Best 1-Year CD Rates in February 2024: High yield savings accounts can certainly be beneficial for growing your money, but it’s worth considering certificates of deposit (CDs) as an alternative. CDs offer the advantage of earning interest for a predetermined period, and in some cases, they may offer higher annual percentage yields (APYs) compared to savings accounts, depending on your banking institution.
Discover® 12-Month CD
APY: 4.90%
Min. deposit: $2,500
Monthly fee: $0
Term:12 months
If you’re considering a 12-month CD option, comparing rates among banks and credit unions can assist you in finding the most favorable one-year CD rates. Here are the top one-year CD rates available across banks and credit unions.
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Best 1-year CD rates compared 2024
| Institution | APY* | Term | Min. deposit | Monthly fee |
|---|---|---|---|---|
| CIBC | 5.51% | 12 months | $1,000 | $0 |
| Bread Savings | 5.50% | 12 months | $1,500 | $0 |
| Popular Direct | 5.37% | 12 months | $10,000 | $0 |
| Barclays | 5.30% | 12 months | $0 | $0 |
| Quontic | 5.30% | 12 months | $500 | $0 |
| Synchrony | 5.00% | 12 months | $0 | $0 |
| Capital One | 5.00% | 12 months | $0 | $0 |
| Discover® Bank | 4.90% | 12 months | $2,500 | $0 |
| U.S. Bank | 4.80% | 13 months | $500 | $0 |
| CIT Bank | 4.65% | 13 months | $1,000 | $0 |
Our recommendations for best 1-year CDs
CIBC
APY: 5.51%
Min. deposit: $1,000
Monthly fee:$0
Term:12 months
CIBC provides some of the most competitive rates for one-year CDs, requiring a moderate minimum deposit of $1,000. However, for those who are keen savers, deposits of up to $5 million are permitted in a CD account.
Opening an account is convenient, as it can be done online, and you have the option to fund your initial deposit via electronic transfer or paper check. One aspect to consider is the frequency of interest compounding; CIBC compounds and credits CD interest monthly, rather than daily.
Bread Savings
APY: 5.50%
Min. deposit: $1,500
Monthly fee:$0
Term:12 months
Bread Savings provides one-year CDs with exceptionally competitive rates and no monthly fees. Opening an account requires $1,500, and upon maturity, you’ll have a 10-day grace period for renewal. Renewal rates currently slightly exceed the rates offered for new one-year CD accounts.
With Bread, you can deposit up to $1 million per account, and customers have a total deposit limit of $10 million, making it advantageous for those looking to invest significant sums in CDs. It’s important to note that standard FDIC coverage limits apply.
Popular Direct
APY: 5.37%
Min. deposit: $10,000
Monthly fee: $0
Term:12 months
The 1-year CD option offered by Popular Direct Bank is an excellent choice for savers seeking competitive rates without the need for a long-term commitment. Opening an account requires a minimum deposit of $10,000, the highest among the banks listed. However, there are no monthly maintenance fees or hidden charges associated with this account, making it an attractive option for those prioritizing low ongoing costs.
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Barclays
APY: 5.30%
Min. deposit: $0
Monthly fee: $0
Term:12 months
Barclays stands out as another leading option for competitive one-year CD rates and minimal fees. With no monthly fees and no minimum balance requirement to open an account, it offers a straightforward approach to saving. However, it’s essential to fund your account within 14 days of opening to maintain its active status and continue earning interest.
One notable aspect of Barclays is its exceptional customer service. In addition to 24/7 access to accounts through online and mobile banking, Barclays provides phone support seven days a week. This level of support can be invaluable for addressing any inquiries or issues that may arise while managing your account.
Quontic
APY: 5.30%
Min. deposit: $500
Monthly fee: $0
Term:12 months
Quontic is a digital bank renowned for its one-year CDs, which require a modest opening deposit of just $500. Savers can benefit from some of the most attractive rates available for 12-month CD terms, and Quontic’s rates remain competitive across its other CD options as well. One of the standout features of Quontic is its seamless online account opening process, which can be completed in as little as three minutes.
Interest is compounded daily, and CD renewal occurs automatically. However, it’s important to note that, as is customary with CDs, early withdrawal before the maturity date is typically discouraged and may incur a penalty fee.
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Synchrony
APY: 5.00%
Min. deposit:$0
Monthly fee: $0
Term: 12 months
Synchrony provides an 11-month no-penalty CD option, allowing you to withdraw funds early without sacrificing any accrued interest. This high-yield CD option could be ideal if you anticipate needing access to your funds before the CD matures.
Moreover, Synchrony Bank offers various other CD choices, such as bump-up CDs and standard CDs, with terms spanning from three to 60 months. Notably, there’s no minimum deposit requirement for these savings options. However, withdrawing funds early from a bump-up or standard CD may incur an early withdrawal penalty.
Discover® Bank
APY: 4.90%
Min. deposit: $2,500
Monthly fee: $0
Term :12 months
Discover® Bank provides an array of financial products, including 12-month CDs with competitive rates.
Consider opening a Discover® CD if you’re contemplating switching banks or prefer the convenience of managing multiple accounts in one place. It’s worth noting, though, that Discover® requires a minimum deposit of at least $2,500 to open a CD account. Member FDIC.
Capital One
APY : 5.00%
Min. deposit: $0
Monthly fee: $0
Term:12 months
Capital One provides one-year CDs along with CDs with varying terms, and there is no minimum deposit requirement to open an account. This feature could be advantageous if you’re new to saving or if you’re considering opening multiple CDs at the same bank or different banks.
The current yield on a one-year CD from Capital One ranks among the top available options. Additionally, you have the flexibility to choose how frequently interest is paid out—whether monthly, annually, or at the end of the term.
U.S. Bank
APY: 4.80%
Min. deposit: $500
Monthly fee: $0
Term: 13 months
While brick-and-mortar banks are generally not recognized for offering competitive CD rates, U.S. Bank stands out as an exception. In addition to traditional CDs, U.S. Bank provides CD specials with significantly higher APYs for savers. Existing U.S. Bank customers may also be eligible for a bonus rate.
The minimum deposit required for CD specials is $1,000. For those interested in constructing a CD ladder, U.S. Bank offers a variety of terms to select from, including the one-year CD option.
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CIT Bank
APY: 4.65%
Min. deposit: $1,000
Monthly fee: $0
Term:13 months
CIT Bank consistently ranks among the top choices for CD savers seeking the highest rates. With a range of CD terms available, opting for an 11-month no-penalty CD provides the most competitive APY.
Although the minimum deposit requirement of $1,000 is slightly higher compared to other banks, CIT’s No Penalty CD distinguishes itself by waiving early withdrawal penalties, unlike other online CD options.
Methodology
To identify the best CD rates, we conducted a thorough comparison of one-year CD accounts across various banks and credit unions. Our rankings were determined by evaluating factors such as minimum deposit requirements, interest rates, fees, and frequency of interest compounding. Only CDs that excelled across all these categories made it into our final rankings, ensuring that they represent the top options available.
How to select the best 1-year CD for you
When comparing one-year CDs from different banks, here are some important factors to consider:
- Minimum Deposit Requirements: Evaluate the minimum deposit required to open a CD. Some banks may have low minimums, while others may require larger deposits. Choose a CD with a minimum deposit requirement that fits your budget comfortably.
- Interest Rates (APY): Compare the Annual Percentage Yields (APYs) offered by different banks. Higher APYs mean faster growth of your money, so aim for the best rates available.
- Compounding Frequency: Banks may compound CD interest at different frequencies, such as daily or monthly. A higher compounding frequency results in quicker interest accumulation. Consider opting for CDs with more frequent compounding rates to maximize earnings.
- Early Withdrawal Penalty: Be aware of the penalty charged for withdrawing funds from a CD before maturity. Even if you don’t plan on early withdrawals, knowing the penalty amount can help you make informed decisions.
- Renewal Options: Understand the bank’s renewal policies. Many banks automatically renew CDs but offer a grace period during which you can make changes. Knowing the duration of this grace period can prevent unintentional renewal and allow you to make adjustments as needed.
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?
Opting for a one-year CD could be ideal if you’re saving for a specific short-term goal. Consider using a one-year CD to save for:
- Vacation expenses
- Purchasing new furniture
- Funding a planned move
- Acquiring a new-to-you vehicle
- Covering wedding expenses
Additionally, you might choose to open a 12-month CD account if you’re constructing a CD ladder. In a CD ladder, you stagger maturity terms, including 3-month, 6-month, 9-month, and 18-month CDs. This strategy ensures that a renewal opportunity is always close at hand, providing the flexibility to either withdraw your savings or roll them over to a new CD term.
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1-year CDs can help you save for near-term goals
A one-year CD provides a secure and stable avenue to store funds that you don’t intend to utilize immediately. While online banks often provide competitive CD rates, it’s advisable to also explore rates offered by traditional banks and credit unions. Ultimately, the optimal CD choice for you is the one that offers the highest rate while aligning with your savings objectives in terms of the duration of the term.