The yields tied to 1-year CD rates have gradually moved up in the past six months. A 12-month CD pays on average about 0.79 percent APY, based on Bankrate’s weekly survey. In early April, the average yield was 0.51 percent APY.

While those yields are nothing to brag about, fortunately, you can find institutions offering rates that are much higher than average. One place to consider if you’re looking for high-yield CDs is a credit union.

Why consider a credit union?

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.

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.

Here are five credit unions that offer the best nationally available 1-year CD rates today. They each pay more than three times the national average.

Best 1-year credit union CD rates


USALLIANCE Financial

USALLIANCE Financial is based in Rye, New York. It has branches in several states, including Connecticut and Massachusetts, and more than 110,000 members around the world. It earned four out of five stars in Bankrate’s latest review of its financial health.

  • What is pays: 2.75 percent APY
  • Membership restrictions: Membership is open to anyone willing to join an association or group such as the American Consumer Council, Arc of Westchester or Tread Lightly, a nonprofit that provides outdoor ethics training. You can also join if you’re associated with Manhattanville College or Columbia University, you’re a family or household member of a current member, you’re an employee of more than 150 companies or you live, work or worship within a certain area. Retirees or employees of the state or local government in certain New York counties are also eligible for membership.
  • Minimum deposit: $500
  • Early withdrawal penalty: 180 days’ dividends on the amount withdrawn.

Alliant Credit Union

Alliant Credit Union was originally founded in 1935 as the United Airlines Employees’ Credit Union. The credit union is headquartered in Chicago with branch locations around the country. It earned four out of five stars in the latest review of its financial health.

  • What it pays: 2.65 percent APY
  • Membership restrictions: Membership is open to anyone who supports Alliant Credit Union’s partner charity, Foster Care to Success. Employees or retirees of qualifying companies, members of select organizations, immediate relatives of existing members and those who live or work in certain local communities can qualify for membership.
  • Minimum deposit: $1,000
  • Early withdrawal penalty: Dividends earned for the number of days the certificate is open, up to a maximum of 90 days.

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. It earned five out of five stars in Bankrate’s latest review of its financial health.

  • What it pays: 2.65 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 of 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: $2,000
  • Early withdrawal penalty: The penalty is equal to the amount of the withdrawal times the remaining days in the term at the rate of two times the current APR (divided by 365) paid on the certificate. The penalty amount will be deducted from the amount withdrawn.

Quorum Federal Credit Union

Following a merger between General Foods Federal and the Kraft Employees Credit Union, the Quorum brand was born. The credit union is based in Purchase, New York and has more than 70,000 members. Note that while it earned just one star in Bankrate’s latest review of its financial health, it’s a member of the National Credit Union Administration. That means deposits are insured up to $250,000 (per account holder for each qualified account type).

  • What it pays: 2.6 percent APY
  • Membership restrictions: Membership is open to anyone. Membership is established by opening a basic savings account and depositing at least $5.
  • Minimum deposit: $1,000
  • Early withdrawal penalty: You could lose up to 180 days’ dividends.

Pentagon Federal Credit Union

Founded in 1935, Pentagon Federal Credit Union is based in Virginia. It serves more than 1.6 million members in all 50 states and Washington, D.C., Guam, Puerto Rico and Okinawa, Japan. It has dozens of branches scattered throughout the country in places like California, Florida, Georgia, Hawaii and Nebraska. The credit union earned four out of five stars in Bankrate’s latest review of its financial health.

  • What it pays: 2.6 percent APY
  • Membership restrictions: Active and retired members of the U.S. military and employees of the U.S. government are eligible to join. Employees and members of affiliated organizations and associations and relatives and housemates of members also qualify for membership. If you can’t join through one of those avenues, you can become a member by joining a group, like the Voices for America’s Troops.
  • Minimum deposit: $1,000
  • Early withdrawal penalty: If redeemed within the first year, all dividends will be forfeited. Dividends can be transferred or withdrawn penalty-free by selecting the “Periodic Dividend Payment Option.” Otherwise, the penalty applies.

Recap: Best 1-year credit union CD rates

Institution APY Minimum deposit
USALLIANCE Financial 2.75% $500
Alliant Credit Union 2.65% $1,000
CommunityWide Federal Credit Union 2.65% $2,000
Quorum Federal Credit Union 2.60% $1,000
Pentagon Federal Credit Union 2.60% $1,000