While an individual retirement arrangement account is a long-term investment, your relationship with your IRA trustee can be changed while keeping the contents of your account, including its certificates of deposit, intact. You may want to do this if your trustee offers substandard service, or you may have moved and decide you want your IRA managed closer to home. The restrictions on how often you can make an IRA transfer depend on the type of transfer.
With the Same Trustee
If you are transferring an IRA CD with the same financial institution or with the same trustee, the number of times you can transfer the IRA CD within a specific time frame is not restricted by tax law. Internal transfers done this way are not rollovers and do not need to be reported to the Internal Revenue Service.
Trustee to Trustee
If you are transferring a CD held in an IRA from one trustee to another, it is considered a transfer under IRA regulations. While you will need to report the transfer on your yearly income tax forms, the trustee-to-trustee transfer is a tax-free event. These types of transfers are also not restricted by time period, so you can complete more than one trustee-to-trustee transfer per year if you like.
You can take a more direct approach to transferring IRA assets by using a tax-free rollover. In this case, you request either a withdrawal from your IRA account or for the trustee to send you any of the assets the account holds, such as stock certificates or CDs. You have up to 60 days to place these assets into another IRA account of the same type or back into the same account; if you make the transfer more than 60 days after the withdrawal, you have to pay taxes on the value of your withdrawal. You can only perform a tax-free rollover with the involved accounts once per year, and the clock starts ticking when you withdraw the funds.
With certificates of deposit, you will usually incur a penalty for early withdrawal of the funds if you take the money out before the certificate's maturity date. You will have to pay this penalty regardless of the tax-free status of your rollover. You can avoid this penalty by transferring the actual certificate from one trustee to another rather than withdrawing the money and redepositing it into a new CD.