Best available rates across different account types for Monday, September 25, 2023
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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.
The national average yield for one-year CDs is 1.81 percent APY according to Bankrate’s weekly survey of institutions updated on Sept. 18, 2023. 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.
Note: Annual percentage yields (APYs) shown are as of Sept. 20, 2023. 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.
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.
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 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.
The Federal Reserve raised rates for the 11th time in the current cycle on July 26. This could potentially be the Fed’s last rate increase in the current cycle, but it’s impossible to predict the future of rates.
Now could be the time to lock in a long-term CD or even a one-year CD, since savings rates would likely decrease if the Fed starts cutting rates. But before you make this decision, make sure this is money you won’t need for the term of the 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.
At competitive online banks, CD rates will generally follow changes in Treasury yields. They might also follow other factors such as the rates set by competitors and the bank’s need for deposits.
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.
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 annual percentage yield (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.
A one-year CD at a bank insured by the Federal Deposit Insurance Corporation (FDIC) is a great option for anyone who has money they aren't planning to use for a year and that they want to keep safe. Just make sure that your money is within FDIC limits and guidelines.
There are higher-yielding potential investments out there. But the safety of FDIC insurance — backed by the full faith and credit of the U.S. government — and the fixed APY make a CD unique. That fixed APY means you can calculate exactly how much interest you’ll earn after a year.
A high-yield savings account is probably a better option for money that you might need in a few days, weeks or months. That way the money will be liquid and available to you without incurring an early withdrawal penalty.
Today’s top nationally widely available one-year CDs pay more than 5 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) and can let your money grow near the rate of inflation without you having to worry about missing out on better deals that arrive after you invest.
Your money is protected with FDIC insurance, as long as you’re within FDIC limits and guidelines.
You know exactly how much interest you’ll earn since generally CDs have fixed APYs — as long as you don’t withdraw funds from the CD before its term ends.
Knowing that there’s an early withdrawal penalty can prevent you from withdrawing this money if you don’t need to.
You can probably earn more through other investments. But you might also lose money from those investments since they probably don’t have a guaranteed, fixed yield.
CDs have early withdrawal penalties. So if you unexpectedly need this money, you could lose interest — and even potentially some principal.
A one-year CD is a great place to keep your money if you won’t need it during the year. Consider other CD lengths for longer-term money.
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 miss out on a good deal by locking up your money for longer. Of course, rates could also decrease significantly — like when the pandemic first hit.
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.
Another more liquid option than a CD is parking your cash in a money market account. At some banks, the money market account requires a higher minimum deposit. A money market account may also pay more interest than the institution’s savings account.
Compared to money market account rates, however, one-year CD rates tend to be higher at competitive online banks. In many cases, you can qualify for one of the top one-year CD deals without having to fork over a large amount of cash. Meanwhile, 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 able to tie up money for months or years at a time.
With a money market account, 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 like savings accounts, money market accounts may be limited to a maximum of six transfers or withdrawals per month or per statement cycle. Even though in April 2020 there was an interim final rule to amend Regulation D and delete the limit on certain withdrawals, most savings and money market accounts still have these limits. You might be charged a fee for exceeding these limits at some banks.
These days some banks are allowing more transactions per statement cycle on savings deposit accounts, including money markets. Union Bank, for instance, currently doesn’t have limits on the number of checks you can write from its money market account.
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).
These financial institutions are featured in our CD rate research: Barclays, Bask Bank, BECU (Boeing Employees Credit Union), Bethpage Federal Credit Union, BMO Harris Bank, Bread Financial (formerly Comenity Direct), BrioDirect, Capital One Bank, Chase Bank, CIBC USA, CIT Bank, Citibank, Citizens, Citizens Bank (Rhode Island), Credit One Bank, Comerica Bank, Customers Bank, Delta Community Credit Union, Discover Bank, Emigrant Direct, Fifth Third Bank, First Citizens Bank, First Internet Bank, First Technology Federal Credit Union, FNBO Direct, Golden 1 Credit Union, Huntington National Bank, Investors Bank, Investors eAccess, KeyBank, Limelight Bank, Live Oak Bank, M&T Bank, Marcus by Goldman Sachs, Morgan Stanley Private Bank, MySavingsDirect, Navy Federal Credit Union, NBKC Bank, PenFed Credit Union, PNC Bank, Popular Direct, PurePoint Financial, Quontic Bank, Randolph-Brooks Federal Credit Union, Regions Bank, Salem Five Direct, Sallie Mae Bank, Santander Bank, SchoolsFirst Federal Credit Union, Security Service Federal Credit Union, State Employees' Credit Union, Suncoast Credit Union, Synchrony Bank, TD Bank, TIAA Bank, Truist Bank, U.S. Bank, UFB Direct, Union Bank (California), USAA Bank, Vio Bank, VyStar Credit Union, Wells Fargo and Zions Bank.
Note: Bankrate doesn’t include callable CDs or brokered CDs on this page and compares regular CDs and no-penalty CDs separately.