Best 1-Year CD Rates of July 2024: Secure Savings for One Year (2024)

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The average rate for a 1-year CD in the U.S. is 1.86% APY (Annual Percentage Yield). However, the best online banks pay well over 5% APY on a 1-year CD.

The best CD rate on a 1-year CD is 5.44% APY from EagleBank. You can open an online CD if you do not live near a branch in Maryland, Virginia, or Washington, DC, as long as you're not a resident of California, Vermont, or Nevada.

We check rates daily to find the best rates for 1-year terms. Here are our recommendations for the best 1-year CDs.

Best 1-Year CD Rates

• EagleBank 12 Month CD: 5.44% APY
• USALLIANCE Financial 1 Year Certificate: 5.40% APY
• State Bank of Texas 1 Year CD Special: 5.40% APY
• CFG Bank 1 Year CD: 5.36% APY
• TotalDirectBank 1 Year CD: 5.35% APY
• Bask Bank 1 Year CD: 5.30% APY
• Popular Direct 1 Year CD: 5.30% APY
• First Internet Bank of Indiana 1 Year CD: 5.26% APY
• Western Alliance Bank 1 Year CD, powered by Raisin: 5.25% APY
• Limelight Bank 1 Year Online CD: 5.25% APY
• Forbright 1 Year Online CD: 5.25% APY

Compare the Best 1-Year CDs

The best 1-year CDs can be found mostly through online banks. Although, one credit union also has a high 1-year CD rate, too. We specify if there's other reasons why a particular CD stands out. For example, some CDs have low minimum opening deposits, low early withdrawal penalties, or even both.

1-Year CD Reviews

These are our picks for the best 1-year CD rates. Our top picks for CDs are protected by FDIC or NCUA insurance. If you're worried about bank failures, keep in mind money is safe at a federally insured financial institution. When a financial institution is federally insured, up to $250,000 per depositor is secure in a bank account.

EagleBank 12 Month CD

EagleBank CDs offers the highest 1-year CD rate available across banks. It also offers one of the best 6-month CD rates.

EagleBank has locations in Maryland, Virginia, and Washington, DC, so it can be a great local banking option if you live in these areas. You can also open online CDs ranging from 6 months to 18 months if you don't live near a branch as long as you don't live in California, Vermont, or Nevada.

You'll only be able to deposit a maximum of $500,000 into a CD. Another downside to banking with EagleBank is that its mobile banking app has lackluster ratings in both the Google Play and Apple stores.

APY for a 1-year CD: 5.44%APY

1-year CD early withdrawal penalty: 3 months of interest

USALLIANCE Financial 1 Year Certificate

USALLIANCE Financial offers several strong rates on its CDs, including one of our best rates on 1-year CDs. It also offers a relatively low minimum opening deposit of $500.

To open a bank account at the credit union, you must become a member. You may join USALLIANCE Financial if you live in a select area in Massachusetts, Connecticut, New Jersey, or New York; work for a select employment group; or become a member of the American Consumer Council, Arco of Westchester, Tread Lightly!, or Council of Community Services.

If you'd rather be part of a bank instead of a credit union, you choose another one of our top picks.

APY for a 1-year CD:5.40% APY

1-year CD early withdrawal penalty: 180 days of interest

State Bank of Texas 1 Year CD Special

State Bank of Texas has an online 12-month CD special paying 5.40% APY with a $50,000 minimum deposit. You can open the account regardless of where you live in the United States. You also might like this account if you're looking for low early withdrawal penalties on CDs.

Usually, banks compound interest daily, monthly, or quarterly on CDs. State Bank of Texas doesn't compound interest, though. Instead, you'll earn simple interest on the CD. This means you'd earn $2,800 in interest on a $50,000 deposit, whereas you'd earn around $2,880 if it compounded interest daily.

State Bank of Texas also doesn't offer any other online CD terms. If you're looking for more term lengths to build a CD ladder, you might prefer one of the other financial institutions on our list.

APY for a 1-year CD: 5.40% APY

1-year CD early withdrawal penalty: 60 days of interest

CFG Bank 1 Year CD

CFG Bank's 1-year CD may stand out if you're searching for a low minimum deposit of $500. The bank also lets you withdraw money from your CD without any penalty for the first 30 days of the CD, so if you're not totally sure how much money you want to put in your CD, CFG's 1-year CD may be a good choice.

CFG Bank only offers 1-year, 18-month, 3-year and 5-year terms. For more CD variety, consider other financial institutions.

Interest for an 1-year CD: 5.36% APY

1-year CD early withdrawal penalty: 90 days of interest

CFG Bank Review

TotalDirectBank 1 Year CD

The TotalDirect Bank 1 Year CD offers a competitive interest rate on a 1-year term. TotalDirectBank also pays high rates on 3-month and 6-month terms.

TotalDirectBank is the online-only division of City National Bank of Florida. TotalDirectBank CDs have a steep minimum opening deposit of $25,000 and a maximum deposit of $1 million. The online institution also doesn't operate in Florida, Somoa, Guam, the Northern Mariana Islands, or U.S. Virgin Islands.

APY for 1-year CD: 5.35% APY

1-year CD early withdrawal penalty: 90 days of interest

Bask Bank 1 Year CD

The Bask Bank 1 Year CD offers the highest interest rate at the bank. You also might like Bask Bank if you find one of the bank's savings accounts appealing. The online financial institution has a high-yield savings account that pays a great rate. Its mileage savings account is featured in our best bank accounts for travel.

Bask Bank has limited CD terms, though. If you're looking to open a CD with a term over 2 years, you might prefer another institution.

APY for 1-year CD: 5.30% APY

1-year CD early withdrawal penalty: 90 days of interest

Bask Bank Review

Popular Direct 1 Year CD

Popular Direct offers strong rates on several CDs, including its 1-year CD. Popular Direct might be a good choice if you're interested in opening multiple CDs with the same bank. It also has a high-yield savings account with great rates.

Popular Direct CDs require a high minimum opening deposit of $10,000. If you're looking to put less money in a CD, another one of our top picks might be a better choice for you. It also charges high early withdrawal fees for 1-year CDs.

APY for 1-year CD: 5.30% APY

1-year CD early withdrawal penalty: 270 days of simple interest

Popular Direct Review

First Internet Bank of Indiana 1 Year CD

First Internet Bank of Indiana pays a great interest rate on several CDs, including a 1-year term. This bank is also offers one of the best money market account rates.

First Internet Bank of Indiana compounds your interest monthly, not daily. Depending on how much money is in your CD, this may or may not make a significant difference.

APY for 1-year CD: 5.26% APY

1-year CD early withdrawal penalty: 180 days of interest

First Internet Bank of Indiana Review

Western Alliance Bank 1 Year CD

The Western Alliance Bank 1 Year CD is a competitive 1-year team available on Raisin.

Raisin is an online platform where you can find multiple CDs and high-yield savings accounts from different banks and credit unions.

This 1-year CD stands out in particular because it has one of the best 1-year CD rates available right now, and you can open an account with $1.

If you'd rather get a CD directly with a bank, you'll prefer one of our other top picks. Raisin also doesn't have any checking accounts, so it isn't the strongest option if you want to do all your banking in one place.

APY for 1-year CD: 5.25% APY

1-year CD early withdrawal penalty:90 days of interest

Raisin Review

Limelight Bank 1 Year Online CD

Limelight Bank, an online division of CCBank, offers a 1-year CD with a high interest rate. It also has a great interest rate on an 18-month term. The Limelight Bank CD may be a good choice if you'd like to open a CD with standard-to-low early withdrawal penalties.

You'll need at least $1,000 to open a CD. Some of our other picks let you open an account with $500 or less.

APY for 1-year CD: 5.25% APY

1-year CD early withdrawal penalty: 90 days of interest

Forbright 1 Year Online CD

Forbright Bank is an eco-friendly financial institution in Maryland that has nationwide online CDs. You might like Forbright if you value banking with a financial institution that aligns with your values. Forbright Bank has received a Fossil Free Certification, which means that it will not lend to fossil fuel companies or projects.

If you'd like to open a checking, savings, or money market account, you'll have to open an account at a branch in Maryland. Forbright Bank also has limited online CD terms. You may find more variety at other online banks.

APY for 1-year CD: 5.25% APY

1-year CD early withdrawal penalty: 3 months of interest

Bank Trustworthiness and BBB Ratings

We've compared each bank's Better Business Bureau score. The BBB grades businesses based on factors like responses to customer complaints, honesty in advertising, and transparency about business practices. Here is each company's score:

USALLIANCE Financial received a D- grade from the BBB because it has responded to a couple of customer complaints.

State Bank of Texas received an NR ("No Rating") grade from the BBB because there isn't sufficient information to rate the business yet.

CFG Bank does not currently have a rating from the BBB because its profile is currently being updated.

TotalDirectBank does not have a BBB page, but its parent bank, City National Bank of Florida, has an B- rating from the Better Business Bureau because it has not responded to two complaints.

Bask Bank received a B rating from the BBB due to several complaints filed against the business.

Raisin received a B+ grade from the BBB due to various complaints filed against the business.

EagleBank paid a civil penalty of $10 million in a settlement in 2022. The Securities and Exchange Commission accused the bank and former CEO and chairman Ronald D. Paul of making false and misleading statements about party loans relating to Paul's family trusts.

In 2023, the Federal Reserve Board required Popular Bank to pay a $2.3 million fine, claiming it processed Payment Protection Program loans even though potential instances of fraud were detected and not reporting the potential fraud in a timely manner.

In 2022, the U.S. Department of Treasury's Office of Foreign Assets Control required Banco Popular de Puerto Rico — the bank's Puerto Rico locations — to pay over $255,000 in a settlement that accused the bank of violating Venezuela Sanctions Regulations when processing transactions with two Venezuelan government employees.

What Influences the Best 1-Year CD Rates

Role of the Federal Reserve

The Federal Reserve is the central bank of the United States. One of its responsibilities is managing the federal funds rate. A committee meets at least eight times per year to discuss potential changes to rates.

Changes in the federal funds rate impact interest rates on banking products. CD rates go up during rate hikes and drop during rate cuts.

Market Fluctuations

Market fluctuations can also influence whether specific terms are more competitive than usual. Currently, short-term CD rates are higher long-term CD rates. If you compare our top 1-year CD rates with the best 5-year terms, the former is higher.

The reason why short-term CD rates are the most competitive terms right now is because Fed rate cuts are likely to happen in the future. The Fed wants inflation to get closer to 2% before cutting rates, though. To stay up to date on the Fed's decisions, pay attention to upcoming Fed meetings.

Competition Across Institutions

Banks also have their own criteria for setting CD rates. You might see banks with CD specials or promotions on 1-year terms. These promotions are sometimes limited to certain customers. You also might need to deposit money from another bank (often referred to as"new money" by banks).

How to Find the Best 1-Year CD for You

Of course, interest rates are important when finding the right 1-year CD. But you should also think about the minimum opening deposit — if you don't have enough money to open the CD that pays the highest rate, it's still worth opening a CD that pays a little less but has a minimum you can afford.

You should also think about the early withdrawal penalty. If a bank charges high penalties for taking money out early from a 1-year CD, it could wipe out any earnings you've accumulated. If you're worried about needing money early, you may prefer a no-penalty CD with a 1-year term — they aren't super common, but they do exist.

Pros and Cons of 1-Year CDs

Secure the Best Returns on a 1-Year CD

One-year CDs are paying great rates right now, and you'll earn that rate for the entire year. You don't have to worry about your rate decreasing — you know how much you're going to earn. The flip side is that you won't get to benefit from a higher rate if the bank increases its 1-year rates, but it's unlikely that CD rates will go up in 2024 anyway.

Although 1-year CDs are paying better rates than high-yield savings accounts right now, they also come with less flexibility. Savings accounts allow you to deposit more money at any time, while CDs don't let you put more in after making your initial deposit. You'll also pay a penalty if you withdraw funds early from a CD. If you decide to withdraw money early, most banks require you to take out the full amount, so you can't leave any in the account to continue earning interest.

CDs come with much less risk than investing your money in the stock market, because you have a guaranteed rate of return. It's possible you could earn less than with the stock market, but the market is unpredictable. Because one year is a relatively short amount of time, you may want to go with the safer choice by opening a CD instead.

Alternatives to a 1-Year CD

1-Year CD vs. Shorter-Term CD

You might prefer a 3-month CD or 6-month CD if you can't part with your money for a full year. The good news is that rates are high on short terms right now, too — the best 6-month CD rates are comparable to the best 1-year CD rates.

1-Year CD vs. Longer-Term CD

You may want to put money into a longer CD term if you know you won't need it for more than a year. Plenty of online institutions are paying great rates on terms up to five years. However, the best 1-year CD rates are higher than rates on longer terms right now.

Still, you may be interested in building a CD ladder, which involves splitting your money into multiple CD terms so you can access it at different times. For example, you could open a 1-year, 3-year, and 5-year CD, and you'd have access to your money and earned interest after one, three, and five years. This helps you avoid some risk. If you put all of your money into a 1-year CD with plans to put it back into another 1-year CD after the term ends, 1-year rates may be lower by then. But building a ladder, you lock in high rates now before rates have the potential to drop.

1-Year CD vs. High-Yield Savings Account

One-year CDs are paying even better rates than the best high-yield savings accounts. But you still might prefer the latter for two reasons: You can deposit money at any time, and you can withdraw money without paying a penalty. When trying to decide between CDs versus high-yield savings accounts, remember that both are great savings tools, so there's no reason you can't open both accounts to save for different goals.

1-Year CD vs. Money Market Account

A money market account is similar to a savings account, except it usually comes with some perks you'd get with a checking account, such as an ATM card, debit card, or paper checks. Basically, it makes it easier to access your money. The best money market accounts pay great rates, but they're still not as high as the best 1-year CD rates. A money market account could be a good fit if you want easier access to your savings, though, especially since CDs don't allow you to withdraw funds without paying a penalty.

1-Year CD FAQs

Why You Should Trust Us: Expert Advice on Choosing the Best CD

To learn more about what makes a good CD and how to choose the best fit, four experts weighed in:

How can you be sure you're picking the right bank?

Tania Brown, certified financial planner and vice president of coaching strategy at OfColor, says the most important thing is FDIC insurance, which protects your money if the bank were to collapse. For credit unions, the equivalent is NCUA insurance. Next, she says, consider the experience you want to have with your bank: Do you want to walk in and talk to a person? Then you need a bank with a local branch. Are you fine never speaking to someone in person? Then an online bank will work for you. Do you write checks (or not)? Then you need an account that comes with checks.

Sophia Acevedo, a certified educator in personal finance and banking editor for Business Insider, adds that it's a good idea to include costs in your list of priorities. For instance, is there a monthly fee for the account you want? If so, what are the requirements to waive it — and can you meet them? If it's important that you earn interest, you'll want to choose a bank and an account that pays a higher interest rate than the average bank account.

How do you choose between all the available CD terms?

Roger Ma, certified financial planner with lifelaidout® and author of "Work Your Money, Not Your Life", says you should start by deciding when you need the money, then looking at available rates for CDs with similar timing.

Knowing how you'll use the money you plan to put in a CD is central to the one you choose, says Mykail James, MBA, certified financial education instructor at BoujieBudgets.com. Perhaps it's a house fund — in that case, if you know that you want to buy a house in two years, you'll need to make sure your CD term ends by then.

When do you use a CD instead of a high-yield savings account or money market account?

Brown says you should know two things to help make this decision: how much money you'll be putting in, and how much you plan to interact with that money. If you're going to need to make transactions before the term of a CD ends, you'll have to choose a high-yield savings or money market account.

Acevedo adds that both the high-yield savings account and money market account can be good options for an emergency fund or short-term savings goals. The best savings accounts tend to offer strong interest rates, while money market accounts typically offer more access to your money, like paper checks or debit cards.

Our Methodology: How We Chose the Best 1-Year CDs

Business Insider's mission is to help smart people make the best decisions with their money. We understand that "best" is often subjective, so in addition to highlighting the clear benefits of a financial product or account — a high APY, for example — we outline the limitations, too. We spent hours comparing and contrasting the features and fine print of various products so you don't have to.

We regularly monitor CD rates at over 60 banks, credit unions, and banking platforms. We've also reviewed CDs at these institutions using our CD rates methodology to find the most well-rounded banking options.

For each CD, we compared the minimum opening deposits, early withdrawal penalties, and interest rates. We also considered the overall banking experience at each bank by assessing customer support availability, mobile app ratings, and ethics.