Best 1-Year CD Rates Of April 2024 (2024)

We’ve compared 142 CD accounts at 84 nationally available banks and credit unions to find some of the best one-year certificates available. See below to learn more about why we picked each account, the pros and cons, and to access individual bank reviews.

Annual percentage yields (APYs) and account details are accurate as of April 15, 2024.

To create this list, Forbes Advisor analyzed 142 CD accounts across 84 financial institutions, including a mix of traditional brick-and-mortar banks, online banks and credit unions. For the star rating, we ranked each institution on 11 data points within the categories of APY, minimums, compound interest schedule, customer experience, digital experience, available terms and overall availability. We also analyzed and ranked each institution by individual term.

The following is the weighting assigned to each category:

• APY: 50%
• Customer and digital experience: 20%
• Minimum deposit requirement: 12.5%
• Compound interest schedule: 7.5%
• Availability: 5%
• Available terms: 5%

CD accounts with higher APYs rose to the top of the list. Minimum deposit requirements of $10,000 or higher affected scores negatively. Accounts with daily compounding interest schedules were scored higher than those with monthly or quarterly schedules. To appear on this list, the account must be nationally available.

To learn more about our rating and review methodology and editorial process, check out our guide onHow Forbes Advisor Reviews Banks.

• Current 1-Year CD Rates
• How To Find the Best 1-Year CD Rates
• What Is a 1-Year CD?
• How Does a 1-Year CD Work?
• Pros and Cons of 1-Year CDs
• How To Choose a 1-Year CD
• How To Open a 1-Year CD
• Alternatives to 1-Year CDs
• Is a 12-Month CD Worth It?
• Banks We Monitor

One-year CD rates are still high. According to data from the St. Louis Federal Reserve, the average interest rate paid on CDs went up six-fold in 2022 and stayed high throughout 2023, with competition among banks pushing them even higher. The best one-year CD rates today top 5.00% APY.

Some experts believe that CD rates have topped out, but this largely depends on what action the Federal Reserve takes with regard to the federal funds rate in the coming months.

If you take the time to shop around, you’ll realize that many financial institutions offer rates far above the national average rate.

Our article on the 10 best CD rates can be an excellent place to start if you’re looking for banks and credit unions offering the highest APYs. The aforementioned CD accounts are options worth considering as well.

When comparison shopping, don’t forget to consider fees and penalties associated with the CD account, as they may eat into your earnings over the term of your investment.

When you invest your money in a one-year CD, you make a deposit, known as the principal, into an account and agree to keep that money in the account for one year. In exchange, your bank promises to pay you a fixed APY for the entire year. Most CDs have a minimum deposit amount, and some banks offer higher interest rates to investors who deposit more money.

During the course of the year, your bank pays interest on your principal. If a bank pays compound interest—most banks do—the amount of money you earn each month grows exponentially. If you decide to withdraw your money early, most banks will require you to pay an early withdrawal penalty.

At the end of your one-year term, you can withdraw the principal and interest earned from your CD. Sometimes your bank will send you a check or deposit the money from the CD into a linked checking or savings account. Many CD contracts roll over, meaning your principal and interest may be automatically invested into a new CD. Your bank is required to send you a notice before your CD’s term ends and tell you whether it will renew automatically.

Before you open a one-year CD, it helps to know the pros and cons so you can choose the CD term that best fits your savings goals.

Pros

• Offers higher interest rates than some other CD terms. A one-year CD typically offers a higher interest rate than shorter-term CDs, such as three-month CDs and six-month CDs.
• Offers higher interest rates than traditional savings accounts. By committing your funds for a year, you can potentially earn more interest than you would if you left the money in a traditional savings account at a brick-and-mortar bank.

Cons

• You could miss out on higher rates. If interest rates are rising during your CD term, you could miss out on higher savings rates. A shorter-term CD could help you take advantage of interest rate hikes.
• You could get hit with an early withdrawal penalty. Unless you have enough in liquid savings to fund emergencies, tapping your one-year CD before the term is up could cost you an early withdrawal penalty.

A one-year CD is one of the most popular term length options: It’s a finite enough period of time to be asked not to touch your money and yet it’s long enough for you to earn some decent returns. With any CD, consider carefully whether you can afford to lock up your savings for the specified period of time:

• APY. Obviously, the interest or dividend rate you earn matters. What APY will you receive on your CD or certificate? You’re essentially locking up this money for a one-year period, so you’re risking having interest rates rise while you’re locked in to a lower rate.
• Compounding schedule. To receive the best return on your investment, look for interest or dividends to be compounded on a daily basis, rather than monthly or even quarterly.
• Safety. Look for financial institutions that are insured by the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA). In the event of a bank or credit union failure, your deposits would be insured for up to $250,000 per account for each account ownership category.
• Early withdrawal. Another important issue is the CD’s early withdrawal penalty. An early withdrawal penalty could decrease your interest or dividend earnings if you need to access your principal before the one-year maturity date. Some banks impose withdrawal penalties that could not only reclaim any interest earned but also reduce your principal balance.
• Term. Be sure you won’t need access to the funds during those 12 months. If you believe you could need to withdraw funds before the CD’s maturity date, a savings account or money market account may be your better savings option.

The process to open a one-year CD is fairly straightforward.

First, you’ll need to open an account at the financial institution where you want to get a CD. If it’s a credit union, you’ll need to become a member before you can access any of its products.

After your account is open, fund the account with the amount you want to invest. You can generally do this via check, ACH transfer or wire transfer.

Finally, you’ll need to sign the CD account agreement. Once you do, your CD term begins and your account begins accruing interest.

One-year CDs aren’t always going to be a good fit for your savings goals and spending habits. Consider the following alternatives to one-year CDs if you want to explore more options for earning.

1-Year CDs vs. Other CD Terms

If you like the idea of earning a competitive interest rate on your savings but don’t want to lock your money up for a year, you might consider shorter-term CDs instead. Many banks offer six-month CDs or even three-month CDs for people who want access to funds sooner rather than later. However, shorter terms may earn lower rates.

If one year isn’t enough time and you’d prefer to earn a guaranteed interest rate for longer, explore long-term CDs for two, three, five or 10 years. Also, 18-month CD rates are often comparable to one-year rates.

1-Year CDs vs. High-Yield Savings Accounts

If you’re looking to earn interest on your savings and want the security of FDIC insurance, you could also consider a high-yield savings account. High-yield savings accounts have variable interest rates that track market rates and allow you to access your cash anytime. Some high-yield savings accounts have transaction limits, so if you need to access your cash more than a few times a month, be sure to check the terms and conditions to ensure you won’t pay a fee.

1-Year CDs vs. High-Yield Checking Accounts

High-yield checking accounts are also an option if you need to access your money regularly, but those typically pay less interest than a high-yield savings account. Some high-yield checking accounts have requirements to earn interest, such as a certain number of debit card purchases each month, or they only pay the highest interest rate on a portion of your balance, so be sure to check the details before going this route.

1-Year CDs vs. I-Bonds

If you’re looking for secure returns on your savings and want protection from inflation, take a look at series I bonds. Series I bonds offer both a fixed interest rate and a rate that changes with inflation and is adjusted twice a year. There’s no option to cash out your series I bonds until one year after purchase. If you cash out an I bond before five years, you’ll pay a penalty of three months of interest. Series I bond purchases are limited to $15,000 per person, per year.

A 12-month CD can be a worthwhile investment if you’re seeking guaranteed growth and are able to keep your money invested for a year. Before investing, be sure you’re getting the best one-year CD rates by shopping around and comparing rates from different banks.

If there’s a good chance you’ll need to access your cash within a year, a high-yield savings account is probably a better option. If you can afford to keep your money tied up for longer, longer-term CDs may offer higher rates.

These financial institutions were included in our research for the best CD rates: ableBanking, Affinity Federal Credit Union, Ally Bank, American Express, Axos Bank, Apple Federal Credit Union, Bank of America, Bank5 Connect, BankDirect, BankPurely, BankUnitedDirect, Barclays, Bethpage Federal Credit Union, BrioDirect Banking, Capital One, Charles Schwab Bank, Chase, Chevron Federal Credit Union, CIT Bank, Citibank, Citizens Access, Colorado Federal Savings Bank, Comenity Direct, Comerica, CommunityWide Federal Credit Union, Connexus Credit Union, Consumers Credit Union, Credit Union of Denver, Discover, Dollar Savings Direct, EmigrantDirect, Financial Partners Credit Union, Financial Resources Federal Credit Union, First National Bank of America, Georgia’s Own Credit Union, Golden1 Credit Union, Greenwood Credit Union, HSBC Direct, Hughes Federal Credit Union, Ideal Credit Union, iGoBanking, Investors eAccess, Keybank, Kinecta Federal Credit Union, Limelight, Live Oak Bank, MAC Federal Credit Union, Marcus by Goldman Sachs, Michigan State University Federal Credit Union, My eBanc, MySavingsDirect, Navy Federal Credit Union, nbkc Bank, Northern Bank Direct, Northpointe Bank, Nuvision Federal Credit Union, Pacific National Bank, Pen Air Federal Credit Union, PenFed, PNC Bank, Popular Direct, Purepoint Financial, Quontic, Quorum Federal Credit Union, Radius Bank, Rising Bank, SalemFiveDirect, Sallie Mae Bank, Spectrum Federal Credit Union, State Bank of Texas, State Department Federal Credit Union, Superior Choice Credit Union, Synchrony Bank, TAB Bank, TD Bank, EverBank, TotalDirect Bank, U.S. Bank, USAA, USAlliance Federal Credit Union, Vio Bank, Virtual Bank, Wells Fargo and Truist.

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