Best 1-Year CD Rates for November 2024 (original) (raw)

According to our CD survey, one-year CDs are the most popular savings term — 27% of our 1,000 respondents opened a one-year CD within the last three years. Overall, respondents invested an average of $48,083 in a CD. Regardless of how much you have to save, the experts we interviewed said now is the time to lock in high yields on one-year CDs since rates are expected to fall later in the year.

One-year CDs are safe investments for funds you’ll need in the medium term. They allow you to lock your interest rate in for a full year even if rates in the market drop during that time.

The best 1-year CD rate today is 5.25% from First Merchants Bank, while the average rate is 2.42%. Rates vary based on what’s happening in the economy, including inflation and the Federal Reserve’s changes to the federal funds rate.

Best 1-Year CD Rates:

Synchrony Bank — 4.20% APY, no minimum deposit
Ally Bank — 4.10% APY, no minimum deposit
Marcus by Goldman Sachs — 4.20% APY, $500 minimum deposit
Quontic Bank — 4.00% APY, $500 minimum deposit
BMO Alto — 4.30% APY, no minimum deposit

Featured CDs

Best 1-Year CD Rates for November 2024

To bring you the best CD rates from across the country, we compiled data from the research firm Curinos, which analyzes information from over 3,600 banks each day. We’ve also thoroughly researched more than 100 banks, credit unions and fintech companies to find those with the best ratings, highest APYs and lowest minimum deposit requirements for CDs. Learn more about our rating methodology.

Whether you’re looking for the top one-year CD rates in the U.S. or a great deal with a top bank, we’ve got you covered. Our picks below for the best one-year CD rates have APYs well above the national average.

Rates accurate as of November 15, 2024

Best 1-Year CD Rates Compared

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Is Now the Right Time To Open a 1-Year CD?

Our recent MarketWatch Guides team CD survey shows that a one-year CD is the most common term length used by consumers. Its short-term commitment coupled with recent high interest rates make it an attractive low-risk investment option – 55% of survey respondents with a one-year CD reported earning an APY above 4%.

While CD rates have dropped slightly in 2024, they’re still at some of their highest levels in more than 15 years. Our experts predict rates will fall later in the year. However, the Federal Reserve announced Wednesday that no changes are in the immediate future.

“Short-term and longer-term CD rates should see little to no change. … If you feel rates are going to be heading lower in the near to mid-term it may make sense to lock in for today’s rates for longer. With the Fed decision [Wednesday], you have a little while to make this assessment for your situation.”

Lawrence Sprung Author of “Financial Planning Made Personal” and Founder of Mitlin Financial

Below is a glance at average CD rates trends over the past decade.

“For those considering CDs as an investment, the window to secure a good rate might be narrowing,” said Taylor Kovar, CFP, CEO and founder of 11 Financial. "Securing a CD sooner rather than later could lock in higher returns before rates drop.”

“If you’ve been eyeing CDs as an investment, you still have some wiggle room to snag decent rates, but don’t dilly-dally too long. Since CD rates are expected to keep slipping in 2024, it’s wise to lock in a rate sooner rather than later to avoid losing out on better deals.”

What Is a 1-Year CD?

With a one-year CD, you usually make a single opening deposit that you’ll keep in the account until the maturity date. In exchange, the bank guarantees a certain fixed interest rate for the term.

"In an environment where interest rates are dropping, a long-term CD will offer the benefit of continuing to pay the higher interest rate that you are locked into," said Renee Stene, financial advisor and founder at Weddington Advisors.

How Do 1-Year CD Rates Work?

CD rates are influenced by several factors. Rates on financial products including CDs usually move in response to the federal funds rate, which is set by the Federal Reserve. The federal funds rate is an interest rate banks use to lend money to each other overnight.

MarketWatch Guides Tip

The best CD rates can often be found with smaller banks and credit unions. This is typically because smaller banks offer higher rates to attract clients and credit unions are member-focused, not-for-profit institutions that return their profits to members in the form of better interest rates.

CD rates are also highly dependent on inflation and market competition from other banks. When inflation is high, CD rates tend to be higher. When inflation drops, CD rates usually decrease. Online banks that are trying to attract customers often offer much higher APYs than big national and regional banks that already have large customer bases.

Over the past year, one-year CD rates offered by some of the top online banks and credit unions we tracked have remained steadily around 4.5% to 5%.

One-year CDs typically offer higher interest rates than three- and six-month CDs because you’re allowing your money to be tied up for a longer amount of time.

If you’re considering a one-year CD, think about whether the maturity date aligns with your savings goals. In our latest CD survey, the number one reason people took out a CD was to take advantage of high interest rates, and the next was to save for long-term goals.

While over 37% of survey respondents used CDs to save for retirement, the financial experts we spoke to recommend that CDs are better used as a safe investment for short- and medium-term needs like a home, trip or wedding.

CD INFORMATION

How much is your initial deposit?

How long is your CD term?

What is your APY (%)?

What is the compounding frequency?

Compounding frequency refers to how often your interest earns interest upon itself. If you don’t know how often your CD earns interest, keep the frequency set to monthly.

YOUR ENDING BALANCE $1,025

Total Interest Earned

$25

Alternatives to 1-Year CDs

While a CD is a reliable way to earn money on cash investments, there are several alternatives that offer more liquidity.

1-Year CDs vs. High-Yield Savings Accounts (HYSAs)

High-yield savings accounts have similar interest rates as CDs with the added benefit that you can take your money out any time you need it, unlike CDs, which usually charge a penalty for early withdrawal. However, if market rates go down, your HYSA interest rate could also drop. With a CD, your rate is locked in until the CD’s maturity date.

1-Year CDs vs. Money Market Accounts (MMAs)

Money market accounts are hybrids of checking and savings accounts. They generally earn more interest than a regular savings account but less than an HYSA. The benefit is that you often have checks or a debit card for your account, making it easier to use it to pay bills. You might choose an MMA over a CD if you want to earn interest on your money but prefer to be able to spend money from your account.

1-Year CDs vs. Bonds

Bonds often have similar yields to CDs, so they’re a common alternative. CDs are considered a slightly safer investment, but bonds are more liquid than CDs. If you need to access the funds in a bond, you can resell it.

But if interest rates have dropped, you may not get the same rate you opened the bond with, and it may lose value. Bonds repay your interest at fixed intervals and are usually sold in increments of $1,000.

1-Year CD Rates: FAQs

Many of the financial experts we interviewed recommended getting longer-term CDs in early 2024 because the Fed is expected to cut interest rates later this year. If you already have an emergency fund (preferably in a high-yield savings account), a one-year CD could get you a high return on money you don’t need to access within the next 12 months.

A one-year CD could be worth it if you have cash savings and can live without the money in your CD for one year. Rates for one-year CDs are higher than they’ve been in nearly 15 years, and you can lock a guaranteed interest rate in if you open one of these CDs now.

It’s possible but unlikely that you could lose money with a one-year CD. If the account has an early withdrawal penalty and you take your principal out before the CD term ends, you could pay a penalty that eats into your deposit. The penalty is usually based on the interest that could be earned within a certain time period, and if that amount exceeds the interest you’ve earned so far, your bank could take a portion of your deposit.

The national average interest rate for a one-year CD is 2.42%, but the highest available rate on a one-year CD today is 5.25% APY from First Merchants Bank.

There are a few CDs with rates close to 6% APY, primarily offered by credit unions, which often have membership restrictions. However, CD rates have declined from their top rates last summer, and it’s much more common to find rates in the 4.75% to 5% APY range.

Yes, you’ll be required to pay taxes on the interest your CD earns for the year it was earned. Your financial institution will create a 1099-INT form with the total interest you received which you can use when you file your taxes.

Methodology

Our team researched more than 100 of the country’s largest and most prominent financial institutions, collecting information on each provider’s account options, fees, rates, terms and customer experience. We then scored each firm based on the data points and metrics that matter most to potential customers. Read our full methodology.

For our list of the best one-year CD rates, we selected the highest-scoring financial institutions in our review of CDs. These banks and credit unions provide CD products available to customers throughout the U.S. and earn high scores for offering low or no minimum opening deposit and competitive yields on one-year terms.

We opened 10 CD accounts with the necessary minimum deposits. We then measured the speed and thoroughness of the account-opening process, ease of use of the account website, speed of our deposit to fund the account, rewards and features available to account holders and our experience with customer service chat and phone options.

Savings and money market accounts

The best scores go to banks, loans and fintech companies with high interest rates and low or no fees or minimum opening deposits.

High marks are given to those with multiple accounts and minimal fees, plus benefits such as reward programs and mobile check deposit.

Top-rated financial institutions have low or no minimum opening deposits, as well as a variety of term options and specialty CDs for flexibility.

Banking experience and access

Providers that excel in this category have large branch and ATM networks and multiple checking and savings accounts, and they earn more points for offering CDs and money market accounts.

35% Savings and money market accounts

30% Checking accounts

20% Certificates of deposit

15% Banking experience and access

Savings and money market accounts

The best scores go to banks, loans and fintech companies with high interest rates and low or no fees or minimum opening deposits.

Checking accounts

High marks are given to those with multiple accounts and minimal fees, plus benefits such as reward programs and mobile check deposit.

Certificates of deposit

Top-rated financial institutions have low or no minimum opening deposits, as well as a variety of term options and specialty CDs for flexibility.

Banking experience and access

Providers that excel in this category have large branch and ATM networks and multiple checking and savings accounts, and they earn more points for offering CDs and money market accounts.

*Data accurate at time of publication

**Rates accurate as of November 15, 2024

***Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Great Valley Advisor Group, a Registered Investment Advisor. Weddington Advisors and Great Valley Advisor Group are separate entities from LPL Financial.

Certificates of deposit are FDIC insured and offer a fixed rate of return if held to maturity. There is no assurance that the techniques and strategies discussed are suitable for all investors or will yield positive outcomes. The purchase of certain securities may be required to effect some of the strategies. Investing involves risks including possible loss of principal.

Editor’s Note: Parts of this story were auto-populated using data from Curinos, a research firm that collects data from more than 3,600 banks and credit unions. For more details on how we compile daily rate data, check out our methodology here.

All America Bank, Alliant Credit Union, Ally Bank, Amerant Bank, America First Credit Union, American Airlines Credit Union, American Express National Bank, Apple Bank, Arvest Bank, Associated Bank, Axos Bank, Banesco Bank, Bank of America, Bank of Hope, Bank Purely, Bank5 Connect, Barclays, Bask Bank, BECU (Boeing Employees Credit Union), Bethpage Federal Credit Union, BMO, BMO Alto Bank, Bread Savings (formerly Comenity Direct), BrioDirect, Capital One Bank, CFG Bank, Charles Schwab, Charlie Financial, Chase Bank, Chime, CIBC USA, CIT Bank, Citibank, Citizens, Citizens Bank, Colorado Federal Savings Bank, Comerica Bank, Connexus Credit Union, Consumers Credit Union, Credit One Bank, Cross River Bank, Current, Customers Bank, Delta Community Credit Union, Discover Bank, East West Bank, Emigrant Direct, EverBank (formerly TIAA Bank), Federal Savings Bank, Fifth Third Bank, First Citizens Bank, First Internet Bank (of Indiana), First National Bank of America, First Tech Federal Credit Union, FNBO Direct, Frost Bank, Golden 1 Credit Union, Heritage Bank NA, HSBC, Huntington Bank, KeyBank, Lafayette Federal Credit Union, Lake Michigan Credit Union, LendingClub, Limelight Bank, Live Oak Bank, Lonestar Bank, M.Y. Safra Bank, M&T Bank, Marcus by Goldman Sachs, Mercury Bank, Merrick Bank, Michigan State University Federal Credit Union, Milli, Morgan Stanley Private Bank, Mountain America Credit Union, My eBanc, MySavingsDirect, National Bank of Kansas City, Navy Federal Credit Union, NBKC Bank, North American Savings Bank (NASB), Northpointe Bank, Patelco Credit Union, PenFed Credit Union (Pentagon Federal), PNC Bank, Popular Direct, Presidential Bank, Provident Bank, Quontic Bank, Quorum Federal Credit Union, Randolph-Brooks Federal Credit Union, Regions Bank, Ridgewood Savings Bank, Rising Bank, Salem Five Direct, Sallie Mae Bank, Santander Bank, SchoolsFirst Federal Credit Union, Security Service Federal Credit Union, Service Credit Union, SoFi Bank, South State Bank, Spectrum Credit Union, Spring Bank, Star One Credit Union, State Bank of Texas, State Department Federal Credit Union, State Employees’ Credit Union, Suncoast Credit Union, Sutton Bank, Synchrony Bank, Synovus Bank, TD Bank, Texas Capital Bank, Third Federal Savings & Loan, Transportation Alliance Bank (TAB Bank), Truist Bank, U.S. Bank, UFB Direct, Umpqua Bank, Upgrade, USAA Bank, USAlliance Financial, Valley National Bank, Varo Bank, Vio Bank, VyStar Credit Union, Webbank, Webster Bank, Wells Fargo, Western State Bank, Zions Bank, Zynlo Bank

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