December 2024’s Hottest 1-Year CD Rates You Can’t Miss!

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Right now, EagleBank is leading the pack with an impressive 12-month CD rate of 4.60% APY. It’s the perfect time to make your money work harder for you!

We’re on a mission to sift through the offerings of banks and credit unions across the nation, helping you discover the best 1-year CD rates available. Despite the Fed’s recent rate cuts, which have caused some fluctuations, we’re committed to bringing you the most competitive 1-year CD options.

For reference, the average 1-year CD rate in the U.S. currently sits around 1.83% APY, according to the FDIC.

Discover® 1 Year CD

Annual Percentage Yield (APY)

4.00%

Minimum Opening Deposit

$0

Pros

• Flexible terms up to 10 years
• Attractive APY

Cons

• Potentially steep early withdrawal penalties for longer terms
• No option for no-penalty CDs
• Limited number of branch locations

Product Details

• Terms ranging from 3 months to 10 years
• Early withdrawal penalties can vary from 3 to 24 months of interest
• 24/7 customer support based in the U.S.
• No hidden fees!
• Daily compounding interest, paid monthly
• Fully insured by the FDIC

Curious about the best online banks and credit unions? They are currently offering enticing rates of over 4.45% APY on 12-month CDs. Here’s a breakdown of our top recommendations for the best 1-year CDs available today.

Comparing the Most Competitive 1-Year CDs

Top 1-Year CD Rates Right Now

Our dedicated personal finance team has scrutinized over 60 financial institutions to bring you the finest 12-month CD rates. The best deals are predominantly found at online banks and credit unions. Each pick comes with unique benefits, such as low minimum opening deposits, minimal early withdrawal penalties, or even both!

Our top choices for CDs come with FDIC or NCUA insurance: the former for banks and the latter for credit unions. With this insurance, your deposits are safeguarded against bank failures, up to $250,000 for individual accounts and $500,000 for joint accounts.

Some financial institutions even offer extended FDIC insurance, allowing your funds to be distributed across multiple banks, enhancing your coverage beyond the standard limits. This could be ideal if you’re looking to stash away more than $250,000.

To give you a better understanding of these banks, we’ve also included their Better Business Bureau ratings, which gauge their response to customer complaints, transparency, and overall reliability.

EagleBank 12 Month CD: 4.60% APY

EagleBank’s 12-month CD offers competitive rates paired with reasonable opening requirements and penalties. A minimum deposit of $1,000 is required, and the penalty for an early withdrawal is set at 90 days of interest.

With locations in Maryland, Virginia, and Washington, DC, EagleBank is a solid choice for local customers. Their online CDs range from 6 to 18 months, allowing for flexibility.

You can deposit up to $500,000 in a CD, but bear in mind that their mobile app doesn’t boast the best ratings in app stores.

EagleBank has earned an A+ rating from the Better Business Bureau, though it has faced scrutiny in the past. In 2022, the bank paid a $10 million civil penalty after allegations of misleading statements regarding family trust loans.

TAB Bank 1 Year CD: 4.52% APY

TAB Bank offers a strong 1-year CD rate and also provides a high-yield savings account, checking account, and money market account, making it an attractive option if you want to diversify your accounts with one bank.

However, TAB Bank does require a $1,000 minimum opening deposit. This is standard, but if you’re looking for lower initial investments, you might find better options.

With an A rating from the BBB, TAB Bank has faced some regulatory action in the past regarding charging fees exceeding the maximum limits in Iowa but maintains its commitment to rectifying the situation.

Credit Human 1 Year Share Certificate: 4.50% APY

Credit Human brings you a competitive rate on its 1-year term, alongside a modest minimum deposit of just $500. To join this credit union, all you need to do is become a member of the American Consumer Council, which can even cover your membership fee if you join during the application process.

Credit Human has received an A- rating from the BBB, primarily due to unresolved customer complaints, but their customer service remains a strong point.

Limelight Bank 1 Year Online CD: 4.50% APY

Limelight Bank, part of CCBank, presents a compelling option for a 1-year CD with standard early withdrawal penalties. A minimum deposit of $1,000 is required, aligning it with many of its competitors.

While Limelight Bank focuses primarily on CDs, it may not be the best choice if you’re looking for a broader range of banking options.

OnPath Federal Credit Union 1 Year Share Certificate: 4.50% APY

As one of the leading credit unions for 1-year CD rates, OnPath Federal Credit Union requires a $1,000 minimum deposit. The credit union also offers a high-yield checking account with up to 7.00% APY.

Joining this credit union is simple: a $5 contribution to the OnPath Foundation grants you membership. Eligibility also extends to residents, employees, or students in select Louisiana cities.

Securityplus Federal Credit Union 1 Year Share Certificate: 4.50% APY

Securityplus is another standout credit union for 1-year CD rates, requiring a $1,000 minimum deposit. Its early withdrawal penalty is favorably set at just 90 days of interest.

This credit union, which champions local banking, can be joined by anyone who becomes a member of the American Consumer Council.

Popular Direct 1 Year CD: 4.50% APY

Popular Direct shines with robust rates across its CDs, though it does necessitate a steep minimum deposit of $10,000. If you’re looking to invest less initially, you might want to explore other options.

While Popular Direct doesn’t have a BBB page, its parent bank holds an A+ rating, albeit with some recent controversies regarding Paycheck Protection Program loans.

Understanding 1-Year CDs and Their Functionality

A 1-year CD is a popular savings tool that guarantees a fixed interest rate for a full year. This means you can confidently expect a steady growth on your investment. However, unlike high-yield savings accounts, you won’t benefit from fluctuating rates.

Your principal amount is locked in; thus, early withdrawals incur penalties, generally deducted from your earned interest. CDs are ideal for funds designated for specific savings goals, such as a down payment or a vacation.

With lower risk than the stock market, investing in a 1-year CD can provide peace of mind as you save for shorter-term objectives.

Specialty 1-Year CDs

No-Penalty 1-Year CDs

If you anticipate needing access to your funds before the year ends, consider a no-penalty CD. While they typically offer lower interest rates, they provide greater withdrawal flexibility.

Bump-Up 1-Year CDs

If you’re anticipating interest rate increases, a bump-up CD allows you to adjust your rate if your bank raises its rates during your term. However, many banks offer these at lower rates than traditional CDs.

Factors Influencing 1-Year CD Rates

The federal funds rate greatly affects interest rates on banking products, including CDs. As rates rise, so do CD rates, and vice versa.

The Federal Reserve holds meetings throughout the year to assess economic conditions and make adjustments as necessary. Recently, the Fed has lowered rates, impacting the current market.

How to Choose the Right 1-Year CD

While interest rates are crucial, don’t overlook other factors like minimum opening deposits and early withdrawal penalties. If a high rate CD requires a steep minimum deposit you can’t meet, consider a lower-rate option that fits your budget better.

Steps to Open a 1-Year CD

Opening a 1-year CD starts by comparing options from various financial institutions. Most allow you to apply online or over the phone, and you can often visit a local branch if you prefer personal interaction.

Members of credit unions need to meet specific requirements, including opening a savings account. Make sure to have your identification and relevant documents ready for a smooth application process.

Building a CD Ladder with 1-Year CDs

A CD ladder strategy involves opening multiple CDs with varying terms, giving you access to some funds sooner while still locking in competitive rates long-term. This can minimize risk and maximize your savings potential.

Current 1-Year CD Market Overview

1-year CDs currently offer attractive rates compared to longer terms since the Fed has cut rates recently. Higher rates for shorter terms make 12-month CDs a wise choice for locking in solid returns.

Pros and Cons of the Best 1-Year CDs

• Higher rates than typical high-yield savings accounts
• Guaranteed returns
• Protection against rate drops
• FDIC-insured funds
• Early withdrawal penalties may deter impulsive spending
• Lower risk compared to stock market investments

• Inability to benefit from rising rates
• Restrictions on additional deposits
• Potential penalties for early withdrawals
• Possibly lower returns than the stock market

Exploring Alternatives to a 1-Year CD

If you prefer flexibility, consider a 3-month or 6-month CD, which currently offer competitive rates.

If you can withstand a longer commitment, longer-term CDs might provide even better rates, though the current market favors 1-year CDs.

While 1-year CDs often offer better rates, high-yield savings accounts allow for ongoing deposits and easier access to funds.

Money market accounts provide easier access and often come with debit card perks, though they may not match the highest rates of 1-year CDs.

Frequently Asked Questions about 1-Year CDs

Why Trust Our Expertise

To give you the best insights on selecting the right CD, we consulted with financial experts:

BI

How to choose the right bank?

Tania Brown, a CFP professional, emphasizes the importance of FDIC insurance for safeguarding your funds, and advises evaluating your banking experience preferences—local branch access versus online convenience.

Sophia Acevedo, a banking editor, suggests factoring in account fees and interest rates while choosing the right product.

How to pick among various CD terms?

Roger Ma, another CFP professional, advises aligning your CD term with your financial goals, like saving for a home.

Mykail James, a certified financial educator, echoes this sentiment, reminding you to consider how and when you’ll utilize your CD funds.

When to opt for a CD over a high-yield savings account?

Brown recommends evaluating how soon you’ll need access to your funds. If transactions before the CD’s maturity are likely, a high-yield savings account may be a better fit.

Ultimately, both CDs and high-yield savings accounts serve valuable roles in financial planning, and you can certainly utilize both to meet different saving objectives.

Our Methodology: Selecting the Best 1-Year CDs

We consistently monitor CD rates from over 60 financial institutions, updating our recommendations to keep you informed. Our editorial team operates independently, focusing on genuine product reviews that prioritize your needs.

We assess CDs on a scale of one to five stars, factoring in minimum deposits, penalties, and other key features. This ensures you get a comprehensive view of each product’s strengths and weaknesses.