How to Change an IRA CD to a Regular CD
- 1). First determine if the IRA is a Traditional IRA or a Roth IRA, what the principal amount deposited was (this may be the total of several years of annual contributions, depending on how old the CD is) and how much interest has accrued in the account.
- 2). Take the information obtained in Step 1 to your tax adviser, and find out what the exact tax consequences of an IRA withdrawal will be. Distributions taken from a Traditional IRA must be added to your adjusted gross income on your tax return, regardless of what the principal amount is. Additionally, if you are younger than 59½, you may be assessed a 10% penalty for taking money out early. Roth IRAs generally must be held for at least five years and until age 59½ before making withdrawals, but ask your tax adviser how a Roth distribution will affect your taxes.
- 3). Go to the bank where you have the IRA CD and meet with a customer service representative. Provide the CD's account number and fill out a distribution form for the amount (total or partial) that you want to pull out of the IRA. Deposit the distribution into your checking account.
- 4). Ask the bank representative to open a regular CD for the maturity term and dollar value you want. Sign the paperwork and fill out a withdrawal form or write a check to make the deposit into the new CD.
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