If you want to put your savings to work without taking on market risk, a 1-year certificate of deposit (CD) might be the right place for your money. With guaranteed returns and federal insurance, 1-year CDs are a favorite among savers who want better returns than a traditional savings account can offer, but without the commitment of longer-term savings products.
Not sure where to start? Our team evaluated dozens of accounts to determine the 10 best 1-year CDs available today. Find out where you can make the most of your savings with minimal fees, low deposit requirements and excellent customer service. (See our full methodology here).
The following is a snapshot of our selection of the best 1-year CDs available today. Continue reading for more details on these accounts.
The Ally Bank 1-Year CD offers a competitive 3.75% APY and $0 minimum deposit, making it a great option for savers just starting out. Interest is capitalized daily.
The penalty for making an early withdrawal is 60 days of interest.
Read our full Ally Bank review
Synchrony Bank’s 1-year CD is free to open and offers a competitive 3.8% APY. Interest is capitalized daily. However, this account poses a more severe penalty for early withdrawals (90 days of simple interest at the current rate).
Read our full Synchrony Bank review
The Marcus by Goldman Sachs 1-Year CD offers a 4% APY, more than double the national average rate for this term. Interest is capitalized daily. A minimum of $500 is required to open an account.
The early withdrawal penalty for this CD is equal to 90 days of interest on the original principal balance at the current interest rate for the CD.
Read our full review of Goldman Sachs’ Marcus
America First Credit Union’s 1-year CD offers a competitive rate of 3.95% APY with a $500 minimum deposit requirement. Interest is compounded monthly, which is less frequent than some of the other accounts on our list.
Early withdrawals from this CD carry a 60-day dividend penalty.
Read our full review of America First Credit Union
Capital One’s 1-year CD offers a competitive 3.9% APY. There is no minimum deposit required to open an account. However, your CD cannot exceed $1,000,000.
Early withdrawal of a Capital One CD carries a penalty of three to six months of interest, depending on the term.
Read our full Capital One review
The American Express National Bank 1-Year CD offers a 3.25% APY and requires no minimum opening deposit. The early withdrawal penalty is equal to 270 days of interest on the amount withdrawn at the current exchange rate.
Read our full review of American Express National Bank
Bask Bank’s 1-year CD offers a 3.75% APY, although it requires a higher minimum initial deposit of $1,000. The positive side is that it does not include monthly fees. The interest on this account is compounded daily.
Early withdrawals incur a penalty of 90 days of simple interest based on the principal amount withdrawn.
Read our full Bask Bank review
The TAB Bank 1-Year CD has one of the highest minimum opening deposits on our list: $1,000. However, this account also offers a competitive 3.9% APY. Interest is capitalized daily.
The early withdrawal penalty for this account is equal to 90 days of interest on the amount withdrawn.
Read our full TAB Bank review
Live Oak Bank’s 1-year CD offers one of the highest rates available at 4% APY, although the minimum opening deposit is also the highest of all the banks on our list at $2,500.
The early withdrawal penalty for this 1-year CD is 90 days simple interest.
Quóntico Bank
Quontic Bank rounds out our top 10 list with a 1-year CD that earns a 3% APY. The minimum opening deposit is a modest $500. Interest is capitalized daily and credited monthly.
For CDs with terms up to 12 months, the early withdrawal penalty is equal to interest for the full length of the stated term.
Currently, the highest 1-year CD rate among the best CDs available today is 4% APY, offered by both Marcus by Goldman Sachs and Live Oak Bank. The minimum initial deposit required is $500 and $2500, respectively.
The amount of interest you can expect to earn with a 1-year CD depends on the rate on your CD.
For example, if you open a 1-year CD at the current national average rate of 1.61%, you can expect to earn about $162 in interest over a year (assuming daily interest compounding).
However, if you choose a 1-year CD with a 4% interest rate, your interest earnings would be $408 over the same period.
A $100,000 CD will earn different amounts of interest over the course of a year, depending on the term and interest rate of the CD.
Average national rates range from 0.23% for a 1-month CD to 1.61% for a 6-month CD. However, many financial institutions offer rates well above national averages and could generate significantly higher returns on a balance of $100,000.
If you deposited $100,000 in a 1-year CD earning 4% APY, for example, you would receive $4,081 in interest.
The length of your CD term should be chosen based on your savings goals. The longer the term of your CD, the longer you agree to keep your money on deposit. So, in addition to interest rates, minimum deposit requirements, and early withdrawal penalties, you also need to consider the timeline of your savings goal and when you’ll need to access the funds.
Our rating system, compiled and carefully reviewed by our personal finance experts, included over 300 data points for federally insured CDs with 1-year terms. We use this data to develop our list of the best CDs.
We evaluate these accounts based on several key metrics, including annual percentage yield, minimum opening deposit, compounding frequency, and more.
Accounts on our list could score a maximum of 25 points across all metrics. Here’s a closer look at the categories we considered:
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Annual Percentage Yield (APY): Accounts with higher APYs were rewarded with more points than those with lower APYs. Please note that the rates in our list are current at the time of publication, but are subject to change at any time.
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Minimum opening deposit: Many CDs require a minimum deposit to open an account. Accounts with low or no minimum deposit requirements were rated more favorably than those with higher initial deposit requirements.
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Composite frequency: Compounding can occur daily, monthly, quarterly, or even annually. We award more points to accounts that earn compound interest frequently.
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Customer service contact methods: Our team awarded one point for each contact method available to customers (phone, email, chat).