Can I Split Up My IRA Between a Mutual Fund & a CD?

Individual retirement accounts offer a tax-advantaged way to save for retirement, and are easy to set up and manage for most people with minimal assistance. IRAs offer multiple investment options to suit most people's individual needs and allow you to split your investments in any way you choose. The trustee you choose will assist you when managing your investment choices, and it will ensure that you maintain the tax benefits of an IRA account.

IRA Basics

Compare an IRA to a truck hauling cargo. A truck may haul several different types of cargo, such as paper goods, food and other commodities, all in the same truck. An IRA can have many different types of investments, such as stocks, mutual funds and certificates of deposit, all in the same IRA. The IRA is a vehicle for these different types of investments.


The trustee is the person who oversees the IRA and makes the investments. It is similar to the driver of the truck, who picks up and drops off the cargo. The trustee accepts money from you, the owner of the IRA, and purchases the investments that you direct him to purchase. He manages the investments, and gives you a periodic accounting of their performance and value.

Choosing the Trustee

Many different kinds of people and institutions serve as IRA trustees, including banks, stockbrokers and mutual fund companies. Different trustees may concentrate on or specialize in different types of investments. Some of the biggest differences in trustees are the fee structures charged for services and the services offered. A bank trustee is able to offer CDs, and many banks also offer brokerage services, allowing you to purchase mutual funds right at the bank.


You may choose a self-directed IRA trustee, who can offer you access to non-traditional IRA investments and can also take care of splitting between a CD and mutual fund. Self-directed trustees tend to be more expensive and may not be necessary for a relatively simple transaction such as a split between a CD and mutual fund.