The Best 1-Year CD Rates in 2023

Annuity.org’s independent editorial team assessed 1-year certificate of deposit options offered by the biggest banks and credit unions across the country to determine the most competitive rates.

The team selected the 30 largest banks and 10 largest credit unions based on consolidated assets as reported by the U.S. Federal Reserve or National Credit Union Administration, and evaluated that list to determine the qualifying institutions for their rankings.

They then made sure that a bank or credit union was offering 1-year CDs in all 50 states and was insured by either the FDIC or the NCUA.

Of the 18 qualifying banks and credit unions under these criteria, 15 offered CDs with 1-year terms. Two additional institutions offered CDs with comparative terms and were also included in these evaluations. The team further narrowed the selection to only those institutions offering 3.00% APY or higher for their final comparisons, resulting in a shortlist of 13 institutions.

The team based their final selection on factors such as APY, minimum deposits, early withdrawal penalties and any bonuses or promotions offered by the institutions.

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The banks and credit unions we reviewed offered highly competitive rates for 1-year CDs. Several missed out on making our list by only a fraction of a percentage point. But many offered other features that — when coupled with competitive rates — may be worth considering.

These were the banks and credit unions on our list which offered 3.00% APY or higher for most investors.

Three other banks among those we reviewed offered lower rates, with the lowest being on a 1-year CD from First-Citizens.

Short-term CDs — including 1-year CDs — typically have lower rates than long-term CDs like 3- or 5-year CDs.

The general idea is that short-term depositors are taking less risk, so the bank or credit union offers a lower interest rate. Long-term depositors are taking on more risk with the possibility of changing interest rates, so they are rewarded with higher interest rates.

But these are not hard and fast rules. Several of the 1-year certificate of deposit rates we reviewed offered higher interest rates than some longer-term CDs, which is largely attributable to a partial inversion of the U.S. Treasury curve. This can vary within and between institutions.

Short-term CDs are typically considered to be those that reach maturity in 12 months or less. These can include terms from one month to one year. Banks and credit unions are free to set the terms of their CDs. They may choose to offer several terms or only a few.

A 1-year CD typically affords you a higher return than conventional savings accounts and greater flexibility with your savings than longer-term CDs — in exchange for a lower return on your investment.

It may be the right choice for you depending on your personal finance strategy and whether specific benefits in a certificate of deposit meet your financial goals: