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Best 1-year CD rates - May 2022

Best available rates across different account types for Friday, May 20, 2022

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Certificates of deposits (CDs) are safe savings vehicles for investors looking to avoid risk. If you keep your funds locked up in the bank for the entire term, whether it’s three months, a year, or longer, you can expect to get back your initial deposit plus interest.

A one-year CD likely won’t pay the highest CD rates available in the market. But the benefit short-term CDs offer is the ability to move your money to an account with a higher yield, if one is available.

Calculate how much interest you can earn using Bankrate’s CD calculator, and use your findings to compare offers to see what’s best for you.

Top banks offering 12-month CD rates for May 2022

Live Oak Bank: 1.75% APY, $2,500 minimum deposit

4.2

Overview

Live Oak Bank offers seven terms of CDs, from six months to five years. All CDs have a $2,500 minimum deposit requirement.

Live Oak Bank also offers an online savings account, which doesn’t have a minimum balance requirement.

Invest Rate
1.75% APY
Loan
$2,500 minimum deposit to open

Bread Savings (formerly Comenity Direct): 1.50% APY, $1,500 minimum deposit

4.1

Overview

Bread Savings, formerly Comenity Direct, is an online bank that offers a high-yield savings account and five terms of CDs ranging from one year to five years.

Bread Savings is part of Comenity Capital Bank, which is a unit of Bread Financial.

Invest Rate
1.50% APY
Loan
$1,500 minimum deposit to open

Barclays Bank: 1.30% APY, $0 minimum opening deposit

Barclays logo
3.9

Overview

Barclays was founded in London more than 300 years ago. Barclays has no minimum balance requirements to open an online CD.
 
It offers nine CD terms ranging from three months to 60 months. It also has a savings account.
Invest Rate
1.30% APY
Loan
$0 minimum deposit to open

Marcus by Goldman Sachs: 1.30% APY, $500 minimum deposit

Marcus logo
4.2

Overview

Marcus is the online-banking unit of Goldman Sachs geared to consumers. Marcus offers nine terms of CDs, three no-penalty CD terms and a savings account.
 
Marcus CDs require a $500 minimum to open, but its savings accounts have no minimum-deposit requirement.
Invest Rate
1.30% APY
Loan
$500 minimum deposit to open

TAB Bank: 1.30% APY, $1,000 minimum deposit

4.7

Overview

TAB Bank was established in 1998 in Ogden, Utah, as a banking service inside truck stops. TAB (Transportation Alliance Bank) serves businesses and individual customers.
 
It offers several checking accounts, a couple of savings account options, a money market account and CDs in eight terms, from six months to five years.
Invest Rate
1.30% APY
Loan
$1,000 minimum deposit to open

LendingClub Bank: 1.30% APY, $2,500 minimum deposit

LendingClub logo
4.4

Overview

LendingClub Bank acquired Radius Bank in early 2021. LendingClub Bank offers a high-yield savings account, a one-year CD and checking accounts. LendingClub Bank is a subsidiary of LendingClub Corp.

Invest Rate
1.30% APY
Loan
$2,500 minimum deposit to open

First Internet Bank of Indiana: 1.26% APY, $1,000 minimum deposit

4.6

Overview

First Internet Bank of Indiana was the first FDIC-insured financial institution to operate entirely online, according to the bank’s website. It launched in 1999 and its products are available in all 50 states.
 
First Internet Bank offers eight terms of CDs, a money market savings account with a competitive yield, a savings account and two checking accounts.
Invest Rate
1.26% APY
Loan
$1,000 minimum deposit to open

Capital One: 1.25% APY, $0 minimum deposit

4.6

Overview

Capital One is based in McLean, Virginia, and has both a brick-and-mortar presence and is an online bank. It offers nine terms of regular CDs.
 
Capital One’s CDs and its 360 Performance Savings account have no minimum balance requirements.
Invest Rate
1.25% APY
Loan
$0 minimum deposit to open

CIBC Bank USA: 1.25% APY, $25,000 minimum deposit

4.0

Overview

CIBC Bank USA, formerly The PrivateBank and Trust Co., was founded in 1991 and is based in Chicago. It was renamed CIBC Bank USA.
 
CIBC Bank USA offers its CDs online along with a high-yield savings account that pays a competitive yield.
Invest Rate
1.25% APY
Loan
$25,000 minimum deposit to open

American Express Bank: 1.20% APY, $0 minimum deposit

3.9

Overview

American Express is well-known for its credit cards and it’s also one of the leaders in the online banking space. But it also offers a competitive yield on some of its CDs and its savings account. It also has a checking account that made its debut in 2022.
 
Its savings account doesn’t require a minimum balance, so it may be a good fit for new and experienced savers.
Invest Rate
1.20% APY
Loan
$0 minimum deposit to open

Synchrony Bank: 1.20% APY, $0 minimum deposit

4.3

Overview

Synchrony Bank has 12 terms of CDs, ranging from three months to five years.
 
Synchrony Bank’s high-yield savings account and money market account also don’t require a minimum balance.
Invest Rate
1.20% APY
Loan
$0 minimum deposit to open

Limelight Bank: 1.20% APY, $1,000 minimum deposit

2.7

Overview

Limelight Bank is a division of Capital Community Bank, with headquarters in Provo, Utah. Limelight Bank calls itself a conscientious bank that ties its business to eco-friendly initiatives. Savings deposits at Limelight Bank turn into loans for solar projects, according to its website.
 
Limelight Bank only offers CDs on its website.
Invest Rate
1.20% APY
Loan
$1,000 minimum deposit to open

TIAA Bank: 1.20% APY, $1,000 minimum deposit

4.8

Overview

TIAA Bank Basic CDs range in terms from three months to five years and require a $1,000 minimum deposit to open.
 
TIAA Bank is a division of TIAA FSB. TIAA Bank had nine branches as of September 2021, all in Florida.
Invest Rate
1.20% APY
Loan
$1,000 minimum deposit to open

3.4

Overview

Popular Direct offers term certificates of deposit and a savings account. CDs have a $10,000 minimum deposit requirement, and the Ultimate Savings account requires a $5,000 minimum deposit.
 
All Popular Direct deposit accounts are opened through Popular Bank.
Invest Rate
1.20% APY
Loan
$10,000 minimum deposit to open

Vio Bank: 1.00% APY, $500 minimum deposit

4.1

Overview

Vio Bank, established in 2018, is the national online division of MidFirst Bank.
 
Vio Bank offers both a High Yield Online Savings account and 10 terms of CDs, which range from six months to 10 years.
Invest Rate
1.00% APY
Loan
$500 minimum deposit to open

Discover Bank: 1.00% APY, $2,500 minimum deposit

Discover logo
4.8

Overview

Discover Bank may be known for its credit cards, but it also offers a wide selection of banking products. It has been offering deposit products online since 2007.
 
Discover Bank offers CDs ranging in terms from three months to 10 years. It also offers a checking account, money market account and a savings account.
Invest Rate
1.00% APY
Loan
$2,500 minimum deposit to open

Sallie Mae Bank: 1.00% APY, $2,500 minimum deposit

4.5

Overview

Sallie Mae Bank offers CDs, a savings account, money market account, credit cards and private student loans.
 
Sallie Mae Bank offers a competitive yield on all of its deposit products.
Invest Rate
1.00% APY
Loan
$2,500 minimum deposit to open

Compare no-penalty CDs

Traditional CDs typically come with early withdrawal penalties that can significantly reduce your earnings. To avoid forfeiting interest for closing out your account before the term officially ends, consider looking for liquid or no-penalty CDs. A no-penalty CD might be a good option during uncertain economic times.

Just keep in mind that the yields associated with no-penalty CDs tend to be lower than the rates tied to traditional CDs.

These four banks offer no-penalty CDs:

  • Ally Bank: 11 months; 0.60% APY, $0 deposit to earn top APY
  • Marcus by Goldman Sachs: 7-13 months; 0.35%-0.75% APY, $500 minimum deposit (13-month CD is 0.75% APY)
  • CIT Bank: 11 months; 0.30% APY, $1,000 minimum deposit
  • PurePoint Financial: 11-14 months; 0.10%-0.15% APY, $10,000 minimum deposit (11-month CD is 0.15% APY)

1-year CD FAQs

What is a 1-year CD?

Having a one-year CD means that your savings will be tied up for 12 months. Generally, you won’t be able to access your funds during that period of time without incurring an early withdrawal penalty. In exchange, you’ll earn a higher yield than you would from a standard savings account or money market account.

Who should open a 1-year CD?

If you’re not planning to touch your money for a year and believe the benefits of a one-year CD are more attractive than the yield associated with a liquid savings account, then a one-year CD is worth considering.

Today’s top nationally widely available one-year CDs pay 0.65 percent APY. That’s not enough to retire on, but it’s a good vehicle to meet short-term financial obligations (like saving for a down payment on a house) that can let your money grow near the rate of inflation without having to worry about missing out on better deals that arrive after you invest.

How CD rates work

Banks and credit unions set their own CD rates based on multiple factors, including inflation, and the rates set by competitors. Changes in Treasury yields and Federal Reserve interest rate decisions are taken into account as well.

Some banks have a 10-day best rate guarantee, meaning you could end up with a better rate if the bank raises theirs within days of your decision to open and fund your account. But generally, once you open and fund a fixed-rate CD, you’re stuck with that APY until your term ends. Over time, the bank may raise or lower the advertised rate for new account holders, but your rate will remain the same.

If you do your research, you’ll find that some institutions offer bump-up or step-up CDs that allow rates to change either upon request or at certain intervals during the term. Rates for these CDs, however, tend to be lower than those tied to fixed-rate CDs.

When reviewing CD rates, pay close attention to the APY. The APY includes the effects of compounding. Compound interest is the interest you earn on interest.

Calculate how much interest you’ll earn as you compare APYs.

Right now, CD rates remain at historic lows, so it pays to shop around to find the best deal. Be sure to research local banks and reputable online banks, where you may be able to find a better rate.

Can you lose money with a 1-year CD?

As long as you choose a one-year CD with a fixed rate — and keep the funds in the CD for the duration of the term — you won’t lose money. If you withdraw before the term of the CD allows, you may be subject to an early withdrawal penalty.

Also, each depositor at an FDIC-backed bank is insured for up to $250,000. No depositor has lost any money on FDIC-insured funds as a result of a bank failure, according to the FDIC website. If you’re concerned about FDIC insurance eligibility, use the FDIC’s Electronic Deposit Insurance Estimator.

It’s also important to factor in rising prices. If the rate of inflation is higher than your CD yield, your purchasing power goes down.

1-year CD vs. other investment accounts

Before you buy a one-year CD, it’s important to find out how it stacks up against other types of investment vehicles. Read on to find out how one-year CDs compare to more liquid accounts, like savings accounts and money market accounts.

1-year CD vs. savings account

CDs with terms lasting for one year often pay more interest than traditional savings accounts. Here’s why: You’re rewarded with a higher yield in exchange for agreeing to leave your money tied up for a set period of time.

What’s more, if you keep money locked up in a CD, it’s harder to access those savings. With a liquid savings account, there is usually no consequence for withdrawing funds (unless you make more than six withdrawals or transfers per statement cycle). Since your CD may have an early withdrawal penalty, you’ll probably think twice about raiding your savings.

Another benefit one-year CDs have over savings accounts is the guaranteed rate that applies for the full term. Savings account rates can change at any time as a result of changes in an interest rate environment or a bank’s priorities. That means over time, your rate of return could decline.

There are downsides to choosing a one-year CD over a savings account. Because CDs traditionally are not liquid accounts, it’s best to keep your emergency fund in a savings account. That way, you can easily access the funds you need to cover an unexpected expense without paying a penalty. Additionally, just as savings account interest rates can go down, they can also go up. By locking your money up in a CD, you could miss out on an opportunity to earn more interest.

1-year CD vs. money market account

Another option is parking your cash in a money market account. At some banks, the money market account requires a higher minimum deposit and pays more interest than the institution’s savings account.

Compared to money market account rates, however, one-year CD rates tend to be higher. In many cases, you can qualify for one of the top 12-month CD deals without having to fork over a large amount of cash. At banks with a tiered interest rate structure, you may have to deposit more money to earn the top money market account rate.

Like high-yield savings accounts, money market accounts are worth considering if you’re not interested in tying up money for months or years at a time. You can easily withdraw your savings at any time without penalty, and at some banks, you’ll have access to a debit card. Keep in mind that money market accounts are usually limited to a maximum of six convenient transfers or withdrawals per month or per statement cycle because of Regulation D. There may be a fee for exceeding this limit. But these days some banks are allowing more transactions per statement cycle on savings deposit accounts. Union Bank, for instance, currently doesn’t have limits on the number of checks you can write from its MoneyMarket account.

1-year CD vs. a 5-year CD

While a five-year CD might have a higher APY, a shorter-term CD can be a better option. CD rates could change significantly in a year and you might not want to miss out on a good deal. Given the current interest rate environment, however, going with a long-term CD like a four- or five-year CD doesn’t make sense for many people.

Carefully weigh the pros and cons, and consider using a CD laddering strategy to take advantage of different CD term lengths.

Here are the best 1-year CD rates for May 2022

Financial Institution 1-Year APY Minimum Deposit for APY Learn More
Live Oak Bank
1.75%
$2,500
Read review
Bread Savings (formerly Comenity Direct) 1.50% $1,500 Read review
Barclays Bank
1.30%
$0
Read review
Marcus by Goldman Sachs 1.30% $500 Read review
TAB Bank
1.30%
$1,000
Read review
LendingClub Bank 1.30% $2,500 Read review
First Internet Bank of Indiana
1.26%
$1,000
Read review
Capital One
1.25%
$0
Read review
CIBC Bank USA
1.25% $25,000 Read Review
American Express Bank
1.20%
$0
Read review
Synchrony Bank
1.20%
$0
Read review
Limelight Bank
1.20%
$1,000
Read review
TIAA Bank
1.20% $1,000 Read review
Popular Direct 1.20% $10,000 Read review
Vio Bank
1.00% $500 Read Review
Discover Bank
1.00% $2,500 Read review
Sallie Mae Bank
1.00% $2,500 Read review

Learn more about other CD terms:

Banks usually offer CDs across multiple terms. Depending on the institution, you may have the option of choosing an account maturing in less than a year. There are also CDs that mature in as many as 10 years.

Carefully consider your financial goals and needs. Weigh your options and make an informed decision about what CD is right for you. You might be perfectly fine with a short-term, one-year-CD. Or you may find that you’re better off opting for an account with a longer term.