To take a required minimum distribution from an IRA CD, divide the CD’s December 31 balance from the prior year by the IRS life expectancy divisor for your age, then withdraw at least that amount by December 31 of the current year (or by April 1 of the following year if it’s your first RMD). The complication unique to CDs is timing: if the CD hasn’t matured, breaking it early can cost you several months of interest unless your bank waives the penalty for RMDs. You can sidestep that by pulling the required amount from a different traditional IRA instead.
The requirement applies once you turn 73 if you own a traditional IRA, SEP IRA, or SIMPLE IRA. Roth IRA CDs are exempt during the owner’s lifetime, so if your CD sits inside a Roth, you can stop reading here for your own account.1Internal Revenue Service. Retirement Plan and IRA Required Minimum Distributions FAQs
Calculating the Amount
Take the total value of the IRA on December 31 of the previous year and divide it by the divisor for your age from the Uniform Lifetime Table in IRS Publication 590-B.2Internal Revenue Service. 2025 Publication 590-B – Distributions From Individual Retirement Arrangements For an IRA CD, that balance includes all accrued interest through December 31, including interest that hasn’t yet been credited to your statement. Your custodian reports the year-end value to you and the IRS on Form 5498.
The divisors at common RMD ages:
- Age 73: 26.5
- Age 74: 25.5
- Age 75: 24.6
- Age 76: 23.7
- Age 77: 22.9
An IRA CD worth $150,000 on December 31 held by someone turning 74 produces an RMD of $150,000 ÷ 25.5, or $5,882.35. One exception to this table: if your sole beneficiary is a spouse more than ten years younger than you, you use the Joint Life and Last Survivor Expectancy Table instead, which yields a larger divisor and a smaller required amount.2Internal Revenue Service. 2025 Publication 590-B – Distributions From Individual Retirement Arrangements
When the Money Has to Be Out
Every year’s RMD is due by December 31. The one exception is your very first RMD, which you can delay until April 1 of the year after you turn 73.1Internal Revenue Service. Retirement Plan and IRA Required Minimum Distributions FAQs
Delaying that first one creates a tax squeeze worth thinking about. If you push your first RMD into the next calendar year, you’ll take two RMDs in the same year: the delayed one by April 1 and the current year’s by December 31. Both count as taxable income in that year and can push you into a higher bracket. Run the numbers before deciding to defer.
The starting age is scheduled to rise to 75 for people who turn 74 after December 31, 2032.
The CD Maturity Problem
This is the piece specific to IRA CDs. A standard CD locks your money for a fixed term and charges an early withdrawal penalty, typically several months of interest, if you break it before the maturity date.
Some banks waive that penalty when the withdrawal is specifically taken as an RMD. This is a bank policy, not a legal requirement. No federal rule forces banks to treat RMD withdrawals differently from any other early break. Whether you’ll be charged depends on your CD agreement and the institution’s practices. Before opening an IRA CD, ask the bank directly whether they waive early withdrawal penalties for RMDs, and get the answer in writing.
If your bank does offer a waiver, make sure the withdrawal request is clearly designated as an RMD. Without that label, the bank’s system may process it as an ordinary early withdrawal and deduct the penalty automatically. Fixing that afterward is possible but slow.
Planning around maturity dates helps. A CD ladder, where you stagger maturities so one CD comes due each year, gives you a liquid source for the annual RMD without breaking terms early. Splitting $100,000 across five CDs maturing in one through five years, then rolling each matured CD into a new five-year term after taking that year’s RMD, is one common structure. Some IRA owners also keep a portion of the account in a money market fund or savings account earmarked for RMDs, accepting a lower rate in exchange for never facing an early withdrawal penalty.
Pulling from a Different IRA Instead
The IRS lets you calculate the RMD for each traditional IRA separately but withdraw the combined total from any one of them, or from a combination.3Internal Revenue Service. RMD Comparison Chart (IRAs vs. Defined Contribution Plans) If you have an IRA CD at a bank and another traditional IRA in a brokerage account, you can leave the CD alone and take the full RMD from the brokerage side.
The CD’s balance still counts in the calculation. You just don’t have to physically pull from the CD. Aggregation works only within the same account type: you cannot use a traditional IRA distribution to cover a 401(k) RMD.3Internal Revenue Service. RMD Comparison Chart (IRAs vs. Defined Contribution Plans)
Making the Withdrawal Request
Contact your bank or custodian to request an RMD distribution. Most institutions accept the request online, by phone, or in person, and they’ll have you complete a distribution form specifying the account and the CD.
You’ll also make a federal tax withholding election on IRS Form W-4R.4Internal Revenue Service. 2026 Form W-4R – Withholding Certificate for Nonperiodic Payments and Eligible Rollover Distributions If you don’t submit the form or don’t choose a rate, the default withholding is 10%. You can pick any rate from 0% to 100%. People who don’t already make quarterly estimated payments often withhold enough to cover the tax owed on the distribution itself.
Come tax time, your bank will send Form 1099-R showing the gross distribution and any federal tax withheld.5Internal Revenue Service. 2025 Instructions for Forms 1099-R and 5498 The full amount of a traditional IRA RMD is generally taxable as ordinary income on your Form 1040.6Internal Revenue Service. Retirement Plans FAQs Regarding IRAs Distributions (Withdrawals) If you ever made nondeductible traditional IRA contributions, part of the distribution may be tax-free, and you’ll calculate that on Form 8606.7Internal Revenue Service. Reporting IRA and Retirement Plan Transactions Most states with income tax also tax IRA distributions, though some offer partial exclusions for retirement income.
Sending the RMD to Charity Instead
If you’re at least 70½, a qualified charitable distribution lets you send up to $111,000 in 2026 directly from your IRA to an eligible charity, and that transfer counts toward your RMD while staying out of your taxable income.8Internal Revenue Service. 2026 Amounts Relating to Retirement Plans and IRAs, as Adjusted for Changes in Cost-of-Living (Notice 2025-67) The custodian has to send the funds directly to the charity; if the money touches your hands first, it doesn’t qualify.9Office of the Law Revision Counsel. 26 USC 408 – Individual Retirement Accounts Keeping the distribution out of adjusted gross income can help you stay below thresholds affecting Medicare premium surcharges and the taxability of Social Security. The CD maturity issue still applies: if the CD hasn’t matured, the same early withdrawal penalty rules govern the QCD.
If You Miss the Deadline
The excise tax on a missed or short RMD is 25% of the amount you failed to take.1Internal Revenue Service. Retirement Plan and IRA Required Minimum Distributions FAQs Withdraw $3,000 when you owed $6,000, and the penalty is $750 on top of the ordinary income tax you’ll owe when the missing $3,000 eventually comes out.
The rate drops to 10% if you correct the shortfall within a window that ends by the close of the second tax year after the penalty year.10Internal Revenue Service. Instructions for Form 5329 (2025) To claim the reduced rate, take the missed amount out and file Form 5329 reflecting the additional tax.
You can also request a full waiver by showing the shortfall resulted from reasonable error and that you’re fixing it. Attach a written explanation to Form 5329, enter “RC” and the shortfall amount on the dotted line next to line 54a or 54b, and file it with your return.10Internal Revenue Service. Instructions for Form 5329 (2025) The IRS reviews these individually. A custodian’s miscalculation, a death in the family, or serious illness are the kinds of situations that tend to work. Catching the mistake yourself and withdrawing the money promptly also helps.
If You Inherited the IRA CD
Different rules apply to inherited IRAs. Most non-spouse beneficiaries of someone who died after 2019 must empty the account within ten years.1Internal Revenue Service. Retirement Plan and IRA Required Minimum Distributions FAQs Whether you must also take annual distributions during those ten years depends on whether the original owner had begun RMDs before death. Surviving spouses have the additional option of rolling the inherited IRA into their own IRA, which resets the RMD clock to their own age-73 start. The CD maturity problem persists in either case: if you inherit an IRA holding a recently issued five-year CD, you may have to wait for maturity or accept the early withdrawal penalty even as the ten-year clock runs.