If you have cash you can put aside for a while, a certificate of deposit, or CD, is a good way to earn a reliable return while keeping your money safe. The highest CD rates we've found reach up to 5.00% APY, though most top-tier options cluster around 4.35% to 4.50% APY.
With the Fed now in a rate-raising cycle for the first time in three years, those yields could go even higher.
One-year terms are among the most popular CDs, available at traditional banks, credit unions and fintech institutions. But not all CDs pay a competitive rate, so it's worth shopping around for an account with a rate, term, minimum deposit and early withdrawal penalty that meets your needs.
The top rate we've found is 4.45% APY on a one-year CD from EagleBank, which comes with a $1,000 minimum. USAlliance Financial is advertising a 4.36% APY on a 12-month CD with only a $500 minimum.
EagleBank CDs
Annual Percentage Yield (APY)
3.65% to 4.45% APY
Terms
1 month to 60 months
Minimum deposit
$1,000
Early withdrawal penalty
A penalty may be imposed for early withdrawal.
Terms apply.
Pros
- Above-average APYs
- Offers one-month CD terms
Cons
- $1,000 minimum for traditional CDs
- Doesn't offer no-penalty or bump-up CDs
- Only a dozen physical branches, mostly in the D.C. metro area
USAlliance Financial CDs
Annual Percentage Yield (APY)
3.80% to 4.36% APY
Terms
3 to 60 months (5 years)
Minimum deposit
$500
Early withdrawal penalty
Accounts are subject to early withdrawal fees and other conditions, which are detailed in the Truth in Savings Disclosure and Membership Agreement, Certificate Account Disclosure and Fees and Service Charges Schedule.
Terms apply.
Pros
- Above-average APYs
- $500 deposit minimum for standard CD
- No-penalty and step-up CDs available
- Free membership available by joining an affiliated non-profit
Cons
- Only four physical branches
If you want more flexible terms, American Express has a 4.25% APY on a 10-month CD with no minimum balance requirement.
American Express CDs
Annual Percentage Yield (APY)
2.25% to 4.25% APY
Terms
From 10 months to 5 years
Minimum deposit
None
Early withdrawal penalty
For CDs with terms less than 12 months, the penalty is 90 days' interest on the withdrawn amount. For terms between 12 and 48 months, it's 270 days' interest. For terms between 48 and 60 months, it's 365 days' interest. For terms of 60 months or more, the penalty is 540 days' interest.
Terms apply.
Pros
- Above-average APYs
- No minimum deposit
- Wide range of CD terms
Cons
- Penalty for early withdrawal is severe
- No physical branches
How much would $10,000 earn in a one-year CD?
The current average APY for a one-year CD is 1.71%, according to the Federal Deposit Insurance Corporation, which guarantees deposits at commercial banks.
If you opened an account with that yield, you'd have $10,171 at the end of the 12-month term.
But the top CDs offer significantly better returns, and competitive rates on 12-month CDs average around 4%. At that rate, you would earn $400 in interest on a $10,000 deposit in a year.
| Deposit | Bank | APY | CD Term | Interest earned | Total |
| $10,000 | EagleBank | 4.45% | 1 year | $445.00 | $10,445.00 |
| $10,000 | USAlliance Financial | 4.36% | 1 year | $436.00 | $10,436.00 |
| $10,000 | American Express | 4.25% | 10 months | $352.93 | $10,352.93 |
| $10,000 | Competitive average | 4.00% | 1 year | $400.00 | $10,400.00 |
| $10,000 | National average | 1.71% | 1 year | $171.00 | $10,171.00 |
How to choose a one-year CD
A traditional CD pays a fixed interest rate for a set term, usually between three months and 10 years — although some institutions offer terms as short as one month or as long as 20 years (or longer).
With a standard CD, you can't access the funds before it matures without paying an early withdrawal penalty. For some savers, being prevented from spending money intended for saving is a plus, not a drawback.
Choosing a CD comes down to understanding how much flexibility you want and when you think you'll need to access the money. Here are some other factors to consider:
Savings goal and timeline: Decide when you'll need access to your money. Short-term CDs (three to 12 months) offer more flexibility, while longer-term CDs lock your rate in for longer.
APYs and terms: Shop banks, credit unions and online lenders to find the best interest rates for your chosen term length.
Minimum deposit: CD minimum deposits can range from $100 to $1,000, with $500 being the most common amount and jumbo CDs can require as much as $100,000. Some institutions, including Ally Bank, have CDs with no minimum deposit requirement.
Early withdrawal penalty: Withdrawing funds before a CD matures typically incurs a penalty that can reduce your earnings. There are no-penalty CDs, but they often have lower rates.
Interest rate environment: If the Fed is expected to lower its benchmark rate, it makes sense to lock in a competitive rate now. If rates are forecast to rise, however, a shorter-term CD or a laddering strategy would offer more flexibility.
Offers in this section are from affiliate partners and selected based on a combination of engagement, product relevance, compensation, and consistent availability.
From 3.80% to 4.50% APY
From 6 months to 5 years
Bread Savings™ (formerly Comenity Direct) is a product of Comenity Capital Bank, a Member FDIC.
From 3.90% to 4.35% APY
From 6 months to 6 years
Marcus by Goldman Sachs® is a brand of Goldman Sachs Bank USA, a Member FDIC.
CD pros and cons
There are always benefits and drawbacks to opening a standard CD.
Pros
- Earns a higher return than a standard savings account
- Fixed interest rate means predictable earnings regardless of market changes
- Early withdrawal penalty discourages spending money meant for savings
- A CD ladder can let you periodically access cash while enjoying higher rates
Cons
- Earns a lower return than stocks and other investments
- Early withdrawal penalty means CDs have limited liquidity
- The value of your CD could decline if inflation rises above your APY
- Can't deposit additional money once the account is open (unless using add-on CD)
- May have a minimum deposit requirement
FAQs
What is a CD rate?
A CD rate is the interest percentage a bank pays you for depositing funds for a specific term. Because you're not withdrawing from the account, the rate is usually higher than that of regular savings accounts. CD rates are fixed, meaning they remain the same until the CD matures.
A good CD rate depends on the term length. Currently, the highest rates are for shorter-term CDs (six to 18 months), which are hovering around 4.10% APY.
Are CDs a good investment?
CDs are generally a good investment because your money grows without the risk of a rate drop or a turn in the stock market. Because most CDs are FDIC-insured, your money is guaranteed up to $250,000 per account holder. However, because your money is locked in, withdrawing funds before maturity usually means paying a hefty fine.
How much does a $10,000 CD make in one year?
How much a CD earns in one year depends on its APY. A one-year $10,000 CD with a 4.00% APY would yield $400 in interest.
Are CDs FDIC-insured?
CDs are insured by the Federal Deposit Insurance Corporation (FDIC) for up to $250,000. If you open a CD with a credit union, it's insured by the National Credit Union Administration for the same amount.
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