Current APY (1Y / 5Y)
5.10% / 4.40%
Charles Schwab IRA Brokered CD Review (2026)
TL;DR: Charles Schwab IRA brokered CD platform is functionally equivalent to Fidelity's — new-issue and secondary-market CDs from 20+ issuing banks inside any Schwab IRA wrapper. Rates ~4.30-5.10% across terms, 30-50 bps above direct-issued IRA CDs. FDIC-insured at the issuer, stackable across issuers. For 5-year IRA money, A-rated IRA MYGAs still pay more in the same tax wrapper.
Insurance
FDIC at issuer
Minimum deposit
$1,000 minimum
Early withdrawal penalty
Sell on secondary market
IRA wrappers offered
Traditional, Roth, SEP, Inherited
Schwab IRA brokered CD at a glance
Schwab's brokered CD platform sits inside any Schwab IRA (Traditional, Roth, SEP, SIMPLE, Inherited) and offers new-issue and secondary-market CDs from 20+ U.S. issuing banks. The platform is functionally equivalent to Fidelity's — same FDIC mechanics, same mark-to-market secondary-market behavior, same rate range, same $1,000 typical minimum.
Schwab's bond desk publishes a daily CD ladder tool that lets you build a custom ladder across maturities in one transaction. Useful for IRA buyers who want to construct a 5-rung 1-2-3-4-5-year IRA CD ladder for RMD coverage or income predictability.
Schwab IRA brokered CD rates (mid-2026)
| Term | New-issue APY range |
|---|---|
| 3 month | ~4.20-4.55% |
| 6 month | ~4.60-4.90% |
| 9 month | ~4.80-5.05% |
| 1 year | ~4.90-5.10% |
| 2 year | ~4.60-4.85% |
| 3 year | ~4.40-4.75% |
| 5 year | ~4.30-4.60% |
| 7 year | ~4.20-4.50% |
| 10 year | ~4.10-4.50% |
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 90–365 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.
Schwab vs Fidelity IRA brokered CDs — the real differences
From a buyer standpoint, the platforms are 95% equivalent. The remaining 5%:
- Schwab's ladder tool is slightly more intuitive for new buyers; Fidelity's is more powerful for advanced filtering.
- Fidelity's inventory is typically slightly deeper on small-issuer regional banks.
- Schwab's mobile app has cleaner brokered CD presentation; Fidelity's web platform has more analytics.
- Both charge zero commission on new-issue CDs and bake the spread into secondary-market pricing.
Pick the platform where your other retirement assets already live. The marginal rate difference between the two platforms is essentially zero on any given day.
When a MYGA beats an IRA CD
An IRA MYGA (multi-year guaranteed annuity) is, in plain English, a CD-equivalent issued by an insurance carrier instead of a bank. Inside an IRA wrapper, both are tax-deferred — the tax wrapper is identical. The difference is the rate, the insurance backing, and the surrender mechanics.
| Feature | IRA CD (bank) | IRA MYGA (insurance) |
|---|---|---|
| Typical 5 years rate (mid-2026) | ~4.40% | ~5.60% |
| Tax treatment inside IRA | Deferred | Deferred (identical) |
| Insurance / guaranty | FDIC $250K per depositor per bank | State guaranty fund, typically $250K–$300K per owner per carrier; backed by carrier balance sheet |
| Early access | Pay 90–365 days interest, get principal back | 10% free withdrawal annually most carriers; surrender charge on excess |
| Rate lock-in length | 3 months to 5 years typical | 3 to 10 years; 5-year is most common |
Worked example — $100,000 for 5 years:
- IRA CD at 4.40%: $124,023 at maturity
- IRA MYGA at 5.60%: $131,317 at maturity
- MYGA advantage: ~$7,294 over the 5-year period on the same starting balance
The rate gap exists because MYGA carriers hold longer-duration corporate bonds than banks hold; banks fund CDs primarily with short Treasuries. Inside an IRA — where you cannot use the principal for spending anyway until 59½ without penalty — locking up for the full term costs you nothing extra. The MYGA is structurally a better fit for IRA money the same way it is for taxable money, with one added consideration: the tax-deferred wrapper is "redundant" inside an IRA, but that does not make the MYGA worse — it just means you are paying for an insurance product purely on rate, not on tax shelter. And on rate, it usually wins.
See IRA CD vs MYGA decision guide and current best MYGA rates.
What happens at age 73 with RMDs?
Under SECURE Act 2.0, Required Minimum Distributions (RMDs) begin at age 73 for Traditional IRA holders (and SEP/SIMPLE IRA holders). Roth IRAs have no RMD during the original owner's lifetime. For an IRA CD, the practical issue is liquidity: if your full IRA balance is locked in a single 5-year CD, you may need to break the CD to take your RMD. Two solutions:
- Ladder. Hold multiple smaller CDs maturing in different years; pull RMD from the maturing rung. See IRA CD ladder strategy.
- RMD-friendly product. Most IRA MYGAs allow penalty-free withdrawal of the RMD amount each year — ask the carrier in writing before signing.
The honest verdict on Schwab IRA brokered CDs
Schwab's IRA brokered CD platform is competitive with Fidelity's at essentially every dimension. For 1-year IRA cash equivalents, the brokered CD platform delivers 30-50 bps more than direct-issued IRA CDs with full FDIC backing. For 5-year IRA money, the rate gap to comparable IRA MYGAs persists — an A-rated IRA MYGA at ~5.60% pays ~100 bps more than the best Schwab 5-year brokered CD at ~4.60% in the same tax wrapper.
Related guides
- IRA CD vs MYGA — which is better for retirement
- IRA CD ladder strategy
- How to rollover a 401(k) into an IRA CD
- Using IRA CDs to cover RMDs
- Inherited IRA CD rules (SECURE Act 10-year)
- Best MYGA rates — 2026
Second opinion before you commit IRA money
Independent licensed producer. Hans Goldstein.
IRA money is retirement money — one bad rollover or product pick costs you years. Before you lock a 5-year IRA CD or sign a MYGA application, get a written side-by-side comparison from a licensed independent producer who is not paid by the bank or the carrier you are considering.
Drop your info — within 24 hours you'll get a written rate comparison (IRA CDs vs IRA MYGAs at your term), the IRS rollover rules that apply to your situation, and a no-pressure 15-minute call if you want one.
Hans Goldstein · 213-414-2808 · NPN 20602398, independent licensed insurance producer appointed with multiple A-rated carriers
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Disclosure
This review reflects publicly available product materials and approximate rates as of the date stated 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.