Best 1-Year CD Rates for December 2024 [Up to 4.55%!]

Benzinga found that the best 1-year CD rate right now is 4.55% APY from Newtek Bank. Maximize your earnings by opening a 1-year CD account today!

When investing in a Certificate of Deposit (CD), it is crucial to weigh the benefits of both longer and shorter-term options based on your financial objectives. While longer-term CDs typically offer higher annual percentage yields (APYs), shorter-term CDs can still be appealing, especially for first-time savers or those looking for quicker access to their funds. As you shop around, comparing offers from different banks becomes essential to find the best CD that meets your needs.

Currently, the best 1-year CDs present competitive rates and the flexibility that many savers desire without the constraint of committing to a lengthy investment. The recent decision by the Federal Reserve to cut the federal funds rate by 50 basis points may affect interest rates, with banks needing time to adjust. Investing in a Certificate of Deposit at the current rate can provide guaranteed returns during economic uncertainty.

Benzinga reviewed the top-rated banks and financial institutions to find the best 1 year CD rates for the month of December 2024. Lock in a great CD rate now and start earning more on your savings!

Quick Look at the Best 1-Year CD Rates Today:

• Best for High Yield CD: Newtek Bank — 4.55% APY
• Best for Credit Union Membership: America First Credit Union — 4.45% APY
• Best for Jumbo CDs: NexBank — 4.42% APY
• Best for Account Access: Merrick Bank — 4.35% APY
• Best for Simplicity: Live Oak Bank — 4.30% APY
• Best for Low Deposits: Bread Savings — 4.30% APY
• Best for Digital Credit Union Services: Alliant Credit Union — 4.10% APY
• Best for Variety of Terms: Pentagon Federal Credit Union — 3.65% APY

Best 1-Year CD Rates

Here are Benzinga's top picks for the best 1-year CD rates based on our research.

1. Best for High Yield CD: Newtek Bank

Newtek Bank is known for its customer service, providing account holders with easy access to their funds and online management tools. A 1-year Certificate of Deposit account with Newtek Bank lets your savings grow with an annual percentage yield of 4.55%, one of the highest APY in the market. The minimum opening deposit required is $2,500 and the maximum amount is $250,000 per account. As a member of the Federal Deposit Insurance Corporation (FDIC), your funds are secured and protected up to the allowable limit. Newtek Bank also offers other CDs with terms ranging from 6 months to 5 years, all with competitive interest rates.

• Annual Percentage Yield: 4.55%
• Minimum deposit: $2,500

Why We Picked It: The combination of security and higher than average returns makes Newtek Bank's one-year CD an attractive option for both short-term savings goals and preservation of capital.

2. Best for Credit Union Membership: America First Credit Union

The America First Credit Union's 1-year Certificate Accounts present an attractive investment option, combining a competitive annual percentage yield of 4.45% with a low minimum deposit of just $500. This appealing mix of high returns and accessible entry points makes it an ideal choice for those looking to grow their savings without a substantial upfront commitment, especially if they are willing to join a credit union.

Additionally, with over 120 branches across Arizona, Idaho, Nevada, Utah, and New Mexico, customers can enjoy the convenience of in-person banking, enhancing the overall experience. Beyond these Certificate Accounts, America First Credit Union also provides a variety of financial products, including loans and IRA investing, making it a well-rounded institution for managing your finances.

• Annual Percentage Yield: 4.45%
• Minimum deposit: $500

Why We Picked It: America First Credit Union stands out as a leading choice for credit union membership and CD investments, thanks to its competitive rates, flexible terms, low fees, and valuable member benefits.

3. Best for Jumbo CDs: NexBank

NexBank is a leading financial institution that offers some of the best rates on Certificate of Deposit (CD) accounts in the market. With a CD account from NexBank, you can lock in a fixed interest rate for a set period of time, from 3 months to 5 years. Their 1-year CDs have one of the best CD interest rates for 12 months. NexBank is currently offering promotional online CDs that let you earn an annual percentage yield (APY) of 4.42% for CDS with opening balances of $25,000 to $240,000.00. This is higher than their standard 1-year CDs which have an APY of 4.37% with a minimum deposit of $10,000. NexBank's online platform makes it easy to manage your Certificate of Deposit account from anywhere, at any time. They also have branches in Dallas if you prefer an in-person visit.

• Annual Percentage Yield: 4.42%
• Minimum deposit: $25,000

Why We Picked It: If you are looking for the best option for a 1-year CD account with high annual percentage yield, NexBank is definitely worth considering. With their competitive rates, flexible options and convenient online platform, NexBank makes it easy to grow your savings and achieve your financial goals.

4. Best for Account Access: Merrick Bank

Merrick Bank offers a wide variety of CD terms – from three months to 60 months, all with competitive APYs. You will have access to your account online at any time, but you can also reach a customer service representative during normal business hours Monday through Friday. You can earn an annual percentage yield of 4.35% if you can open 12 month high yield CD account with Merrick Bank. While the minimum balance is higher than some at $25,000, the interest rates that this bank offers can make it worthwhile. Aside from Certificate of Deposit, you also have access to other bank products including credit cards and personal loans.

• Annual Percentage Yield: 4.35%
• Minimum deposit: $25,000

Why We Picked It: We love Merrick Bank because of its competitive APY and flexible CD terms. Also, you can easily track your investment and view your earnings through their user-friendly online portal, making it simple to stay on top of your finances.

5. Best for Simplicity: Live Oak Bank

If you’re looking for an online bank that offers simplistic features at competitive APYs, Live Oak Bank could be it. You can open one of the best savings accounts with no minimum balance or a personal Certificate of Deposit account with a minimum of $2,500 and a maximum of $250,000 per account. The Live Oak mobile app allows you to manage your entire accounts on your device. However, if you want more products than a savings account and a CD, this bank might not be for you. Additionally, since it has no brick and mortar branches or ATMs, you have to be comfortable conducting all of your transactions through online banking or mobile banking.

• Annual Percentage Yield: 4.30%
• Minimum deposit: $2,500

Why We Picked It: Live Oak Bank offers a convenient online platform, where you can easily manage your CD account from anywhere at any time. From opening a 1-year Certificate of Deposit account or other account types to monitoring your account activity, you can access all of your banking needs with just a few clicks.

6. Best for Low Deposits: Bread Savings (formally Comenity Direct)

Bread Savings is an online platform that offers higher-than-average CD rates. With its low-entry deposit, it opens up CD saving to more people. You can use a CD like this as part of a CD ladder, which combines both short- and long-term savings with more frequent access to a portion of your money. In a CD ladder, you divide the amount of money you'd like to save into CDs with different maturity dates.

Bread Savings loyal customers can also enjoy a higher renewal rate on their 1-year CD at 4.35%. The Certificate of Deposit account automatically renews for another term without you having to take any action. The only drawback to this bank is that it does not have local branches or ATMs – all of your transactions must be made through online banking.

• Annual Percentage Yield: 4.30%
• Minimum deposit: $1,500

Why We Picked It: Bread Savings offers one of the highest APY on a 1-year CD. Plus, their auto-renew feature can be beneficial for those who want to continue earning interest on their savings without having to constantly monitor their CD and reinvest the funds manually.

7. Best for Digital Credit Union Services: Alliant Credit Union

Alliant Credit Union is a member-owned financial cooperative that offers a wide range of banking products and services, including CDs with competitive rates. With options for terms ranging from 3 to 60 months, Alliant Credit Union provides flexibility to investors based on their financial goals and timelines. Opening a 1-year CD account with Alliant Credit Union requires a minimum opening deposit of $1,000 and lets you earn 4.10% APY. Funds are insured up to $250,000 by the National Credit Union Administration (NCUA).

Alliant also offers a mobile app that allows members to access their accounts, transfer funds, and monitor their CD investments on the go. The app is user-friendly and secure, giving you peace of mind knowing that your financial information is protected.

• Annual Percentage Yield: 4.10%
• Minimum deposit: $1,000

Why We Picked It: With their convenient online platform, mobile app, excellent customer service, and competitive CD options, Alliant makes it easy to grow your savings securely and efficiently.

8. Best for Variety of Terms: Pentagon Federal Credit Union

If you have $1,000 to save, you can open a Money Market Certificate with the Pentagon Federal Credit Union. Some credit unions use the term Certificate in contrast to banks, which call the account a Certificate of Deposit. At only $1,000, the PenFed offering opens the CD/Certificate market to just about anyone. You will have to balance the benefits with the high penalty rate and lower APY rate. But if you know your money will stay put for a year, this option might be a good choice for you.

• Annual Percentage Yield: 3.65%
• Minimum deposit: $1,000

Why We Picked It: Pentagon Federal Credit Union offers a wide range of CD terms, from six months to seven years. This means that whether you're looking for a short-term investment to save up for a big purchase or a long-term investment to secure your financial future, PenFed has a CD term that can meet your needs.

What Is a 1-year CD?

A 1-year CD, or certificate of deposit, is a type of savings account offered by banks and credit unions with a fixed interest rate and maturity date of 12 months or one year. This means that you agree to keep your money deposited in the account for the full year in exchange for a higher interest rate than a regular savings account but still have the security of a fixed rate of return.

How Do 12-month CDs Work?

When you open a 1-year CD, you agree to deposit a set amount of money into the account and leave it there for a specified period of time, typically 12 months. In return, the bank or credit union will pay you a fixed interest rate on your deposit.

The interest rate on a 1-year CD is usually higher than what you would earn with a regular savings account because you are agreeing to keep your money with the bank for a longer period of time. The longer the term of the CD, the higher the interest rate typically is.

At the end of the one-year term, you have the option to withdraw your initial deposit plus any interest earned, or you can choose to roll the money over into a new CD with a new term length and interest rate.

One important thing to note about 1-year CDs is that there is usually a penalty for withdrawing your money before the term is up. This penalty can vary depending on the financial institution, but it is typically a certain number of months' worth of interest or a percentage of the total amount you have invested.

How to Find the Best 1-year CD for You

When trying to find the best 12 month CD to buy, you should look for the following features to ensure that your money is working for you in the best way possible.

• Minimum deposit: Look for a CD with a low minimum deposit if you have limited savings and are new to this type of savings account. This will allow you to start small and learn how CDs work.
• APY rates: High APY means you can earn more money over time.
• Fees: Banks and credit unions charge fees for CDs. This includes fees for early withdrawals or other small fees that can impact your balance significantly. It's important to research and compare fee structures before choosing an institution.
• Customer support: When choosing a bank or financial institution to open a Certificate of Deposit, whether online-only or brick-and-mortar, good customer service is crucial. This is important because placing your money with a bank for a year can be beneficial, but if you have difficulty reaching them, it can lead to a negative customer experience.

Pros and Cons of 1-year CDs

Here are some pros and cons of investing in a Certificate of Deposit for one year.

How to Open a 1-year CD Account

Opening a Certificate of Deposit account is easy and fast in most instances. Follow these steps:

1. Find a bank or credit union: Compare 1-year CD rates and terms from various providers to find the best one that suits your situation. Be sure to do business with a bank that is insured by the Federal Deposit Insurance Corporation (FDIC) or a credit union that is by National Credit Union Administration (NCUA.)
2. Decide how you want to be paid: Decide how and when you will collect your interest. You can have it applied to your CD balance, transfer it to a savings account or ask that it is directly delivered to you via check, bank wire or other means.
3. Open a CD account: If you don’t already have an account with the issuing bank or credit union, you will have to open one. It will ask for personal information such as your name, address and social security number.
4. Deposit funds into your CD account: Depending on the bank or credit union you have chosen, you can do this by sending a wire, transacting an ACH deposit, mailing a check or providing cash to a local branch.
5. Review and sign the CD agreement: Read the agreement carefully and double-check important details such as annual percentage yield (APY), minimum deposit requirement and fees before signing.

When Is the Best Time to Open a 1-Year CD?

The best time to open a 1-year Certificate of Deposit account is when interest rates are on the rise or when you notice that the rates offered by various banks are at a peak compared to recent trends. It’s ideal to open a CD during an upward interest rate environment, as this can maximize your returns over the short term. Additionally, timing your investment to coincide with specific promotional offers from financial institutions can also yield higher interest rates. Monitoring economic indicators and central bank policies can provide insights into when rates are likely to increase. This allows you to lock in the best CD rate for one year while minimizing the risk of losing out on better returns down the road.

1-Year CD Alternatives

Consider these alternatives to 1-year CDs:

• 1-year CDs vs. other CD terms: While a longer CD terms, such as 18-month, 2-year, 3-year or 5-year CDs, can get you a higher rate, shorter-term CDs may be a better option. This is because CD rates can change significantly in a year. Locking up your money for longer could cause you to miss out on a good deal or be affected by rate decreases.
• 1-year CDs vs. high-yield savings accounts: High-yield savings accounts offer higher interest rates than traditional savings accounts. This makes them a good option for earning more on your savings with easy access to your funds and possibly no minimum balance requirements.
• 1-year CDs vs. money market accounts: Money market accounts provide more flexibility with access to funds at any time. CDs offer higher interest rates but lock in your funds until maturity.

Earn More on Your Savings with a 1-Year CD

Investing in CDs can be a great way to grow your savings with minimal risk. However, it's important to note that CD rates can change frequently. It is best to regularly check for the most up-to-date information. With the right research and comparison, you can find the best 1-year CD rate that meets your financial goals.

Frequently Asked Questions