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I have a beneficiary IRA CD hitting maturity tomorrow with Chase bank. This is an IRA that I inherited when my mother passed away in 2001. At the time I was told that some distribution must be taken and that I could not just leave it be. So I started the required minimum distribution and receive about $1500 (taxable) each December.

This 12 month CD has paid about 1.5% or so each year but Chase says the current rates going forward are in the .20-.50% range.

I'm trying to decide what to do here and am unclear if I can legally roll this thing over into some sort of money market, which is what the Chase manager is suggesting. I assume that the RMD is required to continue because it is a beneficiary IRA? But how would that work with a money market? Will the IRS view this as redeeming the IRA and tax on the full amount accordingly?

The other thing we are considering is redeeming the CD, taking the 9K tax hit and paying down our mortgage, or adding some from savings and paying off the 5.35% 15 year note altogether.

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