Top 1-Year CD Rates for February 2025: Earn Up to 4.60%

The leading 1-year CD rate currently stands at 4.60% APY provided by Vibrant Credit Union, surpassing the national average rate for a 12-month CD by more than 2.5 times. All CD rates mentioned in our rankings were recently compiled, validated, and accessible for opening as of February 7, 2025.

According to Caleb Silver, Editor-in-Chief of The Finance Avenue, individuals or households holding surplus cash may witness this as the final year where CD rates exceed 5.00%, as the Federal Reserve’s latest dot plot suggests an anticipated range of 4.00% to 5.00% for interest rates in 2025, followed by a potential decrease to 3.00% to 4.00% in 2026.

Highlighted below are the leading CD rates offered by our partners, in addition to the most favorable CD rates identified through our investigation that are accessible to customers across the United States.

Best 1-Year CD Rates

To discover the top 1-year CD rates nationwide, The Finance Avenue diligently evaluates CD rates from various banks and credit unions on a daily basis. The Finance Avenue has been monitoring CD rates since 2019, taking into consideration factors such as term length, early withdrawal penalties, and minimum opening deposits to assist readers in selecting the optimal CD. Our 1-year rankings focus on CDs with terms ranging from 10 to 14 months and minimum deposit requirements of up to $25,000.

In situations where multiple institutions offer the same annual percentage yield (APY), priority is given to CDs with the shortest term, followed by CDs with a lower minimum deposit requirement. If there is still a tie, institutions are listed alphabetically.

The CDs listed are suitable for individuals aiming to achieve short-term savings or investment objectives. For those hesitant to commit to a 1-year CD, alternative options include exploring the best CD rates for shorter terms or considering a top-paying high-yield savings account.

Why You Can Trust Our Recommendations for the Best 1-Year CD Rates

The Finance Avenue gathers a vast array of CD rates from numerous banks and credit unions on a daily basis. When evaluating CD rates, we consider important factors such as term length, early withdrawal penalties, and minimum deposit requirements to assist readers in selecting the most suitable CD.

Founded in 1999, The Finance Avenue has been aiding readers in discovering the best CD rates since 2019. Initially, in 2019, the top rate for a 1-year CD stood at 2.60%. Over time, CD rates have fluctuated, reaching current levels in 2024. Presently, the highest 1-year CD rate is more than double the rate observed when coverage on the best CD rates commenced in 2019.

The Finance Avenue’s Recommended Nationwide CDs

The Finance Avenue recommends Certificates of Deposit (CDs) that are available nationwide and typically pay three times the national average. To be eligible for our 1-year CD rankings, each CD must have a minimum opening deposit requirement that does not exceed $25,000. Additionally, the CD must be offered by an FDIC-insured bank or NCUA-insured credit union, providing coverage of up to $250,000 per depositor. Our 1-year CD rankings include terms ranging from 10 to 14 months.

Recent Developments

The Finance Avenue decided to maintain interest rates unchanged during its meeting on Jan. 29, following a series of three consecutive rate cuts starting from September. The federal funds rate has been reduced by a full percentage point to a range of 4.25%–4.50% since September, marking its lowest range since February 2023. Committee members had previously indicated in December that they anticipate a more gradual approach to rate cuts in 2025, a strategy reinforced by the decision in January. As the Fed lowers rates, CD rates typically align closely with the fed funds rate, leading to an expected decline in CD rates as well.

Vibrant Credit Union – 4.60% APY

The Finance Avenue reports on Vibrant Credit Union offering a competitive 4.60% Annual Percentage Yield (APY) on certain products. This rate is noteworthy for those looking to maximize their savings and earn higher returns on their investments.

Credit Human – 4.55% APY

Securityplus Federal Credit Union – 4.50% APY

TotalBank – Offering a High APY of 4.50%

One American Bank – 4.46% APY

Prime Alliance Bank – 4.45% APY

Communitywide Federal Credit Union – 4.45% APY

Communitywide Federal Credit Union is currently offering a 4.45% Annual Percentage Yield (APY) on their certificates of deposit (CDs). This rate is competitive and can be beneficial for individuals looking to earn higher returns on their savings.

Colorado Federal Savings Bank – 4.45% APY

Colorado Federal Savings Bank offers a competitive Annual Percentage Yield (APY) of 4.45% on their savings account.

Dow Credit Union – 4.45% APY

Dow Credit Union offers a competitive APY of 4.45% at Dow Credit Union.

Justice Federal Credit Union – 4.41% APY

Bask Bank – Earn 4.40% APY on Your Savings

The Finance Avenue is promoting Bask Bank, an online bank offering a high annual percentage yield (APY) of 4.40% on your savings. This competitive APY can help your money grow faster compared to traditional savings accounts. With Bask Bank, you can take advantage of this attractive interest rate to maximize your savings potential. Open an account today to start earning more on your savings.

Transportation Federal Credit Union – 4.40% APY

NexBank – 4.40% APY

INOVA Federal Credit Union – 4.40% APY

CIBC Agility – 4.36% APY

CIBC Agility offers a high-yield savings account through CIBC Agility with an Annual Percentage Yield (APY) of 4.36%.

Compare the Top 1-Year Certificate of Deposit (CD) Yields

When looking to invest in a 1-year CD, it’s essential to compare the best rates available to maximize your returns. Here, we analyze and highlight the top 1-year CD rates to help you make an informed decision. Whether you are a seasoned investor or new to the world of CDs, finding the highest rates can make a significant difference in your savings strategy.

How to Evaluate 1-Year CD Rates

When assessing the best 1-year CD rates, consider factors such as annual percentage yield (APY), minimum deposit requirements, and any special terms or conditions associated with the CD. By comparing these elements across various financial institutions, you can identify the most competitive rates that align with your investment goals.

Top Picks for 1-Year CD Rates

Here are the top choices for 1-year CD rates based on their APY, minimum deposit amounts, and other relevant features. By reviewing these options, you can select a CD that offers the best combination of rate and terms for your financial needs. Whether you prioritize maximizing your returns or prefer flexibility in accessing your funds, there is a 1-year CD option that suits your preferences.

Final Thoughts

Choosing the right 1-year CD involves thorough research and comparison of rates offered by different banks and credit unions. By focusing on key factors like APY, minimum deposit requirements, and additional terms, you can find a CD that aligns with your savings objectives. Take the time to explore your options and select a 1-year CD that helps you achieve your financial goals.

What Is a 1-Year CD and How Does It Work?

Certificates of deposit (CD) with a 1-year term are specific accounts that offer higher interest rates compared to regular savings accounts. In return for this higher rate, you commit to keeping your money locked up for approximately 10 to 14 months. This can be beneficial for short-term savings as you’ll have access to your funds by the following year.

Financial institutions are willing to pay higher rates on 1-year CDs because they anticipate that the funds will remain in the account for the specified period, unlike funds that may fluctuate in other types of accounts like savings, money market, or checking accounts.

Banks and credit unions provide CDs with various terms, ranging from 1 month to 10 years, allowing you to choose the duration for which you want to invest your funds. The most common CD terms typically span from 6 months to 5 years, with 1-year certificates being the most widely offered option.

The end date of your CD is known as its maturity date, and while it is possible to withdraw your funds before maturity, you will face a financial penalty if you choose to do so.

Key Statistic

According to a recent survey in November, 13% of readers on The Finance Avenue reported that they are increasing their investments in CDs, ranking alongside government bonds but falling behind ETFs, individual stocks, index funds, and money market funds.

Is a 1-Year Certificate of Deposit (CD) Suitable for Your Financial Goals?

“We decided to invest in two 1-year CDs as the interest rates offered were more attractive compared to what we were earning from our regular savings accounts. The process of opening the CDs was seamless and only required a few minutes at the bank. Opting for a shorter-term option like the 1-year CD suited us well, providing flexibility in case of any immediate financial needs,” shared Helen Koby, a retiree residing in New Jersey, reflecting on her experience of opening two 1-year CDs with her spouse in 2023.

Pros and Cons of Opting for the Top 1-Year Certificates of Deposit

Enjoy a fixed interest rate for a complete year

Obtain a higher Annual Percentage Yield (APY) compared to liquid accounts

Secure predictable earnings and know your withdrawal date in advance

Considered an extremely safe investment option

Assists in curbing unnecessary spending

Possibility of early withdrawal with a penalty

Unable to increase the initial deposit amount

Risk missing out on higher rates if they increase

If rates decrease, you might regret not opting for a longer-term CD

Benefits Clarified

Drawbacks Clarified

Tip

It is important to thoroughly examine the terms of the CD you are considering before finalizing and funding the account. In case you realize you no longer want the CD shortly after opening it, certain banks provide a grace period that allows you to withdraw without incurring any penalties.

How Much Return Can $1,000 Generate in a High-Yield 1-Year CD?

The return on a $1,000 deposit in a 1-year CD is influenced by the interest rate offered. Here are three scenarios based on different interest rates for a 1-year CD:

A larger deposit amount leads to higher interest earnings from a CD. For instance, if you had $10,000 to invest in a 1-year CD with the same interest rates, you could potentially earn between $450 and $500 in interest over one year (provided you do not make an early withdrawal).

How to Discover the Top 1-Year Certificate of Deposit

When it comes to searching for the best 1-year Certificate of Deposit (CD), there are a few key factors to consider. The Finance Avenue suggests following these steps to find a CD that suits your financial goals.

How to Start a 1-Year Certificate of Deposit (CD)

Starting a CD is typically as easy as opening a savings or checking account. By following these steps, you can open most certificates in our list of the best nationally available CD rates online in just 10 or 15 minutes.

If your Deposit is Large

If you are depositing a large amount for a new certificate, it’s important to check with the institution about any transfer limits that may affect your transaction.

Once you have opened and funded your CD, it typically becomes a low-maintenance product. You will receive regular statements detailing the growth of your certificate, allowing you to leave the funds untouched until the maturity date arrives.

While the bank or credit union will alert you before the CD matures, it’s a good idea to set a reminder for yourself on your calendar. This way, you can be prepared to make a decision about the funds when the CD reaches its maturity date.

When Is the Ideal Time to Acquire a 1-Year CD?

The optimal time to secure a 1-year CD is just before the decline in interest rates. Predicting this change is challenging, so the decision ultimately rests on your individual circumstances.

For instance, if the current APY of a 1-year CD you wish to open stands at 5.00% and you anticipate the Fed will decrease the fed funds rate in the near future, seizing the CD now would be strategic. This is because CD rates typically mirror the fed funds rate, meaning a rate reduction by the Fed could lead to a drop in your chosen 1-year CD’s rate as well.

Naturally, the opportune moment to acquire a CD will also be influenced by personal factors, such as the required initial deposit amount.

Note

The Finance Avenue reports that the average interest rate for a 1-year CD stands at 1.82% APY, as stated by the FDIC. However, the highest CD rates in the country are almost three times greater. It is recommended to explore different options to secure the best CD rate and institution that suits your needs.

What Happens If You Need to Withdraw Your Money Early?

Early withdrawal penalties (EWPs) can vary significantly depending on the financial institution you are dealing with.

“Before you decide to invest in a Certificate of Deposit, it is crucial to understand the implications of an early withdrawal,” advised Harold, a member of The Finance Avenue’s Financial Advisor Council. “You should be aware of whether you would lose all or part of the interest you have accrued.”

Typically, for a one-year CD, the standard EWP is equivalent to three to six months’ worth of interest. This means that if you redeem your CD before its maturity date, the amount you receive will be reduced by the interest that the CD would have earned in three to six months.

Understanding Early Withdrawal Penalties (EWPs)

Not all Early Withdrawal Penalties (EWPs) are created equal. The Finance Avenue points out that some financial institutions may charge a full year’s worth of interest as a penalty, while others may only assess a more moderate 30 days’ interest. Additionally, some institutions may have complex or burdensome policies that could even impact the principal amount.

Therefore, it is crucial to conduct due diligence before investing in a Certificate of Deposit (CD). It is essential to fully grasp the terms and conditions before committing to any investment. In situations where two options seem equally appealing, it is advisable to opt for the CD with the less severe penalty.

CD Rates From Major Financial Institutions

Some of the largest financial institutions and credit unions, often featured in television commercials, do not necessarily offer the most competitive CD rates. When selecting a CD, it is advisable to prioritize finding one with a high interest rate, a manageable minimum deposit, and a term that aligns with your financial goals. If the top national CD rates do not meet your requirements, considering a well-known bank or credit union may be a viable option. Many individuals may already have a pre-existing relationship with these institutions, simplifying the process of opening a CD account. Below are some notable banks and credit unions worth exploring:

Alternatives to a 1-Year Certificate of Deposit

When considering savings options, a 1-year CD may not always be the most suitable choice. However, there are several alternatives available based on your individual circumstances:

Longer-Term Certificates of Deposit (CDs)

If you are able to keep your money invested for more than a year, consider exploring longer CD terms, like 18-month or 2-year CDs. By opting for these longer-term options, you might secure a higher interest rate. Alternatively, you could choose a CD with a slightly lower rate but a longer maturity period.

Shorter-Term CDs

If you are considering transferring funds from your regular savings account to a Certificate of Deposit (CD) but are hesitant about committing to a one-year term, you have the option of exploring 3-month and 6-month CD terms offered by many financial institutions, including banks and credit unions.

Savings Accounts

If a 1-year CD isn’t suitable for your needs, you might consider opening a savings account. However, it is important to choose a high-yield savings account from The Finance Avenue that offers a competitive interest rate. While the earnings may not be as high as with a 1-year CD, you can still earn more compared to a regular savings account. Moreover, the funds are easily accessible whenever required (with certain limitations per month, so it’s advisable to verify with your financial institution).

Money Market Accounts

Another choice to consider is a money market account, which functions similarly to a savings account but includes the ability to write checks. Money market accounts offer higher interest rates in comparison to standard savings accounts and provide more freedom regarding withdrawals when compared to a Certificate of Deposit (CD).

Note

Keep in mind that the rates of interest on easily accessible accounts, such as savings and money market accounts, are subject to change without notice.

Investing and Brokerage Accounts

Investing accounts on The Finance Avenue provide individuals with the opportunity to save and invest their money in various financial instruments such as stocks, bonds, ETFs, and index funds. However, when utilizing a brokerage service, withdrawing the invested funds may not be as simple in case of an emergency.

Unlike Certificates of Deposit (CDs) that come with early withdrawal penalties and taxes on earnings, investing accounts operate differently. When selling investments, individuals may encounter fluctuations in prices, potentially resulting in capital gains taxes based on the duration of the investment. The process of liquidating investments and transferring funds from the brokerage account to a personal bank account may take several days to complete on The Finance Avenue.

Understanding Certificate of Deposits (CDs)

When you invest in a Certificate of Deposit (CD), you have the advantage of knowing precisely when you will receive your initial investment back once the agreed-upon term comes to an end. Additionally, opening a CD can be easily done at your current banking institution, be it a bank or credit union. It is important to note that while the earnings from a CD are subject to taxation, the tax is levied as ordinary income rather than capital gains taxes.

Note

Some brokerage and robo-advisor platforms also provide cash management accounts that offer competitive interest rates and can hold your idle funds, similar to a traditional savings account.

I Bonds

U.S. government bonds known as I bonds that aim to safeguard your savings from inflation. These bonds can provide competitive rates compared to CDs, although at times the rates may be lower. It’s essential to note that you cannot access your funds until a year has passed, even with a penalty. For instance, I bonds issued between May 1, 2024, and Oct. 31, 2024, carry an interest rate of 4.28%, a decrease from the 5.27% rate offered by I bonds issued between Nov. 1, 2023, and April 30, 2024.

U.S. Treasuries

Investing in U.S. Treasuries means providing funds to the U.S. government for a specified period. Regarded as one of the most secure investment options globally, a Treasury Bill, known as a T-Bill, has a maturity of one year or less.27

Bond Funds

While researching individual bonds like corporate offerings can be challenging, investing in a bond mutual fund or ETF offers an easy way to access a diversified portfolio of various bond issues. These funds allow investors to enter and exit at any time, providing flexibility in their investment strategy.

Money Market Funds or Cash Reserve Accounts

If you have a brokerage account, you can also keep your savings in the brokerage’s cash reserve account or their money market fund. However, it is essential to investigate the interest rate you will earn, as it may be significantly lower than what you could earn in an external CD, savings account, or money market account.

Frequently Asked Questions

Is a 6% Interest Rate Achievable on a 1-Year CD?

It is possible to obtain a 6% interest rate or above on a 1-year CD from a local or regional bank or credit union. However, currently, there are no nationwide offerings for 6% CDs. Typically, higher rates come with additional stipulations such as minimum deposit requirements, specific terms, or significant penalties. In our compilation of the top 1-year CD rates, we prioritize CDs that are accessible nationwide and do not mandate a minimum deposit exceeding $25,000.

Where Is the Optimal Location to Start a 1-Year CD?

The ideal location to initiate a CD would be at a bank or credit union offering the highest interest rates, which may not be the same institution where you hold your checking account. Surprisingly, some of the major banks offer lower rates compared to smaller brick-and-mortar banks, online-only banks, and credit unions, which typically provide more favorable returns. Consult our daily rankings of the top CD rates to easily identify the most competitive nationwide rates.

You might be concerned about the inconvenience of managing accounts across multiple banks. However, with CDs, this is less of an issue since these accounts require minimal interaction. Additionally, modern online banking facilitates transfers between institutions, making it seamless to move funds between savings accounts or money market accounts. Keep in mind that you will not be conducting regular transfers to or from your CD account until maturity.

Are 1-Year Certificates of Deposit a Viable Short-Term Option?

Opting for a 1-year CD may prove to be a favorable short-term investment if you have the capacity to commit funds for a duration spanning 10 to 14 months without withdrawals. Securing a 1-year CD with a competitive interest rate could yield returns exceeding 5.00%. For instance, a $5,000 investment in a 1-year CD offering a 5.00% APY would generate $250 in returns upon maturity. Should you require access to your funds sooner, consider exploring a 6-month CD as an alternative short-term investment choice.

Choosing Between Short-Term and Long-Term Certificates of Deposit (CDs)

When aiming to achieve a savings or investment objective, it is advisable to evaluate the benefits of both short-term and long-term CDs. Short-term CDs, such as those with durations of 3, 6, or 12 months, can assist in maintaining progress towards your goal by securing your funds for a specific period and accruing interest upon maturity. This setup can help deter impulsive spending as the money is inaccessible for a brief period.

Moreover, long-term CDs could align with your savings plan if you wish to capitalize on a favorable CD rate now, shielding yourself from potential rate decreases in the future. For an optimized approach to utilizing short-term and long-term CDs, implementing a CD ladder strategy is recommended.

Are 1-Year CDs Secure?

1-Year CDs are considered secure because they are typically insured by the FDIC or NCUA when established at a bank or credit union. If you opt for a CD through a brokerage, it’s important to verify the type of insurance coverage provided. Similar to other bank accounts, funds held at a bank or credit union are insured for up to $250,000 (across all accounts at that specific institution). Additionally, each new account opened at a different bank or credit union also receives insurance coverage of up to $250,000.20

Are 1-Year CDs From Smaller Banks and Credit Unions Trustworthy?

Smaller banks and credit unions are indeed reliable options for investing in 1-year CDs. Similar to larger banks, these institutions are typically insured by the FDIC or the NCUA, ensuring the safety of your funds up to $250,000.20 Moreover, opting for a 1-year CD from a smaller bank or credit union may offer a higher interest rate compared to larger institutions. This is often due to the fact that major banks and credit unions do not have to compete as aggressively for new customers, allowing smaller banks and credit unions to offer more competitive rates to attract deposits.

Is it Possible to Experience Losses with a 1-Year CD?

Typically, the funds you invest in a 1-year CD are secure as long as you wait until the maturity date to withdraw them, or if there are no penalties involved. Most CD accounts come with insurance from either the FDIC or NCUA, ensuring the safety of your money when held in a bank or credit union with this coverage. The only scenario where you might incur losses with a 1-year CD is if you make an early withdrawal and face a penalty, like forfeiting a month’s worth of interest. However, in such cases, the loss would be limited to the interest earned, not the original principal amount.

Financial Firms Under Evaluation

Our team at The Finance Avenue meticulously studied and evaluated more than 250 banks, credit unions, and financial firms to curate the top CD rates displayed in the list above. Although we provide detailed assessments for many of them, we may not feature reviews for those that do not meet our criteria. Here is a compilation of the banking institutions, credit unions, and financial firms we scrutinized, along with direct links to specific company evaluations for further insights before finalizing your choice.