Best 1-Year CD Rates Of 2024

Best 1-Year CD Rates Of 2024


With a one-year certificate of deposit (CD), you can reinvest or withdraw your money at the end of the year and receive a guaranteed return on your investment, all backed by FDIC insurance. The majority of banks sell CDs, and some allow you to invest in them with no minimum amount needed.

As of December 18, 2023, the national average rate for 12-month CDs is 1.86%; however, numerous banks offer substantially higher rates. Banks that provide CDs with one-year durations at 5.00% APY or higher can be found if you look around. Everything you need to know to locate the best rates on one-year CDs is available right here.


Best 1-Year CD Rates

Here are some of the greatest one-year certificates available, based on our comparison of 142 CD accounts from 84 banks and credit unions around the country. See below for specific bank assessments, the reasons behind our selection of each account, and the advantages and disadvantages.

The account information and annual percentage yields (APYs) are current as of December 20, 2023.


To compile this list, Forbes Advisor examined 142 CD accounts from 84 different financial institutions, including a combination of credit unions, traditional brick-and-mortar banks, and online banks. We used eleven different data points—APY, minimums, compound interest schedule, client experience, digital experience, available terms, and overall availability—to assign a star grade to each institution. Every university was examined and ranked according to a certain word as well.

The weighting given to each category is as follows:

  • APY: 50%
  • Customer and digital experience: 20%
  • Minimum deposit requirement: 12.5%
  • Compound interest schedule: 7.5%
  • Availability: 5%
  • Available terms: 5%

Higher APY CD accounts were the first on the list. Minimum deposit requirements of $10,000 or more have a detrimental impact on scores. Higher scores were awarded to accounts with daily compounding interest schedules as opposed to monthly or quarterly schedules. The account needs to be accessible across the country to be included here.

See our article on How Forbes Advisor Reviews Banks to find out more about our editorial process, rating, and review methodology.

Complete Guide to 1-Year CD Rates

Current 1-Year CD Rates

Rates for one-year CDs are increasing. The St. Louis Federal Reserve reports that in 2022, the average interest rate paid on CDs increased six times. In 2023, rates have remained high, and bank rivalry has driven them even higher. These days, the highest one-year CD rates reach 5.00% APY.


While some analysts predict that CD rates may rise further, this will mostly depend on the Federal Reserve’s actions regarding the federal funds rate in the upcoming months.

How To Find the Best 1-Year CD Rates

Based on FDIC data, the average nationwide rate for one-year CDs is 1.86% APY as of December 18, 2023. But, if you take the time to compare rates, you’ll find that several banks, including Connexus Credit Union and PenFed, offer rates that are far higher than the average rate in the country.

If you’re searching for the banks and credit unions with the greatest annual percentage yields, our article on the top 10 CD rates can be a great place to start. It’s also advisable to take into account the previously stated CD accounts.

Remember to account for CD account fees and penalties when comparing rates because they could reduce your returns throughout your investment.

What Is a 1-Year CD?

A certificate of deposit (CD) is a type of savings product that provides investors with a fixed quantity of money and a guaranteed interest rate for a predetermined period, or “term.” A certificate of deposit with a one-year duration is all that a one-year CD is. Generally, there is a penalty for early withdrawal if you take your money out before the term is over. The bank offers you a fixed interest rate for the year that you invest your money.

How Does a 1-Year CD Work?

A one-year certificate of deposit (CD) requires you to deposit money into an account and commit to keeping it there for a full year. This amount is known as the principal. Your bank agrees to give you a set annual percentage yield (APY) in return. The majority of CDs have a minimum deposit requirement, while several institutions reward larger deposits with higher interest rates.

Your bank will pay interest on your principal throughout the year. If a bank offers compound interest, which most do, your monthly income increases dramatically. Most banks will charge you an early withdrawal penalty if you choose to take your money out early.

You can withdraw the principal and interest from your CD after the one year. Occasionally, your bank will deposit the funds from the CD into an associated checking or savings account or give you a cheque. Since many CD contracts roll over, your principle and interest may be transferred automatically to a new CD. Before the term of your CD expires, your bank is supposed to notify you and let you know if it will renew automatically.

Pros and Cons of 1-Year CDs

It’s helpful to be aware of the benefits and drawbacks before opening a one-year CD so you can select the term that best suits your savings objectives.


Offers higher interest rates than some other CD terms

Generally speaking, a one-year CD has a greater interest rate than CDs with shorter terms, such as three- and six-month CDs.

Offers higher interest rates than traditional savings accounts.

If you invest your money for a year, you might be able to get higher interest than you would if you kept it in a conventional savings account at a physical bank.


You could miss out on higher rates

During the duration of your CD, you can lose out on better savings rates if interest rates are rising. Using a shorter-term CD could enable you to benefit from rate increases.

You could get hit with an early withdrawal penalty

Taking early withdrawal penalties from your one-year CD before the term is complete could be costly if you don’t have enough liquid funds to cover emergencies.

How To Choose a 1-Year CD

One of the most common term length choices is a one-year CD: It’s a limited enough time frame for you to be requested to keep your money untouched, but it’s also long enough for you to get respectable returns. Think carefully about whether you can afford to lock up your savings for the duration of the CD before purchasing any:


Of course, it matters what your interest or dividend rate is. Which APY is printed on your certificate or CD? You run the risk of interest rates rising while you’re locked into a lower rate because you’re essentially locking up this money for a year.

Compounding schedule

Look for daily compounding of dividends or interest rather than monthly or quarterly compounding to get the maximum return on your investment.


Seek out financial institutions covered by the National Credit Union Administration (NCUA) or the Federal Deposit Insurance Corporation (FDIC). Your deposits would be guaranteed for up to $250,000 per account for each account ownership type in the case of a bank or credit union failure.

Early withdrawal

The early withdrawal penalty on the CD is another significant concern. If you need to access your principal before the one-year maturity date, an early withdrawal penalty may reduce your interest or dividend returns. Certain banks have withdrawal penalties that can lower your principal amount in addition to allowing you to reclaim whatever interest you may have earned.


Make sure you won’t require the money throughout those twelve months. If you think you might need to take money out of the CD before it matures, a savings or money market account might be a better place to put money away.

How To Open a 1-Year CD

Opening a one-year CD is a pretty simple process.

To receive a CD, you must first open an account with the financial institution. If it’s a credit union, you won’t be able to use any of its goods until you join.

Once your account has been opened, add funds to it in the desired quantity to invest. Generally, you can pay for this via a wire transfer, ACH transfer, or cheque.

You must sign the CD account agreement at the end. Your CD term starts when you do, and interest starts to accrue on your account.

Alternatives to 1-Year CDs

Not every savings goal and spending pattern will be a suitable fit for a one-year certificate of deposit (CD). If you want to look into other income choices, you might want to look at these alternatives to one-year CDs.

1-Year CDs vs. Other CD Terms

Shorter-term CDs are an option to think about if you enjoy the concept of earning a competitive interest rate on your savings but don’t want to commit your funds for a full year. For those who would prefer to get their hands on their money as quickly as possible, many banks offer three- or six-month certificates of deposit. Shorter terms, though, might pay less.

Look at long-term CDs with terms of two, three, five, or ten years if you would rather earn a fixed interest rate for a longer period than one year. Furthermore, 18-month CD rates are sometimes equivalent to one-year rates.

1-Year CDs vs. High-Yield Savings Accounts

You might also think about opening a high-yield savings account if you want to increase the value of your money while still having the protection of FDIC insurance. Variable interest rates that follow market rates are features of high-yield savings accounts, which also let you access your money whenever you want. Check the terms and conditions to make sure you won’t be charged a fee if you need to access your money more frequently than a few times per month as some high-yield savings accounts have transaction limits.

1-Year CDs vs. High-Yield Checking Accounts

If you need to access your money frequently, high-yield checking accounts are also a possibility, although they usually don’t offer as much interest as high-yield savings accounts. Make sure to review the terms before choosing this option because some high-yield checking accounts have conditions that must be met to qualify for interest, such as making a minimum number of debit card purchases each month, or they only offer the best interest rate on a percentage of your amount.

1-Year CDs vs. I-Bonds

Look into series I bonds if you’re seeking safe returns on your investments and inflation protection. In addition to a fixed interest rate, Series I bonds also have an adjustable rate that is increased twice a year to account for inflation. Your Series I bonds cannot be cashed out until a year after purchase. An early five-year redemption of an I bond will result in a three-month interest penalty. The annual purchase limit for Series I bonds is $15,000.

Is a 12-Month CD Worth It?

If you can commit your money for a full year and are looking for guaranteed growth, a 12-month CD may be a wise purchase. Make sure you’re getting the best one-year CD rates before investing by comparing rates offered by other institutions.

A high-yield savings account would be a better choice if there’s a significant probability that you’ll need to access your funds within the next year. Longer-term CDs could provide higher rates if you can afford to lock up your money for a longer period.

Banks We Monitor

These financial institutions were included in our research for the best CD rates:ableBanking, Affinity Federal Credit Union, Ally Bank, American Express, Axos Bank, Apple Federal Credit Union, Bank of America, Bank5 Connect, BankDirect, BankPurely, BankUnitedDirect, Barclays, Bethpage Federal Credit Union, BrioDirect Banking, Capital One, Charles Schwab Bank, Chase, Chevron Federal Credit Union, CIT Bank, Citibank, Citizens Access, Colorado Federal Savings Bank, Comenity Direct, Comerica, CommunityWide Federal Credit Union, Connexus Credit Union, Consumers Credit Union, Credit Union of Denver, Discover, Dollar Savings Direct, EmigrantDirect, Financial Partners Credit Union, Financial Resources Federal Credit Union, First National Bank of America, Georgia’s Own Credit Union, Golden1 Credit Union, Greenwood Credit Union, HSBC Direct, Hughes Federal Credit Union, Ideal Credit Union, iGoBanking, Investors eAccess, Keybank, Kinecta Federal Credit Union, Limelight, Live Oak Bank, MAC Federal Credit Union, Marcus by Goldman Sachs, Michigan State University Federal Credit Union, My eBanc, MySavingsDirect, Navy Federal Credit Union, nbkc Bank, Northern Bank Direct, Northpointe Bank, Nuvision Federal Credit Union, Pacific National Bank, Pen Air Federal Credit Union, PenFed, PNC Bank, Popular Direct, Purepoint Financial, Quontic, Quorum Federal Credit Union, Radius Bank, Rising Bank, SalemFiveDirect, Sallie Mae Bank, Spectrum Federal Credit Union, State Bank of Texas, State Department Federal Credit Union, Superior Choice Credit Union, Synchrony Bank, TAB Bank, TD Bank, EverBank, TotalDirect Bank, U.S. Bank, USAA, USAlliance Federal Credit Union, Vio Bank, Virtual Bank, Wells Fargo and Truist.


Leave a Comment