IRA CD's - And Early Withdrawl Penalty

bobert | Jul 1, 2011 | 19 posts since 2010

I understand that SOME financial institutions may waive the early withdrawl on an IRA CD if the customer is over 59 1/2.

Does anyone (?KEN) know if any of the larger ones mentioned on Depositaccounts.com have this policy. This might include ALLY, DIME, and even Fort Knox FCU?

Post an answer

Answers

Ally6770 | Jul 2, 2011 | 2,316 posts since 2010

I believe that they meant to redeem the whole CD early. Pen Fed before Sept 2007 used to let us cash in our IRA CD once a year if you were 59 1/2 or older to get higher rates with no penalty. We only could do that one more time until maturity on the CD's opened before Sept 2007.

Ken Tumin | Jul 1, 2011 | 5,919 posts since 2009

PenFed mostly waives the EWP for CD IRAs for those over 59 1/2. I have more details in this PenFed blog post.

Unfortunately, Ally Bank does not. It's only waived for RMD which I don't think kicks in until 70 1/2. I have more details in this Ally IRA blog post.

bobert | Jul 2, 2011 | 19 posts since 2010

Penfed is no longer allowing penalty free withdrawls on IRA CDs opened after Sept 2007.

Ken Tumin | Jul 2, 2011 | 5,919 posts since 2009

As I mentioned in that PenFed post, they still allow partial withdrawals on IRA CDs for those over 59 1/2. This was based on a 2009 disclosure, so I checked to see if there are any changes in the latest disclosure. It appears to have the same 4 early withdrawal exceptions (see page 18) with the 4th one is "(iv) If the owner has reached age 59½ and takes a partial withdrawal."