Best 1-year CD rates today
The highest 12-month CD we track right now pays 4.50% APY at Ally Bank. The one-year CD is the most popular term in the market: long enough to earn a meaningful premium over savings, short enough that your money is not tied up for years. Every account below is FDIC-insured up to $250,000 per depositor, per institution.
1-year CD rate table
Ally Bank
High Yield CD
APY
4.50%
Min. deposit
$0
Term
12 mo
Marcus by Goldman Sachs
High-Yield CD — early withdrawal penalty applies
APY
4.40%
Min. deposit
$500
Term
12 mo
CD Valet
CD
APY
4.08%
Min. deposit
$0
Term
12 mo
Capital One
360 CD, no minimum
APY
4.00%
Min. deposit
$0
Term
12 mo
National Average
CD
APY
2.92%
Min. deposit
$0
Term
12 mo
APYs are gathered from bank and rate-aggregator listings and may differ from the rate you are offered. Always confirm with the institution before opening an account.
When a 1-year CD beats a savings account
A high-yield savings rate is variable — it can drop the week after you open the account. A 1-year CD fixes your rate for the whole term, which is valuable when rates look more likely to fall than rise. The cost is access: pulling the money out early triggers a penalty, typically several months of interest.
A common middle ground is a CD ladder — splitting the deposit across several terms so part of it matures every few months. Compare the 6-month table and the full list of CD terms to build one, or keep the cash liquid in a high-yield savings account.
Frequently asked questions
How much does a 1-year CD pay on $10,000?+
At 4.35% APY, $10,000 earns about $435 over the full 12 months. At 4.00% it earns about $400. Because the term is exactly one year, the APY and your actual return line up closely.
Is it better to open a 1-year CD or a 6-month CD?+
If the 1-year rate is higher, locking it in protects you for twice as long — an advantage when rates are drifting down. If you may need the cash sooner, or expect rates to climb, the shorter term keeps your options open. Splitting the money between both is a reasonable hedge.
Do I pay taxes on CD interest?+
Yes. CD interest is taxed as ordinary income in the year it is credited, and the bank reports it on Form 1099-INT. That applies even if you leave the interest inside the CD until maturity.
What is the minimum deposit for a 1-year CD?+
It varies by bank. Several online banks require nothing at all, while others ask for $500 or $1,000. The minimum for each account is shown in the table above.