(MONEY Magazine) – As the april 17 deadline for 1994 individual Retirement Account contributions nears, many banks are trying to woo retirement savers by touting special rates on certificates of deposit for IRAs. New York City's Chemical Bank, for example, recently pushed a one-year IRA CD yielding 6.28%--more than half of a percentage point above the 5.68% that the bank pays on a regular CD.

But whether you're making a new IRA contribution or rolling over money in an existing IRA account, don't be too quick to jump at the first IRA CD that comes your way. By widening your scope to include banks outside your immediate area, you can often grab premium yields that easily top local banks' supposedly sweet deals. For example, AFBA Industrial Bank--which is located in Colorado Springs but offers its CDs nationwide--recently paid an alluring 7% for its one-year IRA CD, at least half a percentage point more than you can get from many local banks. For a list of banks around the country that offer the highest yields on IRA CDs, see the table at left.

Whether you find the best rates down the block or a thousand miles from home, however, you must still grapple with one central question before plunking your retirement money into a CD: How much, if any, of your long-term savings belong in fixed-income investments? Financial planners generally recommend that young investors stash almost all their retirement money in stocks and stock mutual funds. But if you have already retired or are nearing retirement, then CDs represent an excellent way to generate steady, secure returns--and add stability to the stock and bond portions of your portfolio. "With yields close to 7%," says Bloomington, Minn. financial planner Robert Steffen, "CDs are definitely a safe and attractive addition to the fixed-income portion of your IRA."

--Ellen Stark