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Whether you’re growing your savings for a long-term goal like retirement or looking to build a nice cushion for a goal only a year down the line, a certificate of deposit (CD) can be an effective savings vehicle to help you hit your goal.
CDs are a type of deposit account, typically offered by banks and credit unions, that usually offer higher interest rates than your average savings account. The reason is that CDs hold savers accountable to a certain term (usually anywhere between seven days and 10 years), during which time the account holder is unable to touch their funds. Most, but not all, accounts charge a penalty for withdrawing that money before the end of your CD’s term, also known as its maturity date.
One major factor you’ll need to consider when choosing a CD is the account’s term length. For the saver with a specific short-term goal in mind, a one-year CD can be a great way to help your savings grow without committing to locking up your money for an extended amount of time. The Fortune Recommends editorial team ranked more than 40 CDs with one-year terms and came up with a list of our top 10 picks. We weighed minimum deposits to open an account, annual percentage yields (APYs), compounding frequency, and customer service options. (Read our full methodology here.)
Current one year CD rates for our top picks*
- CFG Bank: 5.15%
- BMO Harris: 4.75%
- VIO Bank: 4.65%
- PenFed Credit Union: 4.60%
- Barclays Bank: 5.00%
- American Express: 4.50%
- Ally Bank: 4.50%
- Bethpage Federal Credit Union: 4.25%
- Marcus by Goldman Sachs: 4.50%
- Prime Alliance Bank: 4.50%
*Last updated March 31, 2023
The 10 best 1-year CD rates
Here is our list of the best one-year CDs according to Fortune Recommends editors. Note: Minimum deposit requirements, APYs, and other numbers in our list are up to date as of Feb. 21, 2023, but are subject to change.
1. CFG Bank: For savers who are on the hunt for the highest APY
Key numbers
Minimum opening deposit: $500
1-year APY: 5.15%
Penalty: One-year CD accounts are subject to an early withdrawal penalty equal to 90 days’ worth of simple interest.
Why we picked it:
CFG Bank, a Maryland-based bank, took our top slot for one-year CDs—boasting a 5.15% APY, almost four times the national average for one-year CDs. The minimum opening deposit for this account is on the lower end compared to other CDs in the space, and interest is compounded daily. Customer service representatives can be reached by telephone, Monday through Friday, 8:30 a.m. to 5 p.m. EST and customers can also contact CFG 24/7 via email or its online and mobile banking platforms.
2. BMO Harris: For long-time savers
Key numbers
Minimum opening deposit: $1,000
1-year APY: 5.00%
Penalty: One-year CD accounts are subject to an early withdrawal penalty equal to 180 days’ worth of simple interest.
Why we picked it
BMO Harris’ 1-year CD had the second highest APY on our list at 5.00%—more than three times the national average. This account came in second for its higher minimum opening deposit. At $1,000 to start, this CD is likely better suited for more established savers. Interest on this account compounds daily and BMO offers a wide range of other CD terms, from 3 months to 60 months. BMO Harris representatives are available to assist you via telephone from 7:00 a.m. to 10:00 p.m. CT on weekdays and 8 a.m. to 8 p.m. on Saturdays and Sundays. The bank also offers a contact form for email support on its website.
3. Vio Bank: For the saver who prefers a more lenient withdrawal penalty—just in case
Key numbers
Minimum opening deposit: $500
1-year APY: 4.50%
Penalty: The penalty for making an early withdrawal is equal to 1% of the amount withdrawn, plus a $25 fee.
Why we picked it
Vio Bank’s 1-year CD boasts an APY of 4.50% for a minimum opening deposit of $500. While we have other accounts on our list with similar APYs and opening deposits, Vio Bank’s early withdrawal penalty is more lenient than others, charging a penalty of just 1% of the amount withdrawn and a $25 fee. Vio’s customer service representatives are available via phone from 7:00 a.m. through 9:00 p.m. CST Monday through Friday; 8:00 a.m. until 6:00 p.m. CST on Saturday; and 12 p.m. until 4 p.m. CST on Sunday. Representatives can also be reached via chat on the bank’s website.
4. PenFed Credit Union: For the saver who is serious about locking up their funds
Key numbers
Minimum opening deposit: $1,000
1-year APY: 4.60%
Penalty: If you make a withdrawal within the first year of opening your account, you’ll forfeit all dividends.
Why we picked it
Pentagon Federal Credit Union (PenFed) is a Virginia-based credit union that offers online banking options in addition to a few brick-and-mortar locations across the U.S. and a mobile app. Dividends are compounded daily, but posted to accounts on a monthly basis. This account’s APY is on the higher end, but customers should beware that making an early withdrawal could cost them all their dividends. For any questions, customers can reach PenFed by email, chat, or phone Monday to Friday, 7:00 a.m. to 11:00 p.m. EST, 8:00 a.m. to 11:00 p.m. EST on Saturday, and 9:00 a.m. to 5:30 p.m. EST on Sunday.
5. Barclays Bank: For the saver who has never seen the inside of their bank’s branch
Key numbers
Minimum opening deposit: $0
1-year APY: 4.50%
Penalty: For one-year terms, the penalty is 90 days’ simple interest.
Why we picked it
Barclays is a U.K.-based bank that operates its U.S. accounts solely online; U.S.-based account holders will need to do all of their banking on the Barclays website or through the mobile app. Interest on this CD is compounded daily, and there is no minimum opening deposit—which leaves it up to the account holder to decide how much to put away. The good news: Customers can contact representatives for support 24/7.
6. American Express: For savers who like to keep all of their financial products under one roof
Key numbers
Minimum opening deposit: $0
1-year APY: 4.50%
Penalty: For one-year terms, the penalty is 270 days’ simple interest on the withdrawn amount.
Why we picked it
The online 1-year CD from American Express made our list for its competitive APY and zero-dollar minimum opening deposit. For savers who like to keep all of their accounts under one roof, this CD could be a viable option. American Express has a history that stretches back to 1850 and has since become globally recognized for its credit cards, rewards, personal, and business banking products. It also has a wide network of over 37,000 free ATMs. Bonus: Customer support specialists are available 24/7 over the phone or via live chat.
7. Ally Bank: For the saver who wants to test-drive a CD account
Key numbers
Minimum opening deposit: $0
1-year APY: 4.25%
Penalty: There is an early withdrawal penalty equal to 60 days of interest.
Why we picked it
Ally Bank is an online-only bank that offers a $0 down CD. Account holders can deposit as little as they want to and can earn 4.25% on their funds. Once the CD matures, they also have the opportunity to earn a 0.05% loyalty reward if they renew their CD. Interest on this CD is compounded daily, and customers can contact Ally with any questions or concerns 24/7 via online chat, email, or phone.
8. Bethpage Federal Credit Union: For the saver who prefers a credit union over a big bank
Key numbers
Minimum opening deposit: $50
1-year APY: 4.40%
Penalty: The penalty for one-year terms is equal to 90 days’ worth of dividends on the principal amount withdrawn.
Why we picked it
Bethpage Federal Credit Union is a New York–based credit union that offers a number of financial products including checking accounts, money market accounts, credit cards, and more. There are more than 30 branch locations around the New York-area. This CD made our list for its relatively low minimum deposit and high APY. Plus, interest on this account compounds daily. Customers can ask questions about their account by calling Bethpage via phone on weekdays between 7:30 a.m. and 7 p.m. ET, and on Saturdays between 8 a.m. and 2 p.m.
9. Marcus by Goldman Sachs: For savers who prefer to do their banking online
Key numbers
Minimum opening deposit: $500
1-year APY: 4.50%
Penalty: For one-year terms, the penalty is 90 days’ simple interest.
Why we picked it
Marcus by Goldman Sachs operates on an online-only model that offers a wide range of banking products, including one-year CDs. Interest on these accounts is compounded daily, and this account boasts an APY of 4.50%, which can translate to major savings over the course of a year. Marcus also has a 10-day CD guarantee which guarantees that customers will be granted a higher APY if rates increase within the first 10 days of opening an account that has at least $500 in it. Like many online banks, Marcus also offers a mobile banking app, and for those who may need extra assistance, customer service representatives are available 24/7 via telephone or online chat.
10. Prime Alliance Bank: For the no-frills saver who wants a high APY but doesn’t need a ton of customer service help
Key numbers
Minimum opening deposit: $500
1-year APY: 4.50%
Penalty: For one-year terms, the penalty is 90 days’ interest.
Why we picked it
Prime Alliance Bank, headquartered in Woods Cross, Utah, offers checking, savings, money market accounts, and more. Customers across the nation can do their banking online or via Prime Alliance’s mobile application. This CD boasts a 4.50% APY for a minimum deposit of $500. Interest on this account compounds daily. One major downside: Prime Alliance does not offer late customer service hours. For assistance, customers can reach a representative over the phone Monday through Friday, between 8:30 a.m. and 5:00 p.m. (MST) or via email.
What is a 1-year CD?
Banks and credit unions typically offer a wide range of CD terms. One-year CDs require account holders to deposit their money in one lump sum and leave their funds untouched for 12 months. After that period of time has passed, the CD has officially reached maturity and the account holder can withdraw funds (plus any interest accrued) or roll over those funds into a new CD.
CDs with shorter terms can be a flexible option for savers who are not playing the long game and don’t want to tie up their funds for years on end, but the tradeoff is often that accounts with shorter term lengths tend to have lower APYs.
What are the different types of CDs?
Aside from varying term lengths, some CDs come with unique rules or features that may be better suited for you and your savings goals. A few common CD types include:
- High-yield CD: A CD that offers a higher-than-average APY.
- Jumbo CD: In exchange for a higher interest rate, these CDs require higher minimum deposits than standard CDs—usually $100,000 or higher.
- Bump-up CD: When interest rates increase, a bump-up CD gives account holders the option to increase their CD’s APY as their account continues to mature.
- Add-on CD: These CDs give you the option to deposit additional funds in your CD after you’ve made your initial deposit.
- No-penalty CD: These CDs won’t charge you a penalty for withdrawing funds before your CD matures.
As you’re weighing your options, consider all of the perks of a CD account, as well as any possible penalties associated with each account. Knowing how much potential your money has to grow over the course of your preferred timeline—and what will happen if you end up needing access to your funds sooner rather than later—can help you make the right decision for you and your financial plan.
Best CD rates for other terms
Our methodology
The Fortune RecommendsTM team compared one-year certificates of deposit (CDs) from more than 50 major banks, credit unions, and online-only banks. Our top picks are available across the U.S., so you can sign up for an account no matter where you’re located.
We ranked the best one-year CDs on the following categories:
- 1-year term (50%): This number represents the real rate of return on your balance; the higher the APY, the better.
- Minimum deposit requirement (20%): In order to open a CD at any financial institution, it will require that you deposit a minimum dollar amount.
- Compound frequency (15%): Interest on deposit accounts like CDs can compound daily or monthly. The more frequency interest compounds on your CD, the better.
- Customer service (5%): Top picks offer customers three ways to get in contact: chat support, by phone, or even email. Among the three options, we gave the phone support the most weight.
The best CDs offer APYs twice the national average. We didn’t include brokered CDs on our list, which are sold on the secondary market through brokerages instead of banks and can be riskier because of this.
The rates, fees, and minimum deposit requirements for CDs are available for limited time periods, and APYs are subject to fluctuation, which could impact how much interest you earn. All the bank and credit unions on this list are insured by the FDIC and NCUA respectively. Should you choose to terminate your CD before it matures, you may likely be subject to a penalty, which varies by bank.
