When I heard Navy Federal Credit Union was offering a 3% 37-month CD, which was only available in an IRA or ESA (Coverdell Education Saving Account), I decided to move part of my Traditional IRA from Fidelity to this CD. The yield on 3-year Treasury notes was about 1.4% at the time. I could just buy a CD in the brokerage account, but the best available 3-year brokered CD paid only 1.85%. A CD directly from a credit union paid much better. I’m writing down the transfer process in case you are curious how a partial transfer of an IRA from a broker to a credit union works.
I was already a member of the credit union. In order to transfer an IRA, I filled out an IRA Transfer form from the credit union. The form had an option to request a wire transfer from the current custodian. I marked that option, signed it, scanned it, and attached it to a secure message in online banking. The credit union’s customer service messaged back saying I should open an IRA Savings Account first, which I did online, with $0 funding, because I was not making a new IRA contribution. After I messaged customer service again, the representative said they were going to send the transfer paperwork to Fidelity by mail.
While the paperwork was in transit, I made the transfer amount available as cash in my Fidelity IRA. On the 6th business day after the credit union’s customer service said they were going to mail the paperwork, I received an alert from Fidelity saying that they received a transfer request. Fidelity sent the cash to the credit union by wire (free of charge) on the same day.
I saw the cash in the IRA Savings Account the next day. I opened a CD online, using the IRA Savings Account as the source of funding. That was it. I had the CD in an IRA at the credit union in a little over a week.
The transfer process is very easy if you are already a member of the credit union. If you must apply for new membership, it will add a few more steps. Still, you only do it once and then you are set for the next few years. If you see a good CD for your IRA, don’t be afraid to do a partial transfer.