SAVINGS: THE SIX BEST IRA DEALS PAY MORE THAN 9%
By Editor: Pauline Tai Reporter associates: Beth M. Gilbert and Elizabeth MacDonald

(MONEY Magazine) – If you aren't earning at least 9% on your IRA account, take a close look at the accompanying table. It lists six of the highest-yielding CDs available to IRA savers. Many institutions literally bank on their customers' complacency; they figure most won't bother to shop for a better deal. You should, of course. For example, both Sunbelt Savings and Home Savings offer a one-year IRA CD that yields 9.04%. Charter S&L offers an 18-month CD at 9.28%, and Far Western Bank has a five-year CD at 10.03%. Note that you have up to 60 days once a year in which to make a tax-free transfer from one IRA account to another. The Tax Reform Act of 1986 has eliminated the deductibility of IRA contributions for anyone covered by a retirement plan, as well as those with adjusted gross incomes in excess of $35,000 for singles and $50,000 for married couples who file jointly. You can, however, still contribute up to a nondeductible sum of $2,000 (or $2,250 with a nonworking spouse) by April 15; the IRA income would continue to accrue tax deferred until you withdraw it beginning at age 59 1/2. Although interest rates rose slightly in December, they are expected to be stable this year. Between now and late spring, rates may fluctuate about one- tenth of a point, then rise a bit between April and June because of rising mortgage demand, and then end the year at around current levels, or perhaps a bit lower.

CHART: TEXT NOT AVAILABLE CREDIT: NO CREDIT CAPTION: NO CAPTION DESCRIPTION: Examples of best IRA investments.