What's the difference between an individual retirement account (IRA) and a certificate of deposit (CD)?


An individual retirement account (IRA) is a type of account.  A certificate of deposit (CD) is a type of investment.  Therefore you could open an IRA Account, deposit funds into this account and then buy a CD in the account.  If you have a CD at a bank or brokerage firm and want to use the money to make your deposit into an IRA, you would have to cash it out first, put the money into the IRA and then buy a new CD.