Something that seemed a bit strange happened at my credit union that involved a Roth IRA-to-Traditional IRA recharacterization.

Here are the details:

1. There was an existing 72-month Roth IRA CD paying 3.5% opened with $5,500 on 3/20/2019, which had a value of $6,292.09 on 2/14/2023.

2. A $6,000 60-month Roth IRA CD paying 5.0% was opened on December 28, 2022.

3. The 60-month CD was recharacterized on 2/14/2023 from a Roth IRA to a Traditional IRA.

4. The “IRA Deposit” into the recharacterized IRA was $6,115.15 on 2/14/2023.

5. A $76.52 “withdrawal” was made from the 72-month Roth IRA CD on 2/14/2023 (Note: I wasn’t aware of this until I saw it this morning. I just figured out that this ended up being part of the $6,115.15 “Deposit” into the Traditional IRA).

5.0%/year x $6,000 x 48 days ÷ 365 days/year ~ $39.45 accumulated interest between December 28, 2022 and February 14, 2023. So, it appears that $76.52 in interest from the 3.5% Roth IRA CD plus $38.63 in interest from the 5.0% was added to the December 28th CD at the time it was recharacterized.

Does this have something to do with all of the money you have in a Roth IRA being considered a single Roth IRA, or do you think the credit union handled this improperly?

Thanks.