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These days, if you’re depositing your nestegg in a traditional savings account, you could be missing out on major interest gains.
Annual percentage yields (APYs) for certificates of deposit (CDs) are hitting 5.15%, and in some cases even higher, giving you the chance to boost your savings balance by switching to a certificate of deposit (CD). Reminder: A CD is a type of savings account that offers a fixed interest rate on a lump-sum deposit for a set period of time.
Because the bank or credit union is hanging onto your funds for a set amount of time, CDs usually carry higher APYs than other savings vehicles. They also typically come with penalties for making early withdrawals.
We rounded up a few of our top picks for 1-year terms that offered some of the highest rates across the nation.
Where CD rates stand today
According to the most recent figures, average national rates for a 1-year CD stand at 1.49%, over four times the average rate for traditional savings accounts. In April 2022, CD rates for 1-year terms stood at just 0.17%. And, while these rates represent an average across the entire country, many financial institutions have sweetened the deal for savers—offering upwards of 3-4 times that APY.
Why are rates on the rise? Well, a slew of federal funds rate increases have a little sometime to do with it. When the Fed moves to curb inflation by raising the federal funds rate, it makes borrowing more expensive. So, in an effort to retain customers, banks and credit unions will often raise APYs on deposit accounts to make consumers want to save more.
1-year terms offering 5.15%
We rounded up 1-year terms offering 5.15% as of today in order to help you choose the right CD for your savings. And, these CDs are available to customers across the U.S.
Colorado Federal Savings Bank
Colorado Federal Savings Bank is headquartered in Greenwood Village, CO, and serves consumers across the state of Colorado and the U.S. Its products include savings accounts, CDs, treasury and cash management services, and residential construction lending solutions.
CFSB’s 1-year CD offers a 5.15% APY, but it does require a $5,000 minimum deposit, which may be a stretch for new savers. This account is, however, fee-free. Savers won’t be responsible for any monthly maintenance, ACH, or online account fees. For savers who want more access to their savings, CFSB offers an 11-month no-penalty CD, although this account’s APY is significantly lower at 3.10%.
APY: 5.15%
Minimum opening deposit: $5,000
Early withdrawal penalty: 90 days of interest
Other CD rates:
- 1-month CD: 1.00%
- 2-month CD: 0.75%
- 3-month CD: 2.55%
- 6-month CD: 4.40%
- 18-month CD: 4.90%
- 24-month CD: 4.35%
- 36-month CD: 3.95%
- 60-month CD: 3.95%
Crescent Bank
Founded in 1991, Crescent bank is a New Orleans-based bank that serves consumers across the U.S. Its products include online CDs, auto loans, money market accounts, personal checking accounts, commercial products, and more.
Crescent’s 1-year CD offers a competitive APY and other perks like automatic renewal at the end of your CD term, online banking access, and zero maintenance fees.
APY: 5.15%
Minimum opening deposit: $1,000
Early withdrawal penalty: 90 days of interest
Other CD rates:
- 18-month CD: 5.10%
- 24-month CD: 5.10%
- 30-month CD: 4.55%
- 36-month CD: 4.55%
- 48-month CD: 4.55%
- 60-month CD: 4.50%
MYSB Direct
MYSB Direct, AKA M.Y. Safra Bank is headquartered in New York City and operates a single branch there. Its products include personal checking and savings accounts, lending services, cash management services, and more.
MYSB’s 1-year CD boasts a competitive APY and lower minimum deposit than other CD’s we’ve compared, however it does impose the highest withdrawal penalty should you dip into your CD before it reaches maturity. Its early withdrawal penalty requires savers to forfeit all interest earned on their balance.
APY: 5.15%
Minimum opening deposit: $500
Early withdrawal penalty: All interest earned
Other CD rates:
- 3-month CD: 1.50%
- 6-month CD: 5.00%
- 7-month CD: 1.00%
- 18-month CD: 4.76%
- 24-month CD: 4.51%
- 36-month CD: 4.50%
- 48-month CD: 4.36%
- 60-month CD: 4.40%
Popular Direct
Popular Direct’s parent company, Popular Bank, has roots that stretch back to 1893 and offers a number of financial products and services to customers across the U.S., Puerto Rico, and the Caribbean. Its products include CDs and savings accounts.
Popular Direct’s 1-year CD has the highest opening deposit at $10,000. For savers who are just getting started, this CD may not be the right fit. However, this account does offer online and mobile banking access and round-the-clock customer support.
APY: 5.15%
Minimum opening deposit: $10,000
Early withdrawal penalty: 120 days of simple interest.
Other CD rates:
- 3-month CD: 4.10%
- 6-month CD: 4.75%
- 18-month CD: 4.90%
- 24-month CD: 4.60%
- 36-month CD: 4.45%
- 48-month CD: 4.30%
- 60-month CD: 4.50%
The takeaway
If you’re looking for somewhere to keep your savings, a 1-year CD may be a worthwhile option. It could give you the opportunity to earn interest on your balance without committing to locking up your money for years on end. Although, you should carefully consider your savings goals and timeline before opting for a CD as your primary savings vehicle.
