When an IRA account is opened initially, it is common for investors to purchase high interest assets with their retirement money. They often will pick out a few mutual funds or a mix of stocks to invest in, and regular IRA contributions may go towards purchasing additional shares of these investments. From time to time, the funds or stocks purchased may change. Over time, however, it is common for an investor to begin to think about diversification of his or her portfolio. With a greater account value and much of that account invested heavily in the Stock Market, an investor may realize he or she has much to lose if the stock market plunges. CDs are often purchased to reduce the overall risk of a retirement account. However, you may wonder why CD IRA rates are so low.Guaranteed Rate of ReturnAn important thing to consider when shopping for CD IRA rates is that these are investments with a guaranteed rate of return. At the present time, it may be difficult to find a CD with an interest rate over two percent. However, this is guaranteed growth. The rate of return on your stocks and bonds may historically be much higher than this, but there is no guarantee that these assets won't decrease significantly in value at a moment's notice. Those who invest in CDs will accept a lower rate of return in exchange for the guaranteed preservation of assets.Percent of Your PortfolioUnless you are nearing retirement, the allocation of your portfolio for CDs is likely very small. Most investors want to continue to grow their account balance quickly, and this typically means investing heavily in mutual funds and stocks. CDs are purchased by most investors who are not nearing retirement as a means to decrease risk and preserve capital. The growth is slower, but it guarantees that some of the account balance will not be lost if the stock market does crash. If you are nearing retirement, the lower risk of CDs can preserve your account balance while enabling funds to grow more quickly than they would with other types of low risk investments.