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The best savings accounts can help you to grow your money, but there are some good reasons to consider certificates of deposit (CD) instead. CDs allow you to earn interest for a set time period and, depending on where you bank, can outstrip savings-account annual percentage yields (APYs).
If you're interested in a 12-month cd option, comparing banks can help you to find the best one-year CD rates. Here are the highest one-year CD rates among banks and credit unions.
Best 1-year CD rates compared 2023
| Bank/financial Institution | Best for | Minimum deposit | APY* | Fees | Interest compounding frequency |
|---|---|---|---|---|---|
CIBC | Multiple funding options | $1,000 | 5.62%* | Early withdrawal penalty | Monthly |
Brio Direct | Highest APY | $500 | 5.35%* | Early withdrawal penalty | Daily |
Easy account opening | $500 | 5.30%* | Early withdrawal penalty | Daily | |
Alliant Credit Union | Highest credit union CD rates | $1,000 | 5.25%* | Early withdrawal penalty | Daily |
BMO | Joint CDs | $1,000 | 5.25%* | Early withdrawal penalty | Daily |
Synchrony | Short-term CDs | None | 5.10%* | Early withdrawal penalty | Daily |
Capital One | No minimum balance requirement | None | 5.00%* | Early withdrawal penalty | Monthly |
Discover Member FDIC | One-stop banking | $2,500 | 5.00%* | Early withdrawal penalty | Daily |
No penalty CDs | $1,000 | 4.90%* | No withdrawal penalty** | Daily | |
Online and mobile banking access | $500 | 4.75%* | Early withdrawal penalty | Daily | |
Spectra Credit Union | IRA CDs | $500 | 4.50%* | Early withdrawal penalty | Daily |
Our recommendations for best 1-year CDs for October 2023
Best for multiple funding options: CIBC
CIBC offers some of the most competitive rates of any one-year CD, with a moderate minimum deposit requirement of $1,000. You can, however, deposit up to $5 million into a CD account here if you're a super saver.
Accounts can be opened online and you can fund your initial deposit via electronic transfer or paper check. There is one potential downside and that's how often interest compounds. CIBC compounds and credits CD interest monthly instead of daily.
Best for highest APY: Brio Direct
Brio Direct offers multiple online CD options, including a high-yield one-year CD. The minimum deposit is $500, though you can deposit more than that or open multiple CDs to build a savings ladder. Deposits are FDIC-insured.
In terms of rates, Brio pays an exceptionally generous APY to savers who open a new account for the first time. If you're already a Brio Direct customer, you can still get competitive rates on CDs, though they may be lower than the maximum promotional rate currently on offer.
Best for easy account opening: Quontic Bank
Quontic is a digital bank that offers one-year CDs with a low opening deposit requirement of $500. Savers earn one of the highest rates for 12-month CD terms, and rates are also competitive for Quontic's other CD options. One of the best things about Quontic is that it's easy to open your account online in as little as three minutes.
Interest compounds daily and CD renewal is automatic. As is usually the case with CDs, you’re not supposed to withdraw money before the maturity date and will be charged a penalty if you do so.
Best for highest credit union CD rates: Alliant
If you're interested in saving with a credit union instead of a bank, Alliant is a great option. Alliant's one-year CD account has one of the highest APYs of any CD and you get all the other benefits associated with saving at a credit union.
You can find jumbo CDs here as well if you're interested in saving larger amounts. The minimum deposit to open an account is $75,000 and they can earn even higher rates. If you're interested in sticking with the regular one-year CD, you'll just need $1,000 to start saving.
Best for joint CDs: BMO
Opening a joint CD account is something you might consider if you'd like to save with a partner, spouse, parent or someone else. BMO offers a one-year CD that earns a competitive rate, with the option to add a joint account owner. The minimum deposit is $1,000 but you can make a larger opening deposit if you're splitting savings.
BMO CDs are FDIC-insured and you can easily open your account online. There is an early withdrawal penalty that may apply if you or your joint CD owner decide to take money from your savings before maturity.
Best for no-penalty CDs: Synchrony Bank
No-penalty CDs allow you to withdraw money from your CD early without having to forfeit some or all of the interest earned. Synchrony offers an 11-month no-penalty CD option that earns a solid rate. You might choose this type of high-yield CD if you think there's a chance you'll need to make a withdrawal before maturity.
Synchrony Bank also offers plenty of other CD options, including bump-up CDs and standard CDs. Terms for those savings options range from three to 60 months and there's no minimum deposit requirement you need to meet. However, you will pay an early withdrawal penalty if you take money from a bump-up or standard CD early.
Best for no minimum balance requirement: Capital One
Capital One offers one-year CDs as well as CDs with other terms and there's no minimum deposit requirement to open an account. That could make them a good fit if you're just getting started with saving or if you're interested in opening multiple CDs at the same bank or different banks.
The current payout on a one-year CD from Capital One is among the best available. And interest can be paid out monthly, annually, or at the end of the term—it’s your choice.
Best for one-stop banking: Discover
Discover offers a wide range of financial products, including one-year CDs that earn competitive rates.
You might consider a Discover CD if you're interested in switching banks or want to open multiple accounts in the same place. Keep in mind, however, that Discover requires at least $2,500 to open a CD account. Member FDIC.
Best for short-term CDs: CIT Bank
Disclosure
CIT Bank routinely rates as one of the best options for CD savers who want to earn the highest rates. There are a variety of CD terms to choose from but you'll get the best APY with a an 11-month no penalty CD.
At $1,000, the minimum deposit requirement is a bit higher than other banks. However, as opposed to other online CD options, CIT No Penalty CD doesn't have an early withdrawal penalty for taking money out of your account before maturity**.
Best for online and mobile banking access: Nationwide Bank
Axos Bank partners with Nationwide to offer one-year CDs with a generous APY. The minimum deposit requirement is $500.
When you open an Nationwide CD, you get access to a robust online and mobile banking interface. That makes it easier to manage your CD accounts—or open new ones—from any place, at any time.
Best for IRA CDs: Spectra Credit Union
Credit unions can sometimes offer CD rates that are on par with the higher APYs you'll find at online banks. Spectra Credit Union features a 12-month IRA CD with a solid rate and a low minimum deposit requirement of $500. IRA CDs combine the savings aspects of a certificate of a deposit with the tax benefits of an Individual Retirement Account.
You'll need to join the credit union first to open a CD account. You can become a member if you:
- Are a relative of a current member
- Live in a household with a current member
- Belong to a select employer group
- Are a contractor or employee of a contractor who works at the Naval Research Laboratory
- Are a civilian or military employee of the U.S. government stationed at the Naval Research Laboratory
- Agree to join the American Consumer Council
You'll also need to open a Share Membership Savings Account, which has a low opening deposit requirement of just $5.
Methodology
We compared one-year CD accounts at multiple banks and credit unions to find the best CD rates. In finalizing our rankings, we consider minimum deposit requirements, interest rates, fees, and how frequently interest compounds. The CDs that made it into the final rankings rated the best overall in each of these categories.
How to select the best 1-year CD for you
There are lots of one-year CDs to choose from, but some may be a better fit for your needs than others. As you compare CDs from different banks, here are a few things to keep in mind:
- Minimum deposit requirements. Some banks allow you to open a CD with as little as $1, while others might require $1,000 or more to get started. It's important to choose a CD with a minimum deposit requirement that won't strain your budget.
- Interest rates. It's wise to compare one-year CD rates to see which banks pay the most interest. The higher the APY, the faster your money can grow.
- Compounding frequency. Banks can compound CD interest differently, with some compounding daily and others compounding monthly. A more frequent compounding rate means interest accumulates more quickly.
- Early withdrawal penalty. Withdrawing money from a CD before maturity could trigger a penalty. Even if you don't anticipate making early withdrawals, it's still a good idea to know what the bank might charge if you have to break into your CD early.
- Renewal. It's common for banks to renew CDs automatically while allowing you a grace period in which you can withdraw funds, add more money, or switch CD types. Being aware of how long you'll have to make changes can prevent you from being locked into a new CD at renewal if that isn't what you want.
How are CD Rates changing?
CD rates—in particular one-year CD rates—are rising. That trend reflects the Federal Reserve's (Fed) decision to begin increasing the federal funds rate in 2022. The national average CD rate reported by the Fed in May 2023 is nine times higher year-over-year.
Additional rate hikes for the remainder of 2023 are possible. If the Fed takes such action, CD rates may climb even higher.
When is a 1-year CD the right choice?
A one-year CD could be the right option if you're saving toward a specific goal that's not too far off on the horizon. For example, you might use a one-year CD to save for:
- Vacation expenses
- New furniture
- A planned move
- A new-to-you vehicle
- Wedding expenses
You might also open a 12-month CD account if you're building a CD ladder. The other rungs might include a 3-month CD, 6-month CD, 9-month CD, and 18-month CD. Spacing out maturity terms means a renewal is always around the corner, allowing you a chance to either withdraw your savings or roll them over to a new CD term.
TIME Stamp: 1-year CDs can help you save for near-term goals
A one-year CD can offer a safe, secure place to park money that you don't plan to spend right away. Online banks can offer some of the most competitive CD rates, though it may be worth checking rates at traditional banks and credit unions as well. The best CD option for you is ultimately the one that pays the highest rate with a term that fits your savings goals.
Frequently asked questions (FAQs)
What are the alternatives to 1-year CD Rates?
If you're looking for something other than one-year CDs, you could open a CD account with a shorter or longer term instead. High-yield savings accounts and money market accounts can also help you grow your money at higher rates, without having to worry about early withdrawal penalties.
Are there no-penalty CDs?
No-penalty CDs have no early withdrawal penalty if you take money out before maturity. While they're less common than other types of CDs, there are banks that offer them. Synchrony Bank, for example, has an 11-month no-penalty CD that features a competitive rate.
Should you consider short-term or long-term CDs?
Whether it makes sense to save in a short- or long-term CD can depend on your goals. If you know that you'll need the money you're saving fairly soon, a shorter-term CD might be best. On the other hand, if you don't have an immediate need to tap into savings, you may benefit from choosing a longer-term CD if it means earning a higher interest rate for a longer time period.
* APY — Annual Percentage Yield is accurate as of October 2nd, 2023.
** 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.
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