IRA CD Calculator
Inside an IRA, a CD grows free of annual tax. Whether Traditional or Roth wins comes down to your bracket now against your bracket later.
What the IRA wrapper is worth on a CD
Outside an IRA, a 24%-bracket saver hands roughly a quarter of each year’s CD interest to tax as it is credited. Inside one, the interest compounds untouched — on a $7,000 contribution at 4.30% across 15 years the wrapper is worth about $1,800 of avoided drag before any withdrawal tax (the calculator prints the exact figure for your inputs). CDs suit IRA money that is close to being spent: the years either side of retirement, when a stock decline has no time left to recover.
IRA deposits also occupy their own $250,000 insurance category, separate from your regular accounts at the same bank — occasionally handy for keeping a large balance fully covered at one institution.
Traditional or Roth, settled by one comparison
Same pre-tax money, same CD, same rate — the only variable is when the tax lands. Traditional defers the tax and charges it at your retirement bracket; Roth charges it up front at today’s rate and invests what remains. Expect a lower bracket later (as most people do) and Traditional edges ahead; expect a higher one and Roth does. At identical brackets they tie to the penny, which the calculator will happily show you. (Contributing the same nominal amount to each is a different comparison, and the result says so.) Everything else written about this choice is elaboration.