Best 1-Year CD Rates for September 2023
A one-year CD might be the perfect place to stash your savings. Although the funds will be locked up for a full year, you will have the chance to earn a worthwhile amount of interest on your savings. After a spate of rate hikes from the Federal Reserve, interest rates on CDs are averaging 1.76% as of Aug. 21, according to the Federal Deposit Insurance Corp. However, some banks offer much higher yields. So what are the best CD rates for one year? Believe it or not, it’s possible to find one-year CDs offering APYs of 5.50%, and perhaps higher.
Keep reading to learn about some of the best one-year CD rates along with the account minimums for September 2023.
Best 1-Year CD Rates
Here is a glance at some of the best one-year CD rates:
BMO Bank: APY for its 12-month BMO Alto CD
Bread Savings: APY
First Internet Bank: APY
North American Savings Bank: APY for a 13-month CD
Popular Direct: APY
Bask Bank: APY
Live Oak Bank: APY
Capital One: APY
BMO Bank
APY for the BMO Alt CD
Term: 12 months
Account minimum: None, but account must be funded within 10 days
BMO Bank offers CD term lengths that range from six to 60 months, as well as offerings from BMO Alto. If opting for the BMO Alto CD, you’ll currently find a 12-month CD at APY. There’s no minimum deposit or balance needed to lock in the high rate, but the CD must be funded within 10 days of account opening. If you’re looking to lock in a high yield for the longer term, consider BMO Alto CDs that range from six months and up to 60 months.
Bread Savings
APY
Term: 12 months
$1,500
Bread Savings, formerly known as Comenity Direct, offers 12-month CDs with a APY. They have multiple CD term lengths to choose from, ranging from one to five years. You’ll need to deposit at least $1,500 into each account to get started. Upon renewal, 12-month CDs earn 5.55% APY as of Sept. 12.
First Internet Bank
APY
Term: 12 months
Account minimum: $1,000
First Internet Bank offers one of the top APY options on this list. The bank offers CD term lengths ranging from three months to 60 months. But the higher APY offered is through its 12-month CD option. If you want to work with this bank, you’ll need to be comfortable opening your CD online. However, make sure you won’t need access to your funds — the early withdrawal penalty is 180 days’ interest.
North American Savings Bank
APY
Term: 13 months
Account minimum: $5,000
In addition to standard CDs, North American Savings Bank also offers special CD term lengths of seven, 15, 24 and 36 months. You’ll need at least $1,000 to open a special CD through this bank. If you live in Missouri, you might find a branch nearby. Otherwise, you can open their CDs online. Shorter- and longer-term CDs are available in-branch.
Popular Direct
APY
Term: 12 months
Account minimum: $10,000
Popular Direct offers CD term lengths ranging from three months to 60 months. The 12-month CD comes with the highest APY offering of . However, the minimum deposit requirement is relatively high. You’ll need to deposit at least $10,000 to lock in this attractive APY.
Bask Bank
APY
Term: 12 months
Account minimum: $1,000
Bask Bank offers four CD term lengths that range from six to 24 months. In order to open a CD through Bask Bank, you’ll need a minimum deposit of $1,000.
Live Oak Bank
APY
Term: 12 months
Account minimum: $2,500
Live Oak Bank offers seven different CD term lengths, ranging from six months to five years. The highest APY available is , tied to the 12-month CD option. You’ll need to deposit $2,500 to open a CD through Live Oak Bank. After that, you can let your interest accrue or have it disbursed to you monthly.
Capital One
APY
Term: 12 months
Account minimum: None
Capital One 360 CD accounts offer terms ranging from six to sixty months. The 12-month CD with a APY. The lack of a minimum deposit requirement is especially enticing. You can start building your savings through a CD even if you don’t have thousands of dollars to tuck into it.
How To Find the Best 12-Month CD Rates
An easy way to find the best CD rates is to look at a roundup like the one GOBankingRates publishes each day. It’s also a good idea to search rates yourself online as well as through your own bank.
How To Choose a 12-Month CD Rate
You might be wondering, can you get 6% on a CD? It’s possible, but rates aren’t the only thing to look at when you’re shopping for one. You might have to compromise between a high rate and the following considerations:
Minimum to open: Your money will be tied up for a year, so it’s a good idea to select a CD with a minimum you’re confident you can do without until the CD matures.
Withdrawal penalty: Banks charge early-withdrawal penalties for closing out the CD before it matures. A typical penalty for 12-month CDs is three months’ interest, but some banks charge much more.
Compound interest: Compound interest is interest earned on the principal balance and any interest that has accrued. Your balance will grow fastest if the interest compounds daily even if it’s only credited to your account once per month.
Fees: Fees eat away at the appreciation you earn on your CD. Select one with no fees — and if you keep checking and savings accounts with the same bank, avoid fees on those accounts as well.
FDIC- or NCUA-insurance: The FDIC insures bank deposits up to $250,000 per depositor, so if your bank goes under, that much of your money is protected. The National Credit Union Association serves the same purpose for accounts held by credit unions. However, CDs that you purchase through a broker may not be insured.
How To Compare 1-Year CD Rates
A good strategy for comparing rates is to research the best CD rates first and then factor in the considerations described above. High rates are great, but if the CD ties up too much of your money or charges you fees, the rate might not be worth it.
Alternatives to 1-Year CDs
CDs aren’t your only choice for earning good returns on your money with little or no risk. Here are some alternatives to consider:
High-yield savings account: National average savings account rates are much lower than average CD rates — just 0.43%. But whereas high-yield CDs offer double or triple the national average CD rate, the best high-yield savings account rates can be more than 10 times the national average — even matching high-yield CD rates, and without tying up your funds.
Money market account: Money market accounts are a type of bank and credit union account that combines features of checking and savings accounts. They have a higher average interest rate than savings accounts, and high-yielding money-market rates are competitive with high-yield savings accounts and CDs. While minimum deposits can be high, money-market accounts offer check-writing privileges and debit cards to make it easy to access your funds.
Treasury bills: Treasury bills are U.S. Treasury-issued bonds with maturities of up to one year. Whereas a typical bond grows your money by accruing interest, you earn a return on T-bills by purchasing them at a discounted price and selling them at maturity for full face value. While not completely risk-free like a CD or savings account, they’re about the safest security you can purchase because they’re backed by the “full faith and credit” of U.S government.
Final Take
The rising interest rate environment has pushed CD rates higher. If you are looking for a CD now, take the time to shop around. Doing research can lead you to much higher CD rates. If you prefer more flexibility than a CD can offer, consider a high-yield savings account, a money market account or a T-bill instead.
Compare CD Rates
FAQ
Who has the highest 12-month CD rate?
As of Sept. 15, 2023, Popular Direct offers one of the highest rates for their 12-month CD at 5.55% APY. However, interest rates change on a regular basis. Before moving forward with a CD, make sure to shop around.
Which bank gives 7.00% interest on savings accounts?
As of Sept. 15 2023, there are no financial institutions offering 7.00% interest on a savings account. However, interest rates are changing on a regular basis. If interest rates continue to rise, there may be the potential for interest rates to hit the 7.00% APY mark.
What is the best CD rate for $100,000?
The best CD rate for $100,000 varies based on the term length you are comfortable with. In general, a longer CD term translates into a higher APY. With that, you can likely lock in the best rates by opting for a longer CD term at a financial institution known for offering competitive rates.
Sarah Sharkey and Cynthia Measom contributed to the reporting for this article.
Rates are subject to change; unless otherwise noted, rates are updated periodically. All other information on accounts is accurate as of Sept. 12, 2023.
Editorial Note: This content is not provided by any entity covered in this article. Any opinions, analyses, reviews, ratings or recommendations expressed in this article are those of the author alone and have not been reviewed, approved or otherwise endorsed by any entity named in this article.
GOBankingRates is a personal finance and consumer interest rate website and an online marketing company serving top-tier banks, credit unions and other financial services organizations. Some companies mentioned in this article might be clients of GOBankingRates, which serves more than 100 national, local and online financial institutions. Rankings and roundups are completely objective, and no institution, client or otherwise, paid for inclusion or specific placement. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author alone and have not been reviewed, approved or otherwise endorsed by the companies included in the article. All fees and rates are subject to change at the issuers’ discretion. Some interest rates might be short-term or promotional offers only, and it is possible additional terms and conditions must be met to obtain the interest rates listed. Rates and availability might vary by region. Verify terms and conditions before opening an account.
GOBankingRates bases its assessment of “best” and “top” products on the above-stated parameters to create a baseline for comparison. This assessment is an approximation of “best” and “top” designed to help consumers find products that might be appropriate for them. There could be other options available as well. Consumers should consider various options appropriate for their circumstances.
This article originally appeared on GOBankingRates.com: Best 1-Year CD Rates for September 2023
