of providers

3. Select your term (how long you want to keep the money in the account) from the options.

Best IRA Rates With Laddered Terms

4. Click ‘Next.’

The results you get are the best IRA rates available in the market today. I’d be surprised if you find something higher than 4%. Of course, if you have a longer time horizon, or have a self-directed IRA, you can easily trounce these figures by 2-3x.

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