Looking to grow your money? While high yield savings accounts are a popular choice, certificates of deposit (CDs) offer some compelling advantages. CDs allow you to earn interest for a set time period and can often outperform savings accounts in terms of annual percentage yields (APYs).
If you’re considering a 12-month CD option, it’s important to compare banks to find the best one-year CD rates. In this article, we’ll highlight the highest one-year CD rates offered by banks and credit unions in January 2024.
Best 1-Year CD Rates Compared 2024
To help you make an informed decision, we’ve compiled a list of the most competitive one-year CD rates available. Here are our recommendations:
CIBC
CIBC offers some of the most competitive rates for one-year CDs, with a minimum deposit requirement of $1,000. However, if you’re a super saver, you can deposit up to $5 million into a CD account here. While interest compounds and credits monthly instead of daily, CIBC provides a convenient online account opening process.
Bread Savings
Bread Savings offers one-year CDs with high rates and no monthly fees. With a minimum deposit of $1,500, you’ll also have a 10-day grace period to renew once your CD matures. Keep in mind that the total deposit limit is $10 million per customer, and standard FDIC coverage limits apply.
Barclays
Barclays is another top choice for one-year CD rates and low fees. With no monthly fees or minimum balance requirements, opening an account is hassle-free. Funding your account within 14 days of opening is necessary to keep it active and earn interest. Barclays also goes the extra mile with its exceptional customer service, including phone support seven days a week.
Quontic Bank
Quontic Bank is a digital bank that offers one-year CDs with a low opening deposit requirement of $500. Enjoy one of the highest rates for 12-month CD terms and experience a seamless online account opening process that takes just three minutes. Be aware that early withdrawal penalties apply if you withdraw money before the maturity date.
Synchrony Bank
Synchrony Bank’s 11-month no-penalty CD option provides the flexibility to withdraw funds early without forfeiting interest. Additionally, Synchrony Bank offers a range of other CD options, including bump-up CDs and standard CDs. While there is no minimum deposit requirement, early withdrawal penalties apply for bump-up or standard CDs.
Discover
Discover offers a wide range of financial products, including competitive one-year CDs. With a minimum deposit requirement of $2,500, opening an account with Discover can be a great option if you’re considering switching banks or consolidating multiple accounts.
Capital One
Capital One offers one-year CDs with no minimum deposit requirement, making it an attractive choice for both beginner savers and those interested in opening multiple CDs. Capital One’s current payout on one-year CDs is highly competitive, and you have the flexibility to choose how interest is paid out.
Nationwide Bank
Axos Bank partners with Nationwide to offer one-year CDs with a generous APY and a minimum deposit requirement of $500. By opening a Nationwide CD, you gain access to a robust online and mobile banking platform, making it easy to manage your accounts from anywhere.
U.S. Bank
While brick-and-mortar banks are not typically known for offering competitive CD rates, U.S. Bank is an exception. In addition to standard CDs, U.S. Bank offers CD specials with higher APYs for savers. If you’re already a U.S. Bank customer, you might even qualify for a bonus rate. The minimum deposit for CD specials is $1,000, and you can also build a CD ladder with multiple term options.
CIT Bank
CIT Bank consistently rates as one of the best options for CD savers looking for high rates. While the minimum deposit requirement is $1,000, CIT Bank’s 11-month no penalty CD offers a competitive rate and the flexibility to withdraw funds without an early withdrawal penalty.
Methodology
To identify the best CD rates, we compared various banks and credit unions on factors such as minimum deposit requirements, interest rates, fees, and compounding frequency. The final rankings are based on our assessment of the best overall performers in each category.
How to Select the Best 1-Year CD for You
As you compare different one-year CDs, consider the following factors:
- Minimum deposit requirements: Choose a CD with a minimum deposit requirement that fits your budget.
- Interest rates: Compare rates to maximize your earnings.
- Compounding frequency: Look for more frequent compounding to accumulate interest faster.
- Early withdrawal penalty: Be aware of the potential penalty if you need to withdraw funds before maturity.
- Renewal options: Understand the grace period for making changes to your CD at renewal.
How Are CD Rates Changing?
CD rates, especially one-year CD rates, are on the rise. This trend reflects the Federal Reserve’s decision to increase the federal funds rate. In May 2023, the national average CD rate reported by the Fed was nine times higher year-over-year. Further rate hikes throughout 2023 may push CD rates even higher.
When Is a 1-Year CD the Right Choice?
A one-year CD may be ideal if you’re saving for near-term goals, such as vacation expenses, new furniture, a planned move, or wedding expenses. It can also be a part of a CD ladder strategy, allowing you to roll over savings or make changes regularly.
TIME Stamp: 1-Year CDs Can Help You Save for Near-Term Goals
Consider a one-year CD as a safe and secure option for parking money you don’t plan to spend immediately. While online banks often offer competitive rates, traditional banks and credit unions may also have appealing rates. Ultimately, choose the CD option that offers the highest rate and aligns with your savings goals.
Frequently Asked Questions (FAQs)
What are the alternatives to 1-year CD rates?
If you’re considering alternatives, look into CDs with shorter or longer terms, high-yield savings accounts, or money market accounts, which offer higher rates without early withdrawal penalties.
Are there no-penalty CDs?
While less common, some banks offer no-penalty CDs that allow you to withdraw funds before maturity without incurring penalties. Synchrony Bank, for example, provides an 11-month no-penalty CD with a competitive rate.
Should you consider short-term or long-term CDs?
The choice between short- and long-term CDs depends on your savings goals. Short-term CDs suit those with near-future needs, while long-term CDs offer a higher interest rate for a more extended period.
APY—Annual Percentage Yield is accurate as of Jan. 7, 2024.
With a No-Penalty CD, you may withdraw the total balance and interest earned, without penalty, beginning 7 days after funds have been received for your CD. No withdrawals are permitted during the first 6 days following the receipt of funds.