Compare the Best 1-Year CD Rates

What Is a 1-Year CD and How Does It Work?

Certificates of deposit (CD) with a 1-year term are special types of accounts with interest rates that are usually higher than other savings accounts. In exchange for the high rate, you must keep your funds locked🉐 up for about 10 to 🌠14 months. This may be good for your short-term savings since you can access the money by next year.

The reason banks and credit unions are willing to pay higher rates on 1-year CDs is because they can generally count on those funds staying in the account, unlike funds that can unpredictably come and go in ✃a savings, money market, or checking account.

Banks and credit unions offer CDs in a variety of terms, from 1 month up to 10 years, so you can choose how long you're willing to lock up your funds. The most common CD terms, however, range from 6 months to 5 years, with 1-year certificates being💜 the most widely available of all.

🐟 The date your CD ends is called its maturity date, and although it’s not impossible to withdraw your funds before maturity, you’ll incur a financial penalty if you do so.

Pros and Cons of the Best 1-Year CDs

Pros Explained

• Fixed interest rate for a full year: Once you open a CD, you lock in the rate you’ll receive for the full term, no matter what the Federal Reserve does or how other interest rates move. This is a big advantage if rates are predicted to fall, and it can help you stay on track toward your short-term savings goals.
• Higher APY than liquid accounts: Banks and credit unions are willing to pay higher rates on CDs, where they know the money will stay put, than on savings, money market, and checking accounts, where you can withdraw funds more often.  
• Fully predictable earnings and date of withdrawal: Since a CD’s rate and term are fixed, you know exactly when you’ll be able to withdraw the funds and exactly how much interest you’ll have earned by that date. 
• Extremely safe, with almost no risk: When you open a CD at an FDIC-insured bank or NCUA-insured credit union, you are federally protected on up to $250,000 in deposits, even if the institution fails.
• Helps deter spending: If you find it hard not to dip into your savings, the early withdrawal penalty on CDs can serve as a useful roadblock to unwanted spending.
  

Cons Explained

• Early withdrawal of the funds will incur a penalty: If you find you need the funds in your CD sooner than the maturity date, you’ll be hit with an early withdrawal penalty that will reduce your earnings.
• You can’t add to your deposit: Once you decide on your initial deposit amount for a CD, that’s a final decision. You cannot make additional deposits or add money.
• If rates rise, you may miss out on a higher rate: If rates go up while you own your CD, it means you may have been able to score a higher rate if you had locked in later.
• If rates drop, you may wish you’d chosen a longer CD: Alternatively, if rates begin declining, you may regret not locking in your great rate for a much longer duration.

How Much Money Does $1,000 Make in a Top-Paying 1-Year CD?

The amount of money in interest that a $1,000 deposit can make in a 1-year CD will depend on the interest rate. Below are three different scen💛arios based 𒅌on three different interest rates you could get on a 1-year CD:

The higher your deposit, thജe higher the interest you will earn from a CD. If you had $10,000 to deposit in a 1-year CD with these same rates, you could earn between $450 and $500 in interest in one year (as long as you do not withdraw your money early).

How to Find the Best 1-Year CD

1. Shop around to learn where the highest 1-year CD rates are offered. You may find CD options at banks, credit unions, or even brokerage accounts.
2. The best 1-year CD for you will be where you feel most comfortable stashing your cash and leaving it for 12 months. While 12 months can feel like a long time, it may help you reach your short-term savings goals faster.
3. Look at the early withdrawal penalty. If you need the money sooner than the term's end, you'll likely pay this penalty (though there are some 澳洲幸运5官方开奖结果体彩网:CDs with no penalties).
4. Compare your options, review the terms, and then deposit the money to start earning interest.

How to Open a 1-Year CD

澳洲幸运5官方开奖结果体彩网:Opening a CD is generally no more difficult than opening a savings or checking account. Follow these st𒊎eps—almost all of the certificates in our rankings of the top nationally available CD rates can be opened online within 10 or 15 minutes.

1. Provide personal information and identify yourself in the application—online or in person.
2. Specify how you’ll fund the new CD. The most common approach is an electronic transfer from another financial institution. However, depending on the institution, you may also have options to send a check or wire money.
3. Read the written terms of your CD agreement, which will stipulate the interest rate you'll be paid, the date of the CD's maturity, the frequency with which your interest will be paid and 澳洲幸运5官方开奖结果体彩网:compounded, and the specific penalty calculation that will be used if you request to withdraw your funds before maturity.

Once your CD is open and funded, it's generally a "set it and forget it" product. You'll receive monthly or quarterly statements showing your certificate's growth, but hopefully, you can leave the funds untouched until the maturity date rolls around.

Although the bank or credit union will notify you in advance of the CD maturing, it's wise to set a calendar reminder for yourself so you can be ready with a decision on what to do with the funds when the CD expires.

When Is the Best Time to Get a 1-Year CD?

The best time to get a 1-year CD is right before interest rates drop. There's no easy way to know when that will happen, though, so you'll have to decide when the time is right for you.

For example, if the 1-year CD you're planning to open has a rate of 5.00% APY right now, and you believe the Fed will lower the fed funds rate in the next month or two, then now might be the best time to get that CD. That's because CD rates typically follow the fed funds rate, so if the Fed lowers rates, your choice of 1-year CD could also see its rate fall.

Of course, the best time 🌸to get a CD will also depend on your situation—you may need to have a certain amount for the deposit, as well.

What If I Need to Withdraw My Money Early?

Early withdrawal penalties, or EWPs, differ greatly among banks and c🦄redit unions.ꦬ

"Before purchasing a CD, make sure you know what would happen if you needed to break the CD prematurely," said 澳洲幸运5官方开奖结果体彩网:Douglas Boneparth, a member of 澳洲ꦺ幸运5官方开奖结果体彩网:Investopedia’s Financial Advisor Council. "Would you be giving up all or some of the intere🍸st you've earned?💟"

For a one-year term, the most common EWP is three or six months' worth of interest. What that means is, if you cash in your CD before its maturity date, the funds returned to you will be docked by the amount of interest the CD would have earned in three or six months.

But don't assume all EWPs are similar, or even reasonable. You may find one that charges a whole year's worth of interest, while another assesses a mild 30 days' interest. Still others have more complicated or onerous policies that can even eat into your 澳洲幸运5官方开奖结果体彩网:principal. That's why due diligence is critical before funding any CD. You want to be sure you understand what you're signing up for. Aᩚᩚᩚᩚᩚᩚ⁤⁤⁤⁤ᩚ⁤⁤⁤⁤ᩚ⁤⁤⁤⁤ᩚ𒀱ᩚᩚᩚnd when two 🐼choices are relatively equal, choose the CD with the milder penalty.

CD Rates From Big Banks and Credit Unions

Some of the biggest banks and credit unions—like the ones you may see commercials for on TV—don't offer the highest CD rates. When choosing a CD, we always recommend looking for one with a high interest rate, a minimum deposit that you can afford, and a term that works for your timeline. If one of the top nationwide CD rates doesn't meet your needs, you can always look at a big-name bank or credit union. You may already have a relationship with one of these institutions, making opening a CD easy. Here are a few banks and credit unions you may want to explore:

• 澳洲幸运5官方开奖结果体彩网:Citibank CD Rates
• 澳洲幸运5官方开奖结果体彩网:U.S. Bank CD Rates
• 澳洲幸运5官方开奖结果体彩网:Chase Bank CD Rates
• 澳洲幸运5官方开奖结果体彩网:Bank of America CD Rates
• 澳洲幸运5官方开奖结果体彩网:Navy Federal CD Rates
• 澳洲幸运5官方开奖结果体彩网:Capital One CD Rates
• 澳洲幸运5官方开奖结果体彩网:Wells Fargo CD Rates
• 澳洲幸运5官方开奖结果体彩网:TD Bank CD Rates
• 澳洲幸运5官方开奖结果体彩网:PNC Bank CD Rates
• 澳洲幸运5官方开奖结果体彩网:Charles Schwab CD Rates
• 澳洲幸运5官方开奖结果体彩网:PenFed CD Rates
  

Alternatives to a 1-Year CD

A 1-year CD won’t be the best savings option i💎n all cases, of course. Fortunately, there is no short🌱age of alternatives, depending on your situation:

1-Year CDs vs. Longer-Term CDs

If you can leave your funds untouched for longer than a year, it’s worth shopping the longer CD terms, such as 澳洲幸运5官方开奖结果体彩网:18 months or 2 years. You may be able to score a higher rate on one of those🔯 CDs. Or you may want to opt for a CD rate t💧hat’s not quite as high, but that will last further into the future. 

1-Year CDs vs. Shorter-Term CDs

If you want to move some of your money from regular savings into a CD, but you just don’t feel comfortable with the year-long commitment, 3-month and 澳洲幸运5官方开奖结果体彩网:6-month CD terms are available🅺 from most banks and credit unions that sell CDs.

1-Year CDs vs. Savings Accounts

If one year seems like too long to keep your money locked up in a CD, a savings account may be a better option. But don't open just any savings account—a 澳洲幸运5官方开奖结果体彩网:high-yield savings account that pays a competitive int𒅌erest rate is best. While you may not be able to earn as much as the highest rate on a 1-year CD, you will still earn more than you would in a traditional savin🦹gs account. Plus, the money is accessible whenever you need it.

1-Year CDs vs. Money Market Accounts

Another option if you want to keep your money more accessible than with a 1-year CD is a 澳洲幸运5官方开奖结果体彩网:money market account. A m💖oney market account acts like a savings account, but allows check-writing privileges. Money market accounts also pay high interest rates compared to traditional savings accounts and allow more flexibility with withdrawals than a CD.

1-Year CDs vs. Investing and Brokerage Accounts

Investing accounts can help you save and invest money in stocks, bonds, ETFs, index funds, and more. However, when you invest money like this, usually 澳洲幸运5官方开奖结果体彩网:with a brokerage, it's not as easy to withdraw it if you ൲shouജld need it.

While CDs also come with early withdrawal penalties and taxes on the earnings, investing accounts work differently. If you sell investments you may be selling them for more or less than you bought them for. You may have to pay capital gains taxes, which vary depending on 澳洲幸运5官方开奖结果体彩网:how long you invested the money. It may take a few days to get your mon✤ey from the broker an🍬d into your bank account.

With a CD, you know exactly when you get the money back after the term ends. You may also be able to open a CD right at your current bank or credit union. You'll also be 澳洲幸运5官方开奖结果体彩网:taxed on the CD's earnings, but it's taxed as ordinary income, not as capital gains taxes.

1-Year CDs vs. I Bonds

These U.S. government bonds are designed to protect your savings against inflation, hence the name I bonds. But while they sometimes pay rates much better than CDs, sometimes the rate is inferior. For example, for I bonds issued between May 1, 2025, and October 31, 2025, the interest rate is 3.98%. Also, you absolutely cannot withdraw your funds from an I bond until one year passes, not even with a penalty. CDs, on the other hand, allow you to withdraw before the term🤪 is up, with a penalty.

1-Year CDs vs. U.S. Treasuries

These allow you to lend money to the U.S. government for a fixed amount of time. Considered one of the safest investments in the world, a T-Bill is a note with a duration of up to 1 year. Unlike CDs, interest earned on Treasuries is not subject to state income tax. Tr🅘easuries are also more liquid because you can sell them before maturity on the secondary market. While there's no guarantee what price𒁏 you'll get when you sell a Treasury early, there is no official penalty, as there is with a CD.

1-Year CDs vs. Bond Funds

Though it is difficult to research individual bonds, such as corporate offerings, you can easily invest in a 澳洲幸运5官方开奖结果体彩网:bond mutual fund or ETF, which is diversified across many different bond issues. You can also enter and exit the fund at any time. But bonds are uninsured and could lose value. When interes𝔉t rates are high, a CD may have a better return than a bond; when the opposite is true, a bond generally pays more in int🐷erest.

1-Ye🐻ar ⭕CDs vs. Money Market Funds or Cash Reserve Accounts

If you have a brokerage account, you can also hold savings in the brokerage’s cash reserve account or its 澳洲幸运5官方开奖结果体彩网:money market fund. Just be sure to research what rate you’ll earn because, in many cases, it will be far less than what you can earn in an outside CD, savings account, or money market account. Money market funds are also not insured by the FDIC, but they are insured by the Securities Investor Protection Corp. (SIPC) for up to $500,000, including $250,000 in cash.

As with a money market account, money market funds are more liquid than CDs. You can withdraw your money 🍬whenever you want. But their APY is also variable so it could change at any time.

How We Find the Best 1-Year CD Rates

Every business day, Investopedia tracks the rate data of more than 200 banks and credit unions that offer CDs to customers nationwide, and determines daily rankings of the top-paying certificates in every major term. To qualify for our lists, the institution must be federally insured (FDIC for banks, NCUA fo🐼r credit unions), the CD's minimum initial deposit must not exceed $25,000, and any specified maximum deposit cannot be under $🎀5,000.

Banks must be available in at least 40 states. And while some credit unions require you to donate to a specific charity or association to become a member if you don't meet other eligibility criteria (e.g., you don't live in a certain area or work in a certain kind of job), we exclude credit unions whose donation requirement is $40 or more. For more about how we choose the best rates, 澳洲幸运5官方开奖结果体彩网:read our full methodology.

Your Guide to CDs

• 澳洲幸运5官方开奖结果体彩网:What Is a Certificate of🐲 D🌳eposit (CD)?
• 澳洲幸运5官方开奖结果体彩网:What Is a Brokered CD?
• 澳洲幸运5官方开奖结果体彩网:What Is a CD Ladder?
• 澳洲幸运5官方开奖结果体彩网:Pros and Cons of CDs
• 澳洲幸运5官方开奖结果体彩网:How to Invest With CDs
• 澳洲幸运5官方开奖结果体彩网:How to Open a CD
• 澳洲幸运5官方开奖结果体彩网:How to Close a CD
• 澳洲幸运5官方开奖结果体彩网:CDs vs. Annuities
• 澳洲幸运5官方开奖结果体彩网:CDs vs. Stocks
• 澳洲幸运5官方开奖结果体彩网:CDs vs. Mutual Funds
• 澳洲幸运5官方开奖结果体彩网:CDs for ETFs
• 澳洲幸运5官方开奖结果体彩网:CDs vs. Savings Accounts
• 澳洲幸运5官方开奖结果体彩网:Short-Term vs. Long-Term CDs
• 澳洲幸运5官方开奖结果体彩网:CD Rates News
• 澳洲幸运5官方开奖结果体彩网:Best CD Rates
• 澳洲幸运5官方开奖结果体彩网:Best 3-Month CD Rates
• 澳洲幸运5官方开奖结果体彩网:Best 6-Month CD Rates
• 澳洲幸运5官方开奖结果体彩网:Best 18-Month CD Rates
• 澳洲幸运5官方开奖结果体彩网:Best 2-Year CD Rates
• 澳洲幸运5官方开奖结果体彩网:Best 3-Year CD Rates
• 澳洲幸运5官方开奖结果体彩网:Best 4-Year CD Rates
• 澳洲幸运5官方开奖结果体彩网:Best 5-Year CD Rates
• 澳洲幸运5官方开奖结果体彩网:Best Bank CD Rates
• 澳洲幸运5官方开奖结果体彩网:Best Jumbo CD Rates

*Disclosure: Annuity rates are subject to change at any time and the rate mentioned may no longer be current. Please visit  for current rates, full product disclosures, and disclaimer. Withdrawals above the 10 percent free withdrawal amount subject to a withdrawal charge and market value adjustment. FastBreak™ is issued by Gainbridge Life Insurance Company in Zionsville, Indiana. FastBreak™ is not a tax-deferred annuity, instead, it is taxed annually.