Best 1-year CD Rates

This page includes analysis of our favorite cards from The Simple Dollar's advertisers and the marketplace. Visit our advertiser disclosure to learn more.

Certificates of deposit are a safe way to store your savings and accumulate interest over time. Unlike traditional and high-yield savings accounts, however, you can’t touch the funds you invest in a CD for a certain period without incurring fees and penalties. CD term lengths vary from three or four months to several years. Good CDs have high-interest rates, robust customer service and perks, and low fees. The best one year CD rates range from 0.30% to 1.10%.

The 7 best 1-Year CDs of 2020

Provider 1-Year APY Min. Deposit Early Withdrawal Penalty
Ally Bank 1.00% $0 60 days’ interest
TIAA Bank .90% $5,000 91 days’ simple interest
Synchrony 0.75% $2,000 180 days’ simple interest
Marcus .85% $500 270 days’ simple interest
Barclay’s 0.85% $0 90 days’ simple interest
Capital One 0.50% $0 6 months’ simple interest
CIT Bank 0.30% $1,000 3 months’ simple interest

Rates accurate as of August, 2020.

The 7 best 1-Year CDs of 2020

Ally Bank – Best customer satisfaction

Ally’s online CD is simple, easy to access and comes with great customer service.

1-year APY: 1.00%

Customer satisfaction: 5/5 J.D. Power Rating

Minimum deposit: $0

SimpleScore: 4.4/5

Ally Bank has made a name for itself with its robust offering of online-only banking services, including checking accounts, savings accounts and CDs. It has no minimum deposit requirement for CDs, but investors with higher deposits may be able to secure better rates. Its one year CD rate is 1.00%, which is competitive in the industry. Ally Bank also has an extremely high customer satisfaction score, and with no fees to open or maintain a certificate of deposit, it’s a great option when it comes to 1-year CDs.

TIAA Bank – Best for yield pledge promise

TIAA Bank has a guaranteed high-yield CD that matches prices with the top 5% of competitors.

1-year APY: .90%

Customer satisfaction: N/A

Minimum deposit: $5,000

SimpleScore: 3/5

TIAA bank’s 1-year CD locks you into a guaranteed rate with a deposit of $5,000. TIAA assesses competitors weekly to ensure that it’s offering the best possible deal to their customers. The CD also offers a competitive rate of .90% APY, on par with many other CD providers, with term months ranging from three months to five years. There’s no monthly account fee, and the CD also comes with a 20-day maturity alert and automatic rollover. It does have a minimum deposit of $5,000, which may be out of reach for some investors.

Synchrony – Best customer perks

With consistently great rates, customer perks and a great mobile app, Synchrony checks all the boxes when it comes to a 1-year CD.

1-year APY: 0.75%

Customer satisfaction: N/A

Minimum deposit: $2,000

SimpleScore: 3.75/5

Synchrony’s 1-year APY rate is 0.75%, which is competitive in the industry. It also offers a variety of perks, including 24/7 digital banking and dedicated phone lines for long-time customers. Its website features easy-to-use CD calculators and comprehensive educational resources that cover a variety of banking topics, so you can stay educated about how to make your money work for you. When it comes to CDs, Synchrony offers term lengths ranging from three to 60 months. It does have a minimum deposit requirement of $2,000, so it may not be a good fit for investors with savings lower than that amount.

Marcus – Best rate guarantee

Marcus has some of the best rates around when it comes to CDs, making it a competitive option for safely and sustainably growing your savings.

1-year APY: .85%

Customer satisfaction: N/A

Minimum deposit: $500

SimpleScore: 3.75/5

Marcus is the online lending and banking branch of financial giant Goldman Sachs. Its 1-year CD rates are .85%, which is one of the highest yield CD rates available. Those looking to make the most of their CD investment will be hard-pressed to find rates as good as Marcus’. The CDs also come with a 10-day rate guarantee, meaning if its CD rates go up within 10 days of opening an account, your rate is increased to match it. Even if the rate is lowered, you stay locked in at your original APY.

Capital One – Best mobile app

Capital One offers a simple, user-friendly mobile app that makes managing your CD investments easier than ever.

1-year APY: 0.50%

Customer satisfaction: 4/5 J.D. Power Rating

Minimum deposit: $0

SimpleScore: 3.6/5

Capital One is one of the most customer-friendly lenders that offer CDs. It has a simple, intuitive mobile app that can help users to manage their money on the go. When it comes to CDs, there’s no minimum balance requirement and guaranteed returns. At 0.50%, Capital One’s rates are on par with others in the market, making it still competitive within the industry.

CIT Bank – High APY

CIT Bank has kept CD rates high for customers, despite the market trending lower, making it a top pick for 1-year CD rates.

1-year APY: 0.30%

Customer satisfaction: N/A

Minimum deposit: $1,000

SimpleScore: 3.25/5

With the high APY among banks and CD providers, CIT Bank scores high on the list of 1-year CD rates. Once you open an account, interest compounds daily, meaning your earning potential is maximized over the term of the deposit. The minimum deposit of $1,000 can be slightly daunting to new investors with little funds to start, but it’s much more accessible than other banks that require higher deposit minimums.

What is a certificate of deposit?

A certificate of deposit, or CD, is a way to safely and reliably invest your money over the short to medium term, as they have much less associated risk than investing in stocks. Like high-yield savings accounts, they offer much better interest rates than traditional savings accounts, with an average rate of around 1.50%. One downside when it comes to CDs is that you’ll usually face penalty fees if you remove any funds from the account before the term limit is up.

How should I choose the right CD?

Choosing the right CD is largely a matter of personal preference. In many cases, it’s a smart idea to shop around and compare rates before deciding on a particular CD. If you’re wondering, “What is the best 1-year CD rate?” you’ll be glad to know that our recommended lenders all have rates from 0.50% to 1.10%, which are some of the most competitive in the industry. If you particularly value other banking aspects, such as robust customer service or online banking, you may prefer a lender with strengths in those areas. In order to choose the best CD for you, you should:

  • Decide how long you want to invest.
  • Research different options and compare rates.
  • Look into costs and fees associated.
  • Keep in mind any additional perks.
  • Make sure to choose a CD with a minimum deposit that fits your budget.

What are early withdrawal penalties?

Almost all CDs charge penalty fees for early withdrawal. If you withdraw funds from your CD before the term length is up, you’ll usually be subject to these fees. Because of this, you should only invest money in CDs that you’re very comfortable “setting and forgetting.”

For example, Ally Bank only imposes 60 days of interest penalty for early withdrawal, which means that the equivalent of 60 days of interest on your account will be subtracted from your total should you withdraw your funds before the end of the term. However, some banks do off no-penalty CDs, typically for a short and specific amount of time, that will allow customers to withdraw all funds early should they need to.

The bottom line

CDs can be a great way to sustainably grow your money over a term length of months to years. Our top picks for 1-year CDs all come from established, well-reviewed members of the industry, so you can rest assured that your investment will be well taken care of. The best 12-month CD rates range from 0.50% to 1.10%. If you’re looking to save up for an expense, such as a home downpayment or renovation, a CD is an attractive investment option with much lower risk than investing in the stock market.

Margaret Wack
Margaret Wack
Contributing Writer

Margaret Wack writes about personal finance, health, wellness, arts and culture, among other topics.

The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved, or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.

Loading Disqus Comments ...