One can roll over a traditional IRA into a CD. However if the IRA is transferred to a regular CD than you will owe early distribution penalty of 10% if you are under 59 1/2 years old. You will also owe income tax on such distribution amount.
Thank you. A follow on question is-- I believe a IRA benificary over 65 has just 5 years to withdraw all monies in the IRA, is that true? Also if the benificary or another non-related person is signed on to the account as a co-owner does that rule still apply
Is this an inherited IRA?
The IRA is an item in the IRA holders Will.
If the IRA is taken out by the owner than he does not have to take it out in 5 years since he is 65 years already. He can take out over a number of years. Note that the required minimum distribution will start when he is 70 1/4 years old.
sorry 70 1/2 years
OK, I understand the limatations for the origional owner. So if someone else becomes the new owner thru inheritance or a will etc and the new owner is 65 or older then their is no limitation on the time to withdraw except as stated for age 70 1/4 requirements.
If the IRA is inherited by a beneficiary(other than spouse) than he can rollover the entire funds directly to a INherited IRA account and withdraw the entire amount either within five years or "stretching" it over his life expectancy. He does not have to withdraw this over a 5 year period only.