Hi,

I'd like to get my parents to become more tax-efficient by moving their money to a Roth IRA. However, they are very conservative investors, so I want to know if I can open a Roth IRA account at a bank and put the money into a FDIC-insured Savings or CD.

Most people assume IRAs can only invest in non-FDIC-insured investments (mutual funds, stocks, etc.) but I know that "Roth IRA" only denotes the type of (tax) account it is and the product you hold can (theoretically) be FDIC-insured if offered by the institution.

Does anyone know if any banks that do this?

Thanks.

Alex

I would recommend looking into alliants roth cd or savings decent rates and ncua insured

Motsuka is correct. Alliant CU is the answer. They offer the same savings yield in their IRA as they do their HYS account, which is currently 2%. For whatever reason, a lot of banks that offer HYS will offer much lower yields on Roth accounts, or only offer CDs (at poor rates) in Roth Accounts. Alliant offers the same HYS rate with the same liquidity and NCUA protection in the Roth as they do in taxable.

mttatkns said:SeattleNative said:Almost every bank offers FDIC-insured Roth IRAs as well as Traditional IRAs.Not true. While most larger banks certainly do offer these products, many smaller, community and online banks (which tend to offer the best rates) do not offer IRAs and even fewer offer Roths. Below are some of the better rates I have found:
Liquid:
3.0% NCSECU (If you can somehow manifest yourself as an employee of the state of North Carolina)

"Employees of Public Boards of Education" are eligible - not necessarily from NC. Seems like a nice score but not quite worth it to rate chase a few dollars from Alliant.

Thanks everyone for such quick responses. I'll look into the CUs to see if I qualify. Otherwise, I'll check with Wells Fargo, although my main bank is BofA.