A one-month certificate of deposit matures in the span of just four quick weeks. Interest rates on these typically are low. That’s mostly because banks want account holders to lock up their money for longer periods of time. But you may prefer a one-month CD if you need to protect some cash for the short term and you think you’d be tempted to spend it.
While one-month CD rates are typically low, you can find accounts offering a competitive yield. Here are the best one-month CD rates to give you the highest return possible.
The best 1-month CD rates
- Virtual Bank: 1.65% APY; $10,000 minimum deposit
- Presidential Bank: 1.00% APY; $1,000 minimum deposit
- Mutual One Bank: 0.65% APY; $5,000 minimum deposit
- Northpointe Bank: 0.30% APY; $1,000 minimum deposit
- Colorado Federal Savings Bank: 0.25%; $5,000 minimum deposit
CD holders can get an APY of 1.90 percent on a one-month CD these days. You might want to try opening one of these if you want to earn a high yield on your cash – but you also want the flexibility to reinvest.
Best overall: Virtual Bank: 1.65% APY
VirtualBank opened in 2000 as an online-only venture to offer money market accounts, CDs and various forms of banking for private, commercial and business customers. The bank is a division of Iberiabank, which was founded in New Iberia, Louisiana, in 1887.
High rate: Presidential Bank: 1.00% APY
Presidential Bank, FSB, was launched in 1985 with headquarters in Bethesda, Maryland, and has branches throughout the metro Washington, D.C., area.
High rate: MutualOne Bank: 0.65% APY
MutualOne Bank was originally formed in 1889 as Framingham Co-Operative Bank. In 2012, Framingham Co-Operative Bank merged with Natick Federal Savings Bank, creating MutualOne Bank. Headquartered in Framingham, Massachusetts, MutualOne offers a full suite of services from checking and savings accounts to money market accounts, CDs, mortgages and more.
High rate: Northpointe Bank: 0.30% APY
Northpointe Bank opened in 1999 and is headquartered in Grand Rapids, Michigan. It has branches spread across 20 states and offers financial services from mortgages and auto loans to banking accounts and CDs.
High rate: Colorado Federal Savings Bank: 0.25%
Colorado Federal Savings Bank was established in 1990, then purchased by new owners in 2008. Now headquartered in Greenwood Village, Colorado, this bank offers savings and checking accounts, CDs, and mortgages.
A 1-year CD may be efficient
Though it may not seem like it can pay off, buying short-term CDs can be an efficient way to get a large amount of money covered by deposit insurance from the Federal Deposit Insurance Corp., or FDIC, without going all over town.
The FDIC limits insurance coverage to deposits of $250,000 per person, per account registration.
If you have a large amount of money to deposit — say, $1 million — you could spread them into four CDs of $250,000 at one bank instead of depositing $250,000 at four different banks.
Alternatives to 1-month CDs
If you don’t want to tuck away your money for a month, here are some alternatives to try instead:
Consider a savings account or money market account
A money market account or a high-yield online savings account may offer higher interest rates than a one-month CD. Additionally, you’ll be able to access your money quickly with no penalty. However, you’ll need to consider the trade-offs. Money market and high-yield savings accounts typically require higher balances and may restrict how you can access your money.
Choose a CD with a longer term
Generally, savers who tuck away their money in longer-term CDs can snag higher interest rates. For example, the average five-year CD rate is hovering around 1.2 percent. Still, you may find rates as high as 2.6 percent if you compare CD rates.
How to use a 1-month CD in a CD ladder
A CD ladder lets you take advantage of different CD maturities and interest rates. To start one, figure out how much money you can invest and how long you can put money away. Then open a few short- and long-term CDs with staggered maturity dates, and decide how much money you’ll put in each.
The short-term CDs allow you to take advantage of rising interest rates, while the long-term CDs will typically come with high rates. As an example, you may decide to use a one-month CD as your shortest rung, plus a six-month CD, one-year CD and three-year CD. Keep your money invested in the long-term CDs, and as the short-term CDs mature, you can decide whether to use the money or reinvest it into a higher-rate CD.