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Earn More on Your Savings – Compare 2026’s Best 1-Year CD Rates

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Best Certificate of Deposits According To CompareAccounts™

American First Federal Credit Union Certificate of Deposit: 3.75% APY - 12 Month Term

Western Alliance Bank^® High-Yield CD: 3.00% APY - 12 Month Term

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Best 1-Year CD Rates

The best 1-year CD rates reach highly competitive yields, often more than double the national average for a 12-month certificate of deposit. These elevated rates come at a critical moment for savers: when central banks pause rate hikes or signal future rate cuts, the window to lock in a competitive fixed return begins to narrow. Consequently, securing a high-yield CD now can protect your savings from future market depreciation.

A 12-month CD is one of the most popular savings vehicles in the country precisely because it strikes an optimal balance between yield and commitment. You earn a guaranteed fixed return over a defined period, without tying up your money for years. For instance, if you have a sum of cash you won’t need for the next twelve months — whether you’re saving for a home down payment, a car purchase, or a vacation — a 1-year CD lets you put that money to work at top-tier rates before banks begin trimming yields.

This guide covers everything you need to make a confident decision: how current 1-year CD rates compare to savings accounts, what to look for when shopping, how jumbo CDs differ, and what early withdrawal penalties entail. You can also use our free CD calculator to see exactly how much you could earn, or browse the full CD rates hub to compare all terms side by side.

What Are the Best 1-Year CD Rates Right Now?

Currently, the top 1-year CD rates from federally insured banks and credit unions significantly outpace inflation. These premium rates are available primarily from online institutions, which operate with lower overhead and pass those savings directly to depositors. By contrast, the national average for a 12-month CD sits at a fraction of what leading online banks offer, meaning the best available rates maximize your earning potential.

The following factors determine the specific rate you will receive:

• Institution type: Online banks and credit unions almost always offer higher rates than traditional brick-and-mortar banks.
• Minimum deposit: Some of the highest-yielding 1-year CDs carry minimums of $1,000 to $5,000. However, many top-rate offerings require no minimum deposit at all.
• Credit union membership: Credit unions often post the most competitive rates, but membership eligibility requirements may apply.
• Promotional vs. standard terms: Banks occasionally offer special “promotional” CD terms (for example, 11 or 13 months) with particularly strong yields.

Because interest rates shift frequently, it pays to comparison-shop. Use the CD rates hub to view live rates across multiple institutions.

1-Year CD vs. High-Yield Savings Account: Which Wins?

Both a 1-year CD and a high-yield savings account (HYSA) can earn competitive interest, but they function differently. The core tradeoff is rate certainty versus liquidity flexibility.

A high-yield savings account carries a variable rate that the bank can change at any time without notice. When central banks cut benchmark rates, HYSAs typically lower savings account yields just as fast. Conversely, a 1-year CD locks in your rate for the full term. Whatever APY you secure today remains fixed for 12 months, regardless of broader market fluctuations.

The practical implication: if you have money you genuinely won’t need to touch for a year, a 1-year CD provides superior yield protection. However, if there is any chance you might need the funds sooner, a high-yield savings account preserves your flexibility. For a deeper comparison, visit our high-yield savings account guide.

When Does a 1-Year CD Make the Most Sense?

A 1-year CD is not the right fit for every saver, but it excels in a specific set of circumstances. Understanding these scenarios can help you deploy your cash more effectively.

Firstly, choose a 1-year CD when you have a defined goal 12 months away. Examples include a home down payment or a tuition payment. A CD lets you earn a guaranteed return and gives you a natural maturity date to access funds.

Secondly, it is ideal when you want to protect against falling rates. In a rate-cutting cycle, locking in a fixed CD yield shields you from the rate reductions that erode returns on variable-rate accounts.

Conversely, a 1-year CD may not be ideal when you lack an emergency fund. If you anticipate needing the funds within the next 12 months for an unplanned expense, the early withdrawal penalties will negate your earnings. In such cases, stick to liquid accounts.

How Do 1-Year CD Rates Compare Across Different Bank Types?

Not all banks offer the same 1-year CD yields, and the gap between the best and worst can be substantial.

Online banks consistently lead the market. Because they operate without expensive branch networks, they have lower overhead and compete aggressively for deposits with high APYs.

Credit unions often match or exceed online bank rates. They are member-owned, not-for-profit institutions that return earnings to members via higher deposit rates. The tradeoff is that membership may be restricted by geography or affiliation.

Traditional banks typically pay far less. Major national banks offer 1-year CD rates well below the market average. While the convenience of a local branch may be appealing, you surrender significant yield in exchange.

What Are 1-Year Jumbo CD Rates?

A jumbo CD traditionally requires a minimum deposit of $100,000, though some institutions set the threshold lower. In exchange for this larger commitment, jumbo CDs historically offered a rate premium over standard CDs. However, modern rate environments often see this premium narrow considerably.

Today, the rate difference between the best standard 1-year CDs and the best 1-year jumbo CDs is typically small — often just a fraction of a percent. Some institutions even offer the exact same rate across both tiers due to competitive pressures.

Furthermore, depositors utilizing jumbo accounts must be mindful of FDIC and NCUA insurance limits. Federal insurance covers up to $250,000 per depositor, per institution. Therefore, if you have more than $250,000 to invest, you must split the funds across multiple insured institutions to maximize coverage. For a deeper look, see our jumbo CD comparison guide.

What Happens If You Withdraw Early?

Early withdrawal from a CD triggers a penalty. Federal law requires a minimum penalty of seven days’ interest for withdrawals made within the first six days of deposit, but banks set their own policies beyond that minimum.

For 1-year CDs, the most common early withdrawal penalties include:

• 60 days of interest: The bank withholds two months’ worth of interest earned.
• 90 days of interest: The bank withholds three months’ worth of interest earned (the industry standard).
• 180 days of interest: The bank withholds six months’ worth of interest earned.

If your accrued interest is less than the penalty at the time you withdraw, the bank typically takes the shortfall directly from your principal, meaning you could receive less money back than you initially deposited. Always verify penalty terms before funding an account.

How Do You Open a 1-Year CD?

Opening a 1-year CD is straightforward. Follow these core steps to ensure you secure the best possible account:

1. Compare APYs: The APY accounts for compounding and gives you a true apples-to-apples comparison across institutions. Check the CD rates hub.
2. Confirm Federal Insurance: Always verify that the institution is federally insured. Banks carry FDIC coverage; credit unions carry NCUA coverage.
3. Review Minimums and Penalties: Make sure the offer you choose matches your intended deposit amount and that you are comfortable with the institution’s specific early withdrawal fees.
4. Fund the Account: Complete the online application and initiate an ACH transfer from your linked checking or savings account.

Once you’ve opened the CD, the process is largely hands-off. Remember to set a calendar reminder for roughly 30 days before your CD matures so you have time to shop for a new rate before the automatic renewal window triggers.

Frequently Asked Questions

What is the best 1-year CD rate available right now?

The best 1-year CD rates available from federally insured institutions consistently outpace inflation and national averages. These top-tier rates are almost exclusively offered by online banks and credit unions, rather than major national branch banks. Because online institutions lack physical overhead costs, they pass higher yields directly to the consumer.

To capture the absolute highest APY, prioritize comparing digital-first institutions and evaluate promotional 11-month or 13-month terms, which often feature aggressive rates tailored to attract new deposits.

Is a 1-year CD better than a savings account?

For money you are certain you will not need for 12 months, a 1-year CD is generally the stronger choice. While high-yield savings accounts currently advertise competitive rates, those rates are variable. Consequently, they can fall immediately whenever central banks cut benchmark rates.

A 1-year CD locks in your rate for the full term, shielding your returns from macroeconomic rate drops. However, if you need liquidity or are actively building an emergency fund, a high-yield savings account remains the superior and safer vehicle.

What is the typical early withdrawal penalty for a 1-year CD?

The standard early withdrawal penalty for a 1-year CD is 90 days of interest, though individual banking institutions can charge anywhere from 60 to 180 days of interest. Federal law only mandates a minimum 7-day penalty for withdrawals within the first six days; beyond that, banks set their own proprietary guidelines.

Therefore, if you withdraw early before earning enough interest to cover the penalty, the bank will deduct the remaining shortfall directly from your principal balance. Always review fee disclosures before opening an account.

Do 1-year jumbo CDs pay higher rates than standard CDs?

In theory, jumbo CDs—which typically require deposits of $100,000 or more—are designed to reward larger balances with a premium rate. In practice, however, the rate gap between standard and jumbo CDs has narrowed significantly in recent years.

Today, the difference is often a marginal fraction of a percent, and some highly competitive online banks offer no premium at all. If you have a large deposit, it is worth checking jumbo tiers, but the minimal rate difference rarely justifies choosing an inferior institution solely for its jumbo label.