Best 1 Year CD Rates for April 2024

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Save for next year with a 1-year CD. Here are some of the best 1-year CD rates today.

Who has the highest 1-year CD Rates?
Here are some banks and credit unions with the best 1-year CD rates:

Want to grow your savings or hold off on spending for next year?

A 1-year CD can be a good way to curb spending and earn fixed interest at the same time. It is a low-risk investment that lets you lock in high rates for a year.

Check out who pays the highest 12-month CD rates, and what alternatives you can consider.

What is a 1-Year CD?

A 1-year CD (also known as a 12-month CD) is a savings account where you deposit a fixed amount of money for one year in exchange for a fixed APY. That means the rate applies until the term ends. And typically, you get a higher APY compared to a simple savings account.

1-year CDs are one of the most popular CD terms available in the market so you have plenty of options if you're looking for one.

What is the interest on a 1-year CD?
One of the highest rates on a 1-year CD is Western Alliance Bank: 12-Month High-Yield CD - 5.05% APY.

How Do 1-Year CDs Work?

You usually can't withdraw your money until the 1-year CD matures. It's like a contract to lock in your money for one year. This is why banks can give higher rates on CDs than regular savings accounts where you have convenient access to your money.

If you withdraw early, you might face penalties that can go up to 90 days' worth of interest.

Who is a 1-Year CDs Best For?

A 1-year CD is good for anyone who can lock in their money for at least a year. If you worry about interest rate changes, a CD can give you some peace of mind since your rate is fixed.

If you're someone who will need easy access to your money, consider other options like a high-yield savings account instead.

Are 1-year CD rates rising?
Typically, 1-year CD rates will increase if the Federal Funds rate recently went up. But, there is no guarantee that CD rates will go up or down. Following the movement of the Fed Funds rate is a good way to estimate it.

How much interest does a 1-year CD earn?

If you had $10,000 in a 1-year CD with an APY of 5% then you'd get $500. How much you earn on a 1-year CD depends a lot on what your APY is and the amount in your CD.

Here's a table to illustrate how the APY and amount impact what you earn on a 1-year CD.


Here's a simple CD calculator you can use to check how much you can earn on a CD.

CD Calculator

Where do you typically search for the best 1-year CD rates?

Is a 1-Year CD Worth It?

A 1-year CD's worth will depend on your financial goals. If you won't need the money soon, a CD provides passive income and access when you need it.

However, if you're building an emergency fund, a 1-year CD may not be ideal due to restricted access and potential early withdrawal penalties.

In general, CDs are most beneficial when interest rates are high and you're comfortable with locking away your funds.

Where to find the best 1-Year CD Rates
High 1-year CD rates are usually offered by online banks and credit unions. Online banks can give great rates because of their lower overhead costs. Credit unions can offer the same as they are non-profit institutions.

Can I Lose Money on a 1-Year CD?

In most cases, you won't lose money on a 1-year CD. CDs are federally insured for up to $250,000 for banks or credit unions that are FDIC or NCUA members. That means your deposits are covered in case your bank or credit union fails.

That's not to say you can't lose some of your potential earnings. You may lose money on a CD from early withdrawal fees if you withdraw before maturity.

Are CDs safe?
Yes. Because CDs are typically federally insured, they are one of the safest investments available.

Pros and Cons of a 1-Year CD


  • Lock in high interest rates.
    You get high, fixed interest rates during the 1-year CD term. This means your rate stays the same regardless of the market changes throughout the year.

  • Low-risk.
    A 1-year CD is a safe, low-risk investment. Funds deposited in your CD are federally insured and returns are guaranteed.


  • Early withdrawal penalties.
    Remember with 1-year CDs, your money is locked in for 12 months. You usually can't move your funds without paying early withdrawal penalties.

  • Miss out on better rates.
    Interest rates can go up in one year. If you're already locked in a 1-year CD with a lower APY, you can miss out on higher earnings.

    Can I withdraw money from my 1-year CD?
    Like most CDs, you cannot withdraw from your 1-year CD without paying penalties. But if you'll need to withdraw early, consider no-penalty CDs to avoid early withdrawal fees.

How to Choose the Best 1-Year CD

If you're on the hunt for a 1-year CD, here are three questions to filter your choices:

  1. What is the APY?
    The good news is some of the best CD rates are offered on 1-year CDs. You'd want the highest APY to maximize your earnings on a CD. Search for the best options available to you before you commit.

  2. What is the minimum deposit required?
    Some CDs have minimum deposit requirements. If you don't want to lock up a large amount of money for a year, make sure you choose a CD with little to no deposit requirements.

  3. How much is the early withdrawal penalty?
    Penalties for 1-year CDs can range from 60 to 90 days worth of interest. If you might need to close your CD early, look for CDs with lower penalties. Better yet, find no-penalty CDs to avoid paying any fees.

What is most important to you when considering a 1-year CD?

How to Open a 1-Year CD

If you have your information and money ready, opening a 1-year CD can be quick and easy. Some CDs can be opened online too. Here's how to open a 1-year CD:

  1. Confirm where to open the CD.
    Try to read the CD's disclosures about where you should open it. Some CDs might be limited to online platforms only or physical branches only, for example.

  2. Complete the form and review the terms.
    Fill out the application form by providing the necessary information. Make sure to review the terms and conditions to cover details like interest payments, maturity date, and early withdrawal penalties.

  3. Submit and fund your CD.
    Once submitted, you can fund your CD through various methods, such as online transfers, wires, or check deposits.

If you're not sure how to open a CD with a specific bank or credit union, it is best to reach out to a representative to guide you.

What Happens at the End of a 1-year CD?

Your bank or credit union usually will notify you if your 1-year CD is about to mature. Before it does, decide if you want to:

  • Automatically renew the CD.
  • Renew the CD with a different amount, term, or both.
  • Withdraw all your funds and close the CD.

Make sure to inform your bank before or during the grace period after your CD matures. Otherwise, the CD might renew and early withdrawal penalties will already apply.

What if I need to withdraw my CD early?
Most CDs will have early withdrawal penalties, so if you need to close your CD before it matures, be prepared to pay the penalties.

Alternatives to 1-year CDs

A 1-year CD might not be the best option for you, here are alternatives you can consider:

High-Yield Savings Account
Try getting a high-yield savings account if access to your funds is important. You get the flexibility to add and withdraw funds at any time. These are good for short-term goals, emergencies, or simply savings. But rates may change over time, unlike CDs.

Compare Savings Account Offers

Money Market Accounts
A money market account, similar to a savings account, allows you easy access to your money. Some even come with a debit card, ATM access, and check-writing abilities. However, the rate may also be lower and can change during the year.

Compare Money Market Account Offers

Treasury Securities
To lock in rates for a year like 1-year CDs, check out Treasury bills, notes, and bonds. These are backed in full faith by the government. These make them a safe and reliable investment for a year.

Longer-term CDs
If you can go beyond 1 year, some longer-term CDs offer competitive rates and minimal to no deposit requirements. You can look for no-penalty CDs with longer terms to get flexibility and avoid early withdrawal fees.

Long-Term CD Rates:

Shorter-term CDs
On the flip side, if one year is too long, you can go for short-term CDs. Some shorter terms might even have higher rates than 1-year CDs.

Short-Term CD Rates:

When is the best time to get a 1-year CD?
The rule of thumb is to get a CD when interest rates are at their highest. CD rates typically move with the Fed Funds rate. Thus, following their trend can help you decide when to get a 1-year CD.

1-year CD FAQs

Is a 1-year CD better than a savings account?
If you need easy access to your money, choose a savings account. If not, consider a 1-year CD to lock in potentially higher rates. Both are FDIC-insured, as long as your bank or credit union is an FDIC or NCUA member.

How do I use a 1-year CD in a CD Ladder?
CD laddering is a strategy where you break up your money into multiple CDs. This way you have CDs mature intervals and get the flexibility to use or reinvest your money.

To visualize how a 1-year CD can be used in this strategy, here's a CD ladder calculator.

What CD term should I choose?
The CD term you choose will highly depend on your financial goals. CD terms range from 1 month to 10 years, so you have many options to match your goals.

What the Experts Say

CreditDonkey asked a panel of industry experts to answer readers' most pressing questions. Here's what they said:

Bottom Line

For a guaranteed passive income in the next year, a 1-year CD could be a good option. However, whether or not you should open one depends on your financial goals and situation.

Early withdrawal penalties might still be a problem, so make sure you can commit to the 1-year term before you choose this CD.

Write to Rue Atanacio at Follow us on Twitter and Facebook for our latest posts.

Note: This website is made possible through financial relationships with some of the products and services mentioned on this site. We may receive compensation if you shop through links in our content. You do not have to use our links, but you help support CreditDonkey if you do.

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Editorial Note: Any opinions, analyses, reviews or recommendations expressed on this page are those of the author's alone, and have not been reviewed, approved or otherwise endorsed by any card issuer.

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