We review more than 150 banks and credit unions to find the best rates available nationwide for 1-year CDs. We track annual percentage yields and re-evaluate the list every weekday. All accounts are available to the public and are insured by either the Federal Deposit Insurance Corp. or the National Credit Union Administration. One-year CDs are an easy way to earn some extra interest on a chunk of your savings, while also safeguarding against you withdrawing it on a whim.
For this list, we considered products that lock in deposits for 11 to 14 months. Our rankings are based primarily on the best APY. In the case of a tie, we then look at the CD with the shortest term, then with the lowest minimum deposit required to earn the APY. From there, we compare the penalties for early withdrawal. These factors allow us to ultimately decide which banks earn their spots in our rankings. Here are the top 1-year CD rates as of Aug. 12, 2020.
APYs are changing rapidly amid widespread uncertainty about the economy and financial markets. The Balance is monitoring rates and updating them accordingly.
Best 1-Year CD Rates
|Bank or Credit Union||APY||Minimum Deposit||Early Withdrawal Penalty|
|CommunityWide Federal Credit Union||1.10%||$1,000||Complex formula; exercise caution|
|MAC Federal Credit Union||1.10%||$1,000||1 month of interest|
|Hiway Federal Credit Union
|1.10%||$25,000||3 months of interest|
|State Department Federal Credit Union||1.05%||$500||All interest up to 6 months|
|Sallie Mae Bank||1.05%||$2,500||3 months of interest|
|Sallie Mae Bank
|1.05%||$2,500||3 months of interest|
|Credit Union of Denver
|1.05%||$5,000||3 months of interest ($20 minimum)|
|Quontic Bank||1.02%||$500||12 months of interest|
|Connexus Credit Union||1.01%||$5,000||3 months of interest|
|Financial Resources Federal Credit Union
|1.01%||$500||180 days of interest|
Here are details about some of the institutions on our list.
CommunityWide Federal Credit Union was founded in 1967 and is based in northern Indiana. If you don’t live in the area or meet its residency-based membership criteria, you easily can join by becoming a member of the Marine Corps League of St. Joseph Valley which starts at $15 per year. You must deposit $5 in savings. It’s also part of the CO-OP shared branching network.
MAC Federal Credit Union offers members financial products like checking, savings, and money market accounts, credit cards, insurance, and more. Originally founded in 1952 to serve the active duty and civil service personnel in Fort Wainwright, Alaska, the credit union is now open to anyone who purchases a two-year membership for $40 to the Association of the United States Army. When applying for the membership, just change the chapter to the Polar Bear Chapter in Fort Wainwright, Alaska.
Hiway Federal Credit Union was founded in 1935 to serve transportation workers in Minnesota. Membership is available to anyone nationwide with a $10 donation to the Minnesota Recreation & Park Foundation (plus a $5 deposit to your share savings account). Members have access to thousands of CO-OP shared branches nationwide.
Eight U.S. State Department employees helped launch State Department Federal Credit Union in 1935. Headquartered in Old Town Alexandria, Virginia, the credit union offers membership to anyone associated with dozens of partner organizations, in addition to State Department employees. As of July 2020, the credit union boasted more than 86,000 members and $1.9 billion in assets.
Sallie Mae made its name in the student loan business, but it also operates an online bank as well. It’s quite impressive in size, actually, with more than $31 billion in assets as of August 2020. Its online bank offers only savings and CD accounts, however, so you’ll still need to get your everyday checking account elsewhere.
The Credit Union of Denver began in 1931 with eight members and $40 and has since grown into an institution with nearly 64,000 members and more than $880 million in assets.
Membership is available to anyone who lives or works in Adams, Arapahoe, Boulder, Denver, Douglas, or Jefferson Counties in Colorado, or anyone who works for the Regional Transportation District, the National Renewable Energy Laboratory, or any businesses that work with the RTD or NREL. Memberships also are available to family of members and to students at select schools and colleges. The cost of membership is $5.
Quontic is a primarily online bank headquartered in New York. It has three branches, including its headquarters, in the New York area, but its main focus is online banking. Established in 2005, it has more than $480 million in assets as of Aug. 1, 2020.
In addition to CDs, customers can find standard options such as checking, savings, and money market accounts, and an online banking app. The bank also handles mortgages.
Connexus Credit Union serves members nationwide through online banking and as a member of the CO-OP shared network. CO-OP and MoneyPass ATMs also are surcharge-free for members. The credit union is based in Wisconsin and has branches there as well as in Minnesota, Ohio, and New Hampshire.
Membership is available to residents of several communities in Minnesota, Wisconsin, and Ohio, and to anyone affiliated with one of multiple organizations, employers, or schools, including the Connexus Association, which anyone can join for $5.
Financial Resources Federal Credit Union was chartered in 1950 to serve employees of Ethicon Suture Laboratories, a division of Johnson & Johnson, in New Brunswick, New Jersey. Previously known as Ethicon Employees Federal Credit Union, it changed its name in 2000.
Membership is available nationwide to anyone who joins the American Consumer Council, which costs a minimum of $8, as of August 2020. A lifetime ACC membership costs $15.
What Is a 1-Year CD?
A certificate of deposit (CD), offered by banks and credit unions, provides a fixed interest rate (typically higher than other account types) in return for the account holder agreeing to leave the deposit for a set amount of time. Because the rate is fixed, the account holder knows exactly how much the CD will earn when it matures. For a 1-year CD, the account holder agrees not to touch the deposit for one year. At the end of the term, the full interest will be added to the deposit amount. The customer then has the option to withdraw the full amount or renew/change the CD.
Who Is a 1-year CD Best For?
A 1-year CD is appropriate for someone who wants to earn more interest than a typical savings account would offer, although occasionally there are savings accounts with even better rates than 1-year CDs. However, savings rates are variable, so if you think rates are likely to fall and you want to lock in a good one today, go with a CD.
Remember, you need to be comfortable with tying up the money for one year. That’s because there usually are early withdrawal penalties, and the last thing you want to do is lose out on those earnings.
A common reason to consider a 1-year CD might be if you’re saving for a trip or big event to take place next year. The idea is that it’s a short-term investment. Opening a CD helps you avoid the temptation of spending the money, and lets you earn a bit of interest while you wait for it to mature.
Typically, the longer the term, the higher the rate you’ll receive. A 1-year CD can be especially helpful with longer-term savings goals if you’re building a CD ladder. With a CD ladder, you buy CDs of varying lengths to mitigate the risks of locking all your money into one long-term CD.
What Are the Alternatives to a 1-Year CD?
If you’re looking for a savings option, a 1-year CD is just one of them. When choosing the best approach for you, the key is to think about your current financial situation, your goals, and your saving/spending habits. Beyond a 1-year CD, there are some other options to consider.
Explore Different CD Terms
If you know you want to go the CD route, you may decide to go with a shorter or longer term, depending on your needs. Shorter-term CDs allow you access to your money sooner but probably will have a lower APY. Longer terms likely will earn more but will separate you from your money for a bigger stretch of time.
High-Yield Savings Accounts
If you’d rather not tie up your money, you might consider an online savings account. Some APYs are comparable to or even higher than 1-year CD APYs. The difference is that savings account rates can change at any time. Also, if you lack self control when it comes to spending, the easier access that a savings account affords you might not work in your favor.
If you prefer instant account access, we have partnered with the following banks to bring you the high-yield savings and money market account offers displayed in the table.