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?

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Answers

Ally6770 | Jul 2, 2011 | 2,376 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 | 5,945 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 | 5,945 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."