CD rates are falling. In early September, the average 1-year CD rate was 0.86 percent APY. According to Bankrate’s weekly survey, today, the average yield is 0.74 percent APY.

While yields aren’t nearly as high as they were a year ago, it’s still possible to end up with a competitive interest rate. One way to do that is to shop around and look at the yields tied to the share certificates offered by credit unions.

Pros and cons of credit union CDs

Brick-and-mortar banks can be pretty stingy when it comes to paying out interest to their customers with savings accounts. In many cases, their CD rates aren’t impressive either.

Credit unions are member-owned institutions. That means they’re always looking out for their customers. It’s not hard to find a credit union offering competitive rates tied to CDs (or as credit unions often call them, share certificates).

“The great thing about credit unions is that we’re not-for-profit, meaning we have the ability to return the money we bring in back to our members in the form of higher rates on our products,” says Brett Wheeler, senior vice president and chief financial officer at USALLIANCE Financial.

The drawback? You may not have access to a credit union share certificate if you cannot qualify for membership. While there are many credit unions that are easy to join, there are still institutions that have restrictions based on where you live or work, or the group you’re affiliated with.

[READ: 6 misconceptions about credit unions]

Even if you can become a credit union member and apply for a share certificate, you may forget about this account if you have multiple accounts at different banks or you have no other ties to the credit union. If you’re not careful, your CD could automatically renew, forcing you to keep money locked up for a longer period of time than anticipated. That could cause problems if you need money you’ve saved to cover an emergency or make an important purchase.

Here are five credit unions offering today’s best nationally available 1-year CD rates. They each pay nearly three times the national average.

Best 1-year credit union CD rates — December 2019


America’s Credit Union

Originally named Fort Lewis Federal Credit Union, America’s Credit Union was founded in 1954 by a few civilian employees of the U.S. government. Today the credit union is headquartered in DuPont, Washington, and has 15 new branch locations in Pierce and Thurston counties.

  • What it pays: 2.38 percent APY
  • Membership restrictions: Membership is open to anyone who lives in the Pacific Northwest, including members of the Armed Forces and their family members, civilian personnel, veterans and military retirees. Anyone who becomes a member of the Pacific Northwest Consumer Council may also join.
  • Minimum deposit: $25,000 to earn listed APY
  • Early withdrawal penalty: You could lose up to 90 days’ dividends on the amount withdrawn or all dividends on the amount withdrawn since the date of issuance or renewal, whichever is less.

CommunityWide Federal Credit Union

CommunityWide Federal Credit Union is based in South Bend, Indiana. With 11 office locations in Northern Indiana, the credit union serves thousands of members nationwide.

  • What it pays: 2.25 percent APY
  • Membership restrictions: Membership is open to anyone who makes a $5 donation to Michiana Goodwill Boosters or the Marine Corps League of St. Joseph Valley. You can also join if you’re an immediate relative in the same household as a qualified member or you’re an employee, retiree or donor member of any of the organizations associated with the credit union.
  • Minimum deposit: $1,000
  • Early withdrawal penalty: Equal to the amount of the withdrawal times the remaining days in the term of the certificate at the rate of two times the current APR (divided by 365) paid on the certificate.

USALLIANCE Financial

USALLIANCE Financial is a credit union based in Rye, New York. Originally, it was established for employees of IBM. Total membership is over 100,000, worldwide.

  • What it pays: 2.20 percent APY
  • Membership restrictions: Membership is open to anyone who joins an organization or association like the American Consumer Council or the Rye Arts Center.
  • Minimum deposit: $500
  • Early withdrawal penalty: 180 days dividends on the amount withdrawn.

State Department Federal Credit Union

Based in Alexandria, Virginia, State Department Federal Credit Union was founded in 1935 and was originally named U.S. Department of State Employees Federal Credit Union. Today, it serves more than 84,000 members worldwide.

  • What it pays: 2.12 percent APY
  • Membership restrictions: Membership is open to employees of the U.S. Department of State and their immediate family members, as well as employees for about 100 affiliated organizations. Membership is also open to anyone who joins the American Consumer Council at the time of application.
  • Minimum deposit: $500
  • Early withdrawal penalty: You could lose up to 180 days’ dividends.

First Technology Federal Credit Union

First Technology Federal Credit Union was founded in 1952 by employees of Hewlett-Packard and Tektronix. The credit union is highly innovative and has established relationships with companies like Microsoft and Google.

  • What it pays: 2.10 percent APY
  • Membership restrictions: Membership is open to employees of certain companies and locals who work and live in Lane County, Oregon. You can also qualify for membership by joining the Computer History Museum or the Financial Fitness Association.
  • Minimum deposit: $500
  • Early withdrawal penalty: 180 days of dividends. Since the penalty could apply if no interest has accrued, the early withdrawal penalty may be reduced.

Read the fine print

Before signing up for any bank account, it’s important to understand the terms and conditions. With share certificates — and CDs across the board — there’s typically a penalty for early withdrawal. By pulling money out of your share certificate (or CD) before it matures, you’ll likely forfeit some of the interest you’ve earned. Consequences for early withdrawals vary from one credit union to the next and sometimes vary within a single credit union for share certificates with different term lengths.

As long as the credit union you’ve chosen is federally insured by the National Credit Union Administration, the money you’ve deposited in your share certificate will be safe. In the event that the credit union shuts down, you’ll still walk away with your savings. Just keep in mind that there’s a $250,000 threshold for single ownership accounts. Larger amounts won’t be automatically insured.

Recap: Best 1-year credit union CD rates

Institution APY Minimum deposit
America’s Credit Union 2.38% $25,000
CommunityWide Federal Credit Union 2.25% $1,000
USALLIANCE Financial 2.20% $500
State Department Federal Credit Union 2.12% $500
First Technology Federal Credit Union 2.10% $500

Learn more about other CD terms: