Tradional IRA investment in CD

Hi Terry,
I wanted to ask if you believe that leaving an IRA in a liquid Internet acct. @ .95% is a wise thing to do ? This same bank ( CIT ) has what is called an “Achiever ” IRA acct.
It offers a 2 yr. IRA CD @ 1.20 %. If, during this 2 yr. time the rate increases ,you can bump up one time only.
Would this be a reasonable move to make ?
I would appreciate your thoughts.

Terry Says:  Depending on your age, stage of life, this may make some sense. Just make sure you are getting an FDIC-INSURED CD, and not some other product.  But if you will read the latest column on my website, you will see that this decision must be made on the context of your entire IRA investment picture, which will take into account your need both for long term growth (to offset future inflation) and needs for liquidity for mandated withdrawals.

Just to reiterate, an FDID insured, short-term CD is  OK for chicken money in an IRA. But I don’t think they are giving you enough of a premium for locking your money up for two years — though you do get that one-time bump up!