How to Transfer a Roth CD IRA from Bank to Fidelity Without Creating a Taxable Event?

What your bank suggested is technically a "rollover" (not a direct transfer), and yes, it can be non-taxable if handled correctly. But you need to be careful with the timing and documentation. The IRS gives you 60 days from the date you receive the funds to complete the rollover to the new Roth IRA. If you miss this deadline, it could be considered a distribution, which might have tax implications depending on your situation. Also, you can only do one IRA-to-IRA rollover in any 12-month period (this rule applies per person, not per account). For documentation, make sure you get statements showing the withdrawal from your bank CD IRA and the deposit into your new Fidelity Roth IRA. Keep copies of all paperwork and transaction confirmations. You'll need to report this rollover on your tax return, even though it's non-taxable. There's no tax withholding required since it's a Roth IRA, but the cleaner approach would actually be to request a direct trustee-to-trustee transfer instead of the rollover. Have you asked Fidelity if they can initiate the transfer from their end? That way the money never passes through your hands, which eliminates the 60-day worry and doesn't count toward your one-rollover-per-year limit.

I went through something similar last year with my Roth IRA. First, I tried doing it myself like your bank suggested and nearly messed up the whole thing. Then I found this service called taxr.ai (https://taxr.ai) that helped me understand exactly what paperwork I needed for a proper Roth IRA transfer. They analyzed my specific situation and gave me a detailed checklist of what forms to request from both financial institutions. The best part was they explained what each form was for in plain English and how to verify everything was being processed correctly. They even pointed out that my old bank was trying to code it as a distribution rather than a transfer! Their system checks all your documents to make sure they're correctly identifying the transaction as a transfer/rollover rather than a distribution, which saved me from a potential headache with the IRS.

Just wanted to follow up on my earlier question. I decided to try taxr.ai for my Roth CD IRA transfer and I'm really glad I did! My situation was almost identical to the original poster's - moving a CD to a brokerage firm. The taxr.ai system flagged that my bank was preparing to code it as an early distribution with penalties, even though it was eligible for transfer! They provided me with specific language to use with both institutions and templates for the transfer request letters. Everything went through smoothly with no tax issues. What really surprised me was how they spotted a detail about CD transfer protocols that my bank had wrong. The documentation they provided helped me confidently push back when my bank initially said I had to cash out first. Saved me from potentially missing that 60-day window!

After reading this thread, I want to share something that really helped me when I was struggling to get through to the IRS about my Roth IRA rollover that got misreported. I spent WEEKS trying to reach someone at the IRS to fix this exact issue when my previous bank miscoded my Roth IRA transfer as a distribution. I discovered this service called Claimyr (https://claimyr.com) that got me through to an actual IRS agent in under 30 minutes when I'd been trying for days on my own. They have a demo video too: https://youtu.be/_kiP6q8DX5c The IRS agent was able to correct the coding in their system and confirm that my rollover wasn't going to trigger any unexpected taxes. The peace of mind was totally worth it, especially when dealing with retirement accounts where the tax implications can be serious.

Alright, I need to apologize for my skeptical comment earlier. After my bank completely messed up coding my Roth IRA transfer AGAIN this week, I was desperate and decided to try Claimyr despite my doubts. It actually worked! Got a callback in about 25 minutes and was connected to an IRS agent who pulled up my account. She confirmed that the previous year's rollover was now showing correctly in their system but that the new one from this year was indeed being reported as a distribution by my bank. She walked me through exactly what forms I needed to request from both financial institutions and even gave me the specific codes that should appear on the forms. This saved me what would have been a massive headache at tax time next year. For anyone doing Roth IRA transfers like the original poster, getting that confirmation directly from the IRS gives you documentation to fall back on if questions come up later.

I think everyone's making this more complicated than it needs to be. I've done two Roth IRA rollovers in the past few years. Here's what worked for me: 1. Open the new Roth IRA at your target institution first 2. Ask the NEW place (Fidelity in your case) to initiate the transfer FROM the old bank 3. Fill out their transfer paperwork which will include the option to liquidate the CD 4. Let them handle all the communication and money movement This way, it's a direct transfer, no money passes through your hands, no 60-day rule to worry about, and no concerns about the one-rollover-per-year limit since direct transfers aren't subject to that rule. The only potential issue is if your CD has an early termination fee, but that's just a bank fee, not a tax issue.

One thing nobody's mentioned yet - make sure to check what fees your bank might charge for closing the CD early! My bank hit me with a $75 early termination fee plus I lost 3 months of interest when I did this last year. It wasn't a tax issue but still painful. Also make sure Fidelity isn't going to charge you a fee to receive the funds. Some places have transfer fees for smaller accounts.

Great discussion here! Just to add some clarity on the terminology - what your credit union is suggesting is indeed a "60-day rollover" which can be non-taxable, but it does come with risks that others have mentioned. However, I want to emphasize what Anastasia said about letting Fidelity initiate the transfer. This is called a "direct trustee-to-trustee transfer" and it's almost always the safer route. Even with CDs, most brokerages have standard procedures for this. Here's what I'd recommend: Call Fidelity back and specifically ask to speak with their IRA transfer department. Tell them you want to do a "direct trustee-to-trustee transfer of a Roth CD IRA" and ask if they have a form that includes liquidation instructions. Most major brokerages deal with CD transfers regularly and have streamlined processes. If for some reason Fidelity truly can't do a direct transfer, then yes, the 60-day rollover your bank suggested will work, but make sure you: 1. Get written confirmation from your bank that they'll report it as a rollover, not an early distribution 2. Complete the deposit to Fidelity within 60 days of receiving the funds 3. Keep all documentation for your tax records The direct transfer route eliminates the timing risk and doesn't count against your one-rollover-per-year limit.

I've been following this thread closely since I'm in a similar situation with a Roth CD at a local bank. Based on all the advice here, I called my target brokerage (Schwab) today and specifically asked for their "IRA Transfer Department" as Gianna suggested. The specialist I spoke with was incredibly knowledgeable and confirmed they handle CD liquidations as part of direct transfers all the time. She explained that they send a letter to my bank requesting liquidation and transfer of the proceeds, and the bank handles the CD closure on their end. The funds never pass through my personal accounts, so there's no 60-day clock or rollover limit concerns. She also mentioned something important that I haven't seen discussed here - make sure your CD is titled correctly as an IRA. If it's just a regular CD that you've been treating as retirement savings, the transfer process is different. But if it's properly titled as "John Doe IRA" or similar, then the direct transfer should be straightforward. The whole process is expected to take 2-3 weeks once they receive my completed paperwork. Much less stressful than the rollover route my bank initially suggested! Thanks everyone for sharing your experiences.