IRA vs CD Comparison (Which One Fits Your Financial Goals?)

An Individual Retirement Account (IRA) is a tax-advantaged investment account designed to help you save for retirement. This means the government gives you a tax break because they know most people won’t save otherwise.

You put money in, invest it in stocks, bonds, mutual funds, or ETFs, and let it grow over time. Unlike a savings account that pays you pennies in interest, an IRA lets you build real wealth. This is more than the tiny $0.08 your bank gives you every year.

Let me show you how powerful this can be. If you invest $6,000 per year in an IRA starting at age 25 with an average 7% return, by the time you hit 65, you’d have around $1.4 million without doing anything fancy. Meanwhile, if you left that same money in a savings account earning 0.5% interest, you’d have about $300,000. The difference is a massive $1.1 million.