Discover IRA CDs (September 2026): Moved to Axos Bank on September 21, 2026
Written & reviewed by Hans Goldstein, EA, independent licensed insurance producer · CA license 4273294 · NPN 20602398Admitted to practice before the IRS
Checked against capitalone.com/updates/discover/ira on September 24, 2026 · Updated
Discover IRA CDs are now Axos Bank IRA CDs. Capital One, which absorbed Discover on May 18, 2025, moved Discover IRAs to Axos Bank effective September 21, 2026. Your balance, accrued interest, APY, term, maturity date, beneficiaries and FDIC coverage are unchanged. There is no new Discover IRA CD to open, and the Axos products created for the move are not sold to the public.
Discover IRA transfer timeline
| Date | What happened |
|---|---|
| May 18, 2025 | Discover Bank merges into Capital One, N.A. (FDIC) |
| August 21, 2026 | New contributions to Discover IRAs no longer accepted |
| September 11, 2026, 11:59 pm ET | Deadline to request an option other than the Axos transfer |
| September 12, 2026 | Discover stops taking distribution requests and beneficiary changes ahead of the move |
| September 21, 2026 | Discover IRA CDs and IRA Savings become Axos Bank IRA accounts |
What to do with a former Discover IRA CD
- Before maturity: nothing is required. Your rate and term run to maturity as before.
- At maturity: decide before it renews at whatever Axos offers. Options are renewing at Axos, a trustee-to-trustee transfer to another bank's IRA CD, or a transfer to an IRA MYGA.
- Move money by transfer, not withdrawal. A direct trustee-to-trustee transfer is not taxable and avoids the 60-day rollover rules.
- Under 59½: a withdrawal (rather than a transfer) can trigger both the bank's early withdrawal penalty and the IRS 10% additional tax.
Where IRA CD money can go now (rates September 24, 2026)
| Option | 5-year rate | Protection |
|---|---|---|
| Navy Federal IRA certificate (members) | 3.85%-3.90% APY | NCUA |
| Best nationally available 5-year CDs (IRA versions vary by bank) | 4.35%-4.50% APY | FDIC/NCUA |
| IRA MYGA, A-rated-or-better insurers | ~5.50%-6.05% | Insurer + state guaranty association |
How IRA CD taxation actually works
This is the single most misunderstood point. An IRA CD is taxed like any other IRA asset, not like a taxable bank CD.
- Inside a Traditional IRA: Interest credited each year is not reported on your 1040. You do not get a 1099-INT for IRA CD interest. The CD compounds tax-deferred. You only owe tax when you withdraw, and withdrawals are taxed as ordinary income.
- Inside a Roth IRA: Interest is never taxed, provided your withdrawal is qualified (you are age 59½ or older and the Roth has been open at least 5 years).
- What you owe each year: Nothing. Zero. The annual 1099-INT that taxable CD holders receive does not apply to IRA CDs.
- What triggers tax: The withdrawal (Traditional) or a non-qualified Roth distribution. The CD's interest crediting cycle is irrelevant for tax purposes.
If you are under age 59½ and withdraw, two penalties can stack: the bank's early withdrawal penalty (typically 90 to 365 days of interest) and the IRS 10% additional tax on the withdrawn amount. The bank's penalty is enforced by the bank; the IRS penalty is enforced via Form 5329 on your tax return.
IRA CD vs. IRA MYGA
Inside an IRA, a CD and a MYGA both grow tax-deferred, so the tax advantage a MYGA has in a taxable account disappears. The comparison is rate and terms: roughly 5.50% to 6.05% on 5-year MYGAs from A-rated-or-better insurers versus 4.35% to 4.50% on the best 5-year CDs (September 24, 2026). On $250,000 over 5 years that gap is roughly $20,000 to $22,000 of extra growth before tax. The CD keeps FDIC insurance and usually a smaller early-exit cost; most MYGAs allow 10% a year free and satisfy RMDs.
Fixed annuity benchmark: carriers rated A or better topped out around 5.50% to 6.05% on 5-year compound-interest MYGAs, per public carrier rate sheets, October 14, 2026. Rates vary by state, premium and carrier.
Related: Discover CD rates (now Capital One) · Navy Federal IRA certificates · IRA CD vs MYGA
Discover IRA CDs: FAQ
What happened to Discover IRA CDs?
Capital One says Discover IRA CDs transition to Axos Bank IRA CDs effective September 21, 2026. The account type, balance, accrued interest, APY, term, maturity date, beneficiary designations and FDIC insurance coverage stay the same.
Can I still open a Discover IRA CD?
No. Discover no longer opens new CDs; its CD page redirects to Capital One 360 CDs. Capital One stopped accepting new contributions to Discover IRAs on August 21, 2026, and the Axos IRA products created for the transfer are not offered to the public.
Did I need to do anything for the transfer to Axos?
No action was required to move to Axos Bank. Customers who wanted a different option had to submit paperwork by September 11, 2026 at 11:59 pm ET. After the move, service requests go to Axos.
Is my Discover IRA CD still FDIC insured?
Yes. Capital One says FDIC insurance coverage is unchanged when the IRA CD moves to Axos Bank. Coverage is up to $250,000 per depositor, per ownership category, at the insured bank holding the deposit.
What should I do when my IRA CD matures?
Compare before it renews. You can keep it at Axos, or move it by direct trustee-to-trustee transfer (not a withdrawal) to another IRA CD or to an IRA multi-year guaranteed annuity. A trustee-to-trustee transfer is not taxable and does not count as a 60-day rollover.
Does an IRA MYGA pay more than an IRA CD?
Often. On October 14, 2026 A-rated-or-better insurers paid roughly 5.50%-6.05% on 5-year MYGAs, versus 4.35%-4.50% on the best nationally available 5-year CDs. Inside an IRA both grow tax-deferred, so the comparison is rate, surrender terms and protection (FDIC versus insurer and state guaranty association).
My take
Your Discover IRA CD is now an Axos Bank IRA CD with the same rate and maturity. Nothing is needed until it matures; at maturity, move it by trustee-to-trustee transfer to whatever pays best for your time horizon, and include an IRA MYGA quote in that comparison.
Hans Goldstein is an independent licensed insurance producer (CA license 4273294, NPN 20602398) and is not affiliated with Discover, Capital One or Axos Bank. Rates are copied from the sources named, as of the date shown; confirm the current rate before opening. MYGA figures are illustrations, not quotes.
Disclosure
This review is based on the carrier's public product materials and rates as of the date shown above. CD rates, IRA account fees, MYGA crediting rates, and IRS rules cited (RMD age 73 under SECURE 2.0, 10% early withdrawal penalty before 59½, Roth 5-year qualified distribution rule, post-2019 SECURE Act 10-year rule for non-spouse inherited IRA beneficiaries) are current as of the publication date and subject to change. Always confirm current rates with the issuer and current tax law with a CPA before opening, rolling over, or withdrawing from any IRA. This article is general information for educational purposes; it is not a personalized recommendation, tax opinion, legal opinion, or offer of any specific product. Hans Goldstein is an independent licensed insurance producer (NPN 20602398) appointed with multiple A-rated annuity carriers; he does not sell bank CDs and is not affiliated with any bank, credit union, or brokerage discussed in any review on this site. No compensation has been received from any bank, credit union, or brokerage in connection with this review. MYGAs are insurance products with surrender charges; bank CDs are FDIC-insured deposit products; credit union CDs are NCUA-insured share certificates. These are different product categories with different protections and trade-offs.