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As of February 2023, the average rate for a 1-year CD in the US is 1.28% APY. However, some online banks pay up to 5.00% APY on a 1-year CD.
A 1-year term may a good choice if you’d like to maintain a solid interest rate for a relatively short time. If you choose a 1-year CD, you’ll also have the chance to earn a higher interest rate if rates are up in a year. If you’re also interested in other CD term lengths, check out our overall best CD rates guide.
The Best 1-Year CD Rates
CFG Bank 1 Year CD – Product Name Only :CFG Bank 1 Year CD – APY APYFirst Internet Bank of Indiana 1 Year CD – Product Name Only :First Internet Bank of Indiana 1 Year CD – APY APYPentagon Federal Credit Union 1 Year Money Market Certificate – Product Name Only :Pentagon Federal Credit Union 1 Year Money Market Certificate – APY APYAlliant 1 Year Certificate – Product Name Only :Alliant 1 Year Certificate – APY APYCrescent Bank 1 Year CD – Product Name Only :Crescent Bank 1 Year CD – APY APYRising Bank 1 Year CD – Product Name Only :Rising Bank 1 Year CD – APY APYBask Bank 1 Year CD – Product Name Only :Bask Bank 1 Year CD – APY APYBread Savings 1 Year High-Yield CD – Product Name Only :Bread Savings 1 Year High-Yield CD – APY APYAmerican Express® 1 Year CD – Product Name Only :American Express® 1 Year CD – APY Marcus 1 Year CD – Product Name Only :Marcus 1 Year CD – APY APYQuontic 1 Year CD – Product Name Only :Quontic 1 Year CD – APY
Compare the Best 1-Year CDs
Expert Advice on Choosing the Best CD
To learn more about what makes a good CD and how to choose the best fit, four experts weighed in:
Insider
Here’s what they had to say about CDs. (Some text may be lightly edited for clarity.)
How can someone determine whether a bank is the right fit for them?
Tania Brown, certified financial planner at SaverLife:
“Obviously, you want to make sure it’s FDIC insured. Also, your banking experience — do you like walking into a bank? Well, then you need someone local. Do you just not care if you ever see your bank? Then you’re okay online. Do you write checks? Do you not write checks? So it’s thinking through how your experience with it is going to be before you make that decision.”
Sophia Acevedo, certified educator in personal finance, banking reporter, Personal Finance Insider:
“I would create a list of what I prioritize most in a bank account. For example, some banks have accounts that charge monthly service fees. I would look to see what the requirements are for waiving the monthly service fee and whether I think I could feasibly meet those requirements each month. If I’m searching for an interest-earning bank account I’ll pay attention to interest rates. I would make sure the account pays a higher interest rate than the average bank account.”
How should someone choose a CD term length?
Roger Ma, certified financial planner with lifelaidout® and author of “Work Your Money, Not Your Life”:
“I would think about when you need the money and then compare that with what the prevailing CD rates are, and then what makes sense from a financial perspective, but also from your own personal timing perspective.”
Mykail James, MBA, certified financial education instructor, BoujieBudgets.com:
“I believe in having a plan for whatever the funds are. If it’s supposed to be a house fund, and you want to wait for another two years to buy a house, that’s what you should be thinking of when you want to have this money.”
How should someone decide whether to put their money in a high-yield savings account, money market account, or CD?
Tania Brown, CFP:
“So I guess we’ll start off with how much money you want to put in and … the level of transactions you want to have. If you want to have any transactions, that automatically takes out CDs. Then you’re stuck between the high-yield savings and the money market account.”
Sophia Acevedo, Personal Finance Insider:
“Generally, I think a high-yield savings account or money market account could be good options for an emergency fund or short-term savings goals. A high-yield savings account offers a higher interest rate than traditional savings accounts at brick-and-mortar banks. Meanwhile, money market accounts might be worth considering if you want more account accessibility — several offer paper checks, ATM cards, or debit cards. CDs could be worthwhile if you don’t need access to some of your money, since they have a fixed interest rate for a specific term.”
1-Year CD Frequently Asked Questions
What is a 1-year CD?
A 1-year CD is a type of savings account. You’ll put money into an account for 12 months and earn a fixed rate. You have the option to renew your CD at the end of the year, or close the account and take out your money.
How does a 1-year CD work?
If you open a 1-year CD at a 4.60% APY, you’ll earn 4.60% for one year. Once your term ends, you’ll have the option to renew your CD. Financial institutions may offer a new rate since interest rates on products are affected by the federal funds rate.
Some institutions may offer unique CDs called step-up CDs or Raise Your Rate CDs. These CDs have a variable interest rate and allow your rate to change.
Which is best: a 1-year, 3-year, or 5-year CD?
The best option for you will likely depend on how soon you plan to need the money and which term pays the highest rate.
Longer terms typically offer higher rates, however, you’ll still want to check a specific bank just to make sure.
Going for a short-term CD may give you the opportunity to get a better interest rate if rates are up in a year. With a 3-year or 5-year CD, you could miss out on higher rates. That said, you could avoid lower rates with a 3-year or 5-year term if rates drop later.
Many experts recommend CD laddering. With this strategy, you open multiple CDs with different term lengths. For example, you might open 1-year, 3-year, and 5-year CDs at the same time, which means you’ll get some of your money back in one year, then more in three years, then more in five years.
Which is better, a 1-year CD or a high-yield savings account?
Banks typically pays a higher rate for a 1-year CD than for a high-yield savings account. However, that’s not always the case. You’ll want to compare a few options to see which rates appeal the most to you.
Also, keep in mind that a 1-year CD locks in your rate for the entire year. If rates are dropping, this could make the CD a better choice, because your savings interest rate could decrease throughout the year. If rates are rising, the savings account might be a better fit, because your rate could go up.
It also depends on when you’ll need to access your money. With a high-yield savings account, you should be able to access funds from your savings account regularly. If you need access to money from your 5-year CD before it matures, there’s an early withdrawal penalty.
Another thing to keep in mind is that CDs only allow you to deposit money when you open an account or once your CD has matured. With a savings account, you can deposit money at any time.
Which is better, a 1-year CD or a money market account?
You may prefer a money market account over a CD if you want quick access to your money. Money market accounts usually come with paper checks or an ATM card, which CDs don’t offer.
Money market account rates also fluctuate, so you may prefer a money market account if rates are rising, but a CD if rates are dropping.
It’s also good to remember that you can add more funds to your money market account over time, while a CD only permits an opening deposit.
Which is better, a 1-year CD or another investment account?
CDs are a type savings account, and aren’t typically considered investments. CDs are a low-risk place to keep your money and generally do not offer high returns.
If you need to access your money in a year and want a guaranteed rate of return, a 1-year CD is a better choice than a different type of investment account.
If you’re comfortable parting with your money for longer and want to take more risk with your money, then you may want to invest in the stock market. For example, you can get tax-advantaged retirement accounts, like a 401(k) or IRA, Brokerage accounts are another option. These accounts may be useful tools to build long-term wealth, but can’t guarantee a given return like a savings account can. You can also open IRA CD, which is sort of a combo savings/investment account.
Because the stock market is risky, experts generally don’t advise investing money you’ll need in the next five years. In the case of a stock market drop, you wouldn’t have time to make up your losses.
CFG Bank Certificate of Deposit
Why it stands out: CFG Bank has a high interest rate on its 1-year CD, and you’ll only need
APY (Annual Percentage Yield) for 1-year CD:
1-year CD early withdrawal penalty: 90 days of interest
What to look out for: Limited term options. CFG Bank doesn’t have many CD terms to choose from — there are only 12-month, 13-month, 18-month, 36-month, or 60-month CDs.
First Internet Bank of Indiana Certificate of Deposit
Why it stands out: First Internet Bank of Indiana pays high interest rates on several short-term CDs. Its 1-year CD, in particular, stands out for its high interest rate.
First Internet Bank of Indiana also has a savings account, a money market account, and two types of checking accounts.
APY for 1-year CD:
1-year CD early withdrawal penalty: 180 days of interest
What to look out for: First Internet Bank of Indiana compounds your interest monthly, not daily. Depending on how much money is in your CD, this may or may not make a significant difference.
First Internet Bank of Indiana review
Pentagon Federal Credit Union Money Market Certificate – Product Name Only
Why it stands out: If you prefer banking with a credit union over a bank, you might consider a
APY (Annual Percentage Yield) for 1-year CD:
1-year CD early withdrawal penalty: 365 days of interest
What to look out for: Pentagon Federal Credit Union has a high early withdrawal penalty for a 1-year term. Also, bear in mind that credit unions require membership to open accounts. The easiest way to join is to open a savings account with
Pentagon Federal Credit Union review
Alliant Certificate
Why it stands out: Alliant is another solid online credit union. A 1-year Alliant certificate pays higher interest rates than what you would earn at many brick-and-mortar or online banks.
APY for 1-year CD:
1-year CD early withdrawal penalty: Up to 90 days of interest
What to look out for: Credit unions require you to become a member to open accounts. The easiest way to become a member is to join Foster Care to Success, and Alliant will cover your $5 joining fee.
Crescent Bank CD
Why it stands out: Crescent Bank has a variety online CDs with competitive interest rates. It also has standard early withdrawal penalties for 1-year terms.
To deposit money into a Crescent Bank CD, you may mail a check or transfer money from a bank account at another financial institution.
APY for 1-year CD:
1-year CD early withdrawal penalty: 90 days of interest
What to look out for: When your CD matures, it will automatically renew. If you would like to close your account, you must call customer support.
Rising Bank CD – Product Name Only
Why it stands out: Rising Bank could be a good choice if you’re searching for short-term CDs. Its 1-year, 15-month, and 18-month terms offer the highest rates.
Rising Bank also has an interest-earning checking account and a high-yield savings account.
APY for 1-year CD:
1-year CD early withdrawal penalty: 90 days of interest
What to look out for: At Rising Bank, interest is compounded and deposited every three months, while other institutions may compound monthly or even daily. Depending on how much you deposit into a CD, this may or may not make a significant difference.
Bask Bank Certificate of Deposit – Product Name Only
Why it stands out: Bask Bank is an online division of Texas Capital Bank. Bask Bank has a high interest rate on a 1-year CD and offers a high-yield savings account featured in our best online high-yield savings account guide.
APY for 1-year CD:
1-year CD early withdrawal penalty: 90 days of interest
What to look out for: Bask Bank only has short-term CDs. If you would like to set up a CD ladder with terms over 2 years, you might prefer one of the other institutions we’ve included in our list.
Bread Savings High-Yield CD – Product Name Only
Why it stands out: Bread Savings might be worthwhile if you’re searching for a 1-year CD. Interest is also compounded daily, which could make a difference depending on how much you deposit into a CD.
APY for 1-year CD:
1-year CD early withdrawal penalty: 180 days of interest
What to look out for: Generally, financial institutions require only $1,000 to open a CD. To open a CD at Bread Savings, you’ll need at least
The early withdrawal penalty for a 1-year CD is also a bit steep, compared to other financial institutions.
American Express® CD – Product Name Only
Why it stands out: American Express CDs have a
APY for 1-year CD:
1-year CD early withdrawal penalty: 270 days of interest
What to look out for: You may prefer another financial institution if you’re searching for CDs with more lenient withdrawal penalties.
Marcus High-Yield CD – Product Name Only
Why it stands out: Marcus is an online-only financial institution with a high-yield savings account and CDs. You may open a CD with at least
APY for 1-year CD:
1-year CD early withdrawal penalty: 180 days of interest
What to look out for: Marcus doesn’t have any checking or money market accounts. If you want to open a CD where these types of accounts are available, one of the other options on our list may be more suitable.
Quontic CD – Product Name Only
Why it stands out: Quontic Bank could be a good choice if you want to get a 5-year CD with a low minimum opening deposit. Quontic also has a strong 5-year CD.
APY for 1-year CD:
1-year CD early withdrawal penalty: 365 days of interest
What to look out for: Quontic charges high penalties if you need to withdraw money before your term ends. You might prefer one of our other top picks if you would like to open a 1-year CD with a more lenient early withdrawal penalty.
Other 1-Year CDs We Considered
We looked at the following 1-year CDs as well. These CDs ultimately weren’t chosen among our top picks because they may have lower rates than our winners, higher minimum opening deposits, or more substantial early withdrawal penalties. You might find some of these options appealing though, depending on your preferences.
CIT Bank CD : The 1-year CIT Bank CD offers a lower interest rate than our current picks. However, if you’re open to considering terms beyond a 1-year CD, the 13-month CIT Bank CD might be worth exploring. A 13-month CIT CD paysCIT Bank 13 Month Term CD APY.First National Bank of America Certificate of Deposit : First National Bank of America has a variety of CD terms and pays good rates. However, the rates on its CDs don’t compete with any of the banks on our list.Capital One 360 Certificate of Deposit® : Capital One 360 might be worth considering if you’d like to open a CD with a low minimum opening deposit. But, its CD rates aren’t as competitive as our top picks.Citi Fixed Rate Certificates of Deposit : Citi Fixed Rate CDs have a lowCiti Fixed Rate Certificates of Deposit minimum opening deposit. Still, our top picks pay higher interest rates right now.Sallie Mae Certificate of Deposit : You’ll need a minimum opening deposit ofSallie Mae Certificate of Deposit to open a CD at Sallie Mae. Our top picks have lower minimum opening deposits.Bank5 Connect High-Yield Certificate of Deposit : Bank5 Connect has a strong interest rate on a 6-month CDs, but its other CD terms aren’t as strong.Nationwide CD : Nationwide’s 1-year CDs and 18-month CDs are its most appealing options, but other online banks offer even higher rates right now.Barclays Online Certificate of Deposit : Barclays may be a good option if you’re looking for a CD with a low minimum opening deposit or low early withdrawal penalties. Our top picks pay higher interest rates on a 1-year CD, though.Ally High Yield Certificate of Deposit : Ally CDs might be a good choice if you’d like to get a CD with aAlly High Yield Certificate of Deposit minimum opening deposit or low early withdrawal penalties. But its CD rates are currently lower than any of the banks on our list.Discover CD : The initial opening deposit for a Discover CD isDiscover CD . Our top picks have lower minimum opening deposits.Citizens Online Certificate of Deposit : You’ll need at leastCitizens Online Certificate of Deposit to open an account, which is a bit steep compared to other online banks.Amerant CD : Amerant has solid interest rates, but our top picks offer more competitive rates right now.BrioDirect High-Yield CD : BrioDirect has a variety of CD terms, but its 1-year CD rate isn’t as strong as the institutions we’ve chosen.TIAA Basic Certificate of Deposit : TIAA has a variety of CDs, but other online banks and credit unions pay higher interest rates on CDs right now.Connexus Share Certificate : Connexus requires a minimum opening deposit ofConnexus Credit Union Share Certificate . Our top picks have much lower minimum opening deposits.NBKC CD : NBKC offers competitive interest rates on long-term CDs, but its short-term CDs aren’t as strong.Live Oak Bank CD : Live Oak Bank offers a competitive interest rate, but you’ll need at leastLive Oak Bank Certificate of Deposit to open an account.
Bank Trustworthiness and BBB Ratings
We’ve compared each banks Better Business Bureau score. The BBB grades businesses based on factors like responses to customer complaints, honesty in advertising, and transparency about business practices. Here is each company’s score:
| Institution | BBB grade |
| First Internet Bank of Indiana | A+ |
| CFG Bank | NR |
| Pentagon Federal Credit Union | A+ |
| Alliant | A+ |
| Crescent Bank | A+ |
| Rising Bank | A+ (rating of parent company, Midwest BankCentre) |
| Bread Savings | NR (rating from Comenity Bank, the partner bank of Bread Savings) |
| Bask Bank | D- |
| American Express National Bank | A+ |
| Marcus by Goldman Sachs | A+ |
| Quontic Bank | A+ |
CFG Bank, Bread Savings, and Bask Bank have the lowest BBB ratings on our list.
CFG Bank currently doesn’t have a rating because its profile is being updated on the BBB website. Bread Savings also has an NR(“No Rating”) grade because the company is in the process of responding to previously closed complaints.
Bask Bank received a D- rating from the BBB because it’s received 25 customer complaints on the BBB website and it hasn’t responded to one customer complaint. However, its parent company, Texas Capital Bank, has an A+ rating from the BBB.
Something to keep in mind is that a BBB rating isn’t necessarily the be-all and end-all. If you’d like to see if a company is a good fit, talk to current customers or read online customer reviews.
American Express National Bank and Bread Savings have been involved in recent public controversies.
In 2022, American Express National Bank paid $430,500 in a settlement with the United States Department of the Treasury’s Office of Foreign Assets Control (OFAC). In the settlement, OFAC accused the bank of processing transactions on an account where the supplemental card holder was linked to illegal drug distribution and money laundering.
According to a note on the BBB website about Comenity (Bread Savings’ partner bank), there has been a pattern of complaints and reviews received by the BBB between October 15, 2022, and November 14, 2022. The complaints claim that customers have experienced billing inaccuracies, customer service deficiencies, and inaccurate reporting to credit bureaus. The BBB has written to the company about these issues twice in the last two months and hasn’t received a response, yet. The BBB will provide updates as needed.
Why Trust Our Recommendations?
Personal Finance Insider’s mission is to help smart people make the best decisions with their money. We understand that “best” is often subjective, so in addition to highlighting the clear benefits of a financial product or account — a high APY, for example — we outline the limitations, too. We spent hours comparing and contrasting the features and fine print of various products so you don’t have to.