No that is wrong. An Individual Retirement Account is a type of account where you can buy anything you want. Depending on what types of risk and diversification you choose you can make anything from 30% a year to -100% a year. Many stocks, bonds, and mutual funds pay dividends or (interest).

I think you were talking about a CD Certificate of Deposit which pays between 3.40 and 4 percent interest. But if you were smart you would instead place your money in a Paypal account which is currently paying 4.75% interest. It is more of a money market account but your funds are very liquid unlike a CD which sometimes has 2 year contracts with penalties for early withdrawl. Find out some more here:

1. 16 Lifelong Investment Tips - Earn 12% a Year


2. How to Truly Diversify Your Investments


You may also want to check this out:

Difference between Roth and Traditional IRAs

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