Best 1-year CD rates - August 2022
Best available rates across different account types for Tuesday, August 09, 2022
At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict , this post may contain references to products from our partners. Here’s an explanation for . Learn more about who we are and our promise to guide you through life’s financial journey.
What To Know First
Methodology for Bankrate’s Best CD Rates
At Bankrate, we strive to help you make smarter financial decisions. We follow strict guidelines to ensure that our editorial content is unbiased and not influenced by advertisers. Our editorial team receives no direct compensation from advertisers and our content is thoroughly fact-checked to ensure accuracy.
Bankrate regularly surveys around 70 widely available financial institutions, made up of the biggest banks and credit unions, as well as a number of popular online banks.
To find the best CDs, our editorial team analyzes various factors, such as: APY, the minimum needed to earn that APY (or to open the CD) and whether or not it is broadly available. All of the accounts on this page are insured by the Federal Deposit Insurance Corp. (FDIC).
When selecting the best CD for you, consider the purpose of the money and when you’ll need access to these funds to help you avoid early withdrawal penalties.
Best 1-year CD rates for August 2022
- Bread Savings (formerly Comenity Direct): 2.50% APY, $1,500 minimum deposit
- Live Oak Bank: 2.50% APY, $2,500 minimum deposit
- Marcus by Goldman Sachs: 2.40% APY, $500 minimum deposit
- TAB Bank: 2.35% APY, $1,000 minimum deposit
- Popular Direct: 2.35% APY, $10,000 minimum deposit
- Barclays Bank: 2.30% APY, $0 minimum deposit
- Capital One: 2.30% APY, $0 minimum deposit
- Synchrony Bank: 2.30% APY, $0 minimum deposit
- Limelight Bank: 2.30% APY, $1,000 minimum deposit
- Discover Bank: 2.30% APY, $2,500 minimum deposit
- Ally Bank: 2.20% APY, $0 minimum deposit
- CIBC Bank USA: 2.15% APY, $25,000 minimum deposit
- First Internet Bank of Indiana: 2.07% APY, $1,000 minimum deposit
- BMO Harris: 2.05%* APY, $1,000 minimum deposit
- LendingClub Bank: 2.01% APY, $2,500 minimum deposit
- American Express National Bank: 2.00% APY, $0 minimum deposit
- Citibank: 2.00% APY, $500 minimum deposit
- Vio Bank 2.00% APY, $500 minimum deposit
- TIAA Bank: 2.00% APY, $1,000 minimum deposit
- Sallie Mae Bank: 2.00% APY, $2,500 minimum deposit
- Citizens Access: 1.90% APY, $5,000 minimum deposit
Note: Annual percentage yields (APYs) shown are as of July 28, 2022. Bankrate’s editorial team updates this information regularly, typically biweekly. APYs may have changed since they were last updated and may vary by region for some products.
*APY is unavailable in Arizona, Florida, Illinois, Indiana, Kansas, Minnesota, Missouri and Wisconsin.
The following accounts can be found at most banks and credit unions. They’re federally insured for up to $250,000 and offer a safe place to put your money while earning interest.
Certificate of Deposit (CD)
CDs are best for individuals looking for a guaranteed rate of return that’s typically higher than a savings account. In exchange for a higher rate, funds are tied up for a set period of time and early withdrawal penalties may apply.
Checking accounts are best for individuals who want to keep their money safe while still having easy, day-to-day access to their funds. ATM and other transactional fees may apply.
Savings / Money Market Accounts (MMA)
Savings and MMAs are good options for individuals looking to save for shorter-term goals. They’re a safe way to separate your savings from everyday cash, but may require larger minimum balances and have transfer limitations.
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. The national average rate for one-year CDs is 0.52 percent according to Bankrate’s July 13 weekly survey of institutions.
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 1-year CD rates for August 2022
Live Oak Bank: 2.50% APY, $2,500 minimum deposit
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.
TAB Bank: 2.35% APY, $1,000 minimum deposit
Popular Direct: 2.35% APY, $10,000 minimum deposit
Barclays Bank: 2.30% APY, $0 minimum opening deposit
Capital One: 2.30% APY, $0 minimum deposit
Synchrony Bank: 2.30% APY, $0 minimum deposit
Marcus by Goldman Sachs: 2.40% APY, $500 minimum deposit
Limelight Bank: 2.30% APY, $1,000 minimum deposit
Discover Bank: 2.30% APY, $2,500 minimum deposit
Ally Bank: 2.20% APY, $0 minimum deposit
CIBC Bank USA: 2.15% APY, $25,000 minimum deposit
First Internet Bank of Indiana: 2.07% APY, $1,000 minimum deposit
BMO Harris: 2.05%* APY, $1,000 minimum deposit
LendingClub Bank: 2.01% APY, $2,500 minimum deposit
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.
American Express National Bank: 2.00% APY, $0 minimum deposit
Citibank: 2.00% APY, $500 minimum deposit
Vio Bank: 2.00% APY, $500 minimum deposit
TIAA Bank: 2.00% APY, $1,000 minimum deposit
Sallie Mae Bank: 2.00% APY, $2,500 minimum deposit
Citizens Access: 1.90% APY, $5,000 minimum opening deposit
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 banks offer no-penalty CDs:
- CIT Bank: 11 months; 1.90% APY, $1,000 minimum deposit
- Marcus by Goldman Sachs: 7-13 months; 0.35%-1.55% APY, $500 minimum deposit (13-month CD is 1.55% APY)
- Synchrony Bank: 11 months: 1.50% APY, $0 minimum deposit
- Ally Bank: 11 months; 1.25% APY, $0 deposit to earn top APY
- 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 2.50 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 1-year 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 August 2022
|Financial Institution||1-Year APY||Minimum Deposit for APY||Learn More|
|Bread Savings (formerly Comenity Direct)
|Live Oak Bank
|Marcus by Goldman Sachs
|TAB Bank||2.35%||$1,000||Read review|
|CIBC Bank USA
|First Internet Bank of Indiana
|American Express National Bank||2.00%||$0||Read review|
|Vio Bank||2.00%||$500||Read review|
|Sallie Mae Bank
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.