Terry Turner, Financial writer for Annuity.org
  • Written By
    Terry Turner

    Terry Turner

    Senior Financial Writer and Financial Wellness Facilitator

    Terry Turner is a senior financial writer for Annuity.org. He holds a financial wellness facilitator certificate from the Foundation for Financial Wellness and the National Wellness Institute, and he is an active member of the Association for Financial Counseling & Planning Education (AFCPE®).

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  • Edited By
    Savannah Pittle
    Savannah Pittle, senior financial editor for Annuity.org

    Savannah Pittle

    Senior Financial Editor

    Savannah Pittle is an accomplished writer, editor and content marketer. She joined Annuity.org as a financial editor in 2021 and uses her passion for educating readers on complex topics to guide visitors toward the path of financial literacy.

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  • Financially Reviewed By
    Thomas J. Brock, CFA®, CPA
    headshot of Thomas J. Brock, CFA, CPA

    Thomas J. Brock, CFA®, CPA

    Investment, Corporate Finance and Accounting Expert

    Thomas Brock, CFA®, CPA, is a financial professional with over 20 years of experience in investments, corporate finance and accounting. He currently oversees the investment operation for a $4 billion super-regional insurance carrier.

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  • Updated: July 31, 2023
  • 11 min read time
  • This page features 14 Cited Research Articles
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How to Cite Annuity.org's Article

APA Turner, T. (2023, July 31). The Best 1-Year CD Rates in 2023. Annuity.org. Retrieved June 22, 2024, from https://dev.annuity.org/personal-finance/banking/certificate-of-deposit/1-year-cd-rates/

MLA Turner, Terry. "The Best 1-Year CD Rates in 2023." Annuity.org, 31 Jul 2023, https://dev.annuity.org/personal-finance/banking/certificate-of-deposit/1-year-cd-rates/.

Chicago Turner, Terry. "The Best 1-Year CD Rates in 2023." Annuity.org. Last modified July 31, 2023. https://dev.annuity.org/personal-finance/banking/certificate-of-deposit/1-year-cd-rates/.

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Our Criteria

We conducted an assessment of 12-month certificate of deposit options provided by the country’s biggest banks and credit unions to find the best options, ultimately only featuring those that fit our strict criteria. To be eligible for this list, a bank or credit union must:

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Be a top 30 bank or top 10 credit union based on 2022 consolidated assets.

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Offer 1-year CDs at 3.00% APY or higher.

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Offer 1-year CDs in all 50 states.

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Be federally insured by the FDIC or the NCUA.

Understanding Our Methodology

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.

Learn more about our broader Editorial Guidelines.

When structured properly, a CD is fully ensured up to $250,000 for an individual account and $500,000 for a joint account. The Federal Deposit Insurance Corporation (FDIC) insures CDs issued by banks, and the National Credit Union Administration (NCUA) insures CDs issued by credit unions.

Editor’s Choice: Best Overall

GREAT FOR: MAXIMIZING YOUR RETURN

Credit Union Details

Alliant, founded in Chicago by United Airlines employees in the 1930s, is one of the largest credit unions in the United States. It reported $17 billion in assets and 700,000 members as of 2022.

Pros & Cons

Pros

  • High APY
  • Low-cost credit union membership
  • Robust online and no-fee ATM presence

Cons

  • $1,000 minimum deposit requirement
  • Lack of physical branches
  • Must have an active account with Alliant to purchase

Our Take

Alliant’s small brick-and-mortar footprint helps it offer highly competitive rates on CDs. It was the highest rate among banks and credit unions at the time of our review. While we found minimum deposit requirements, these were at the price of lower APY. Alliant’s minimum deposit is moderate among major banks and credit unions. Early withdrawal penalties are based on the number of days the CD is open — up to 90 days — minimizing your loss if you need your money early in your term.

Best for Small Depositors

GREAT FOR: COMPETITIVE APY WITH NO MINIMUM BALANCE REQUIREMENT
Bank Details

Owned by the company that issues credit cards of the same name, American Express National Bank is an online-only bank that offers CDs, high-yield savings accounts and a rewards checking account. According to the U.S. Federal Reserve, it had $155.3 billion in assets in 2022.

Pros & Cons

Pros

  • No minimum deposit requirement
  • Highly competitive APY
  • 24/7 customer service and support online or by phone

Cons

  • No physical locations
  • Limited banking products or services
  • Higher early withdrawal fees

Our Take

While several banks we reviewed offered the same APY, American Express was the only one that required no minimum deposit, making it an attractive option for smaller depositors. The early withdrawal fee — 90 days’ interest — was in the moderate range among the banks reviewed. It was highly comparable to the HSBC Bank 1-year CD.

Best for Liquidity

GREAT FOR: DEPOSITORS WHO MAY NEED ACCESS TO THEIR SAVINGS

HSBC BANK

JSBC Bank logo

APY: 4.85%
Bank Details

Founded in Hong Kong in 1865, HSBC had a global presence before making its way to America. It fully acquired Marine Midland Bank in 1997, rebranding it as HSBC Bank. In addition to its brick-and-mortar presence, HBSC Direct is an online-only operation with a national presence. HSBC had $162.4 billion in combined assets in 2022, according to the U.S. Federal Reserve.

Pros & Cons

Pros

  • Early withdrawal limited to 30 days’ interest
  • Both brick-and-mortar and online-only operations

Cons

  • High minimum deposit requirement ($1,000)
  • Not well-suited for CD laddering because HSBC only offers 6-month, 1-year and 2-year CDs

Our Take

HSBC offered a highly competitive APY. If you may need to withdraw your savings before your 1-year CD matures, HSBC has the lowest penalty across the term among the banks we reviewed with this high of a rate at just 30 days’ worth of interest. It was highly comparable to the American Express 1-year CD — but held the edge if you withdrew anytime 30 days after opening your CD.

Best Special Rate

GREAT FOR: PEOPLE LOOKING FOR A GREAT RATE BUT NOT PLANNING TO RENEW AFTER ONE YEAR

BMO

BMO Bank Logo

APY: 5.10% *(Special 13-Month CD Rate Only)
Bank Details

Dating back to 1847, BMO established its current charter in 2011 and is headquartered in Chicago. It serves customers nationwide with physical branches in the Midwest, Florida and Arizona. The U.S. Federal Reserve reported that BMO had $176.9 billion in consolidated assets in 2022.

Pros & Cons

Pros

  • APY competitive with standard rates

Cons

  • High minimum deposit ($1,000)
  • 13-month term required to qualify for the special rate

Our Take

Special rate or promotional CDs offer higher rates, but may revert to standard rates when they reach maturity. BMO’s special rate was the highest among those offered by the banks we reviewed. The bank’s terms are non-standard, so this term allows an extra month before reaching maturity. The rate was also highly competitive with the standard rates we found.

Others We Considered

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.

Other 1-Year CDs To Consider

Manufacturers and Traders (M&T) Bank
When we made our rankings, M&T offered a competitive APY on its 12-month Select CD — above its standard 1-year CD’s advertised rate. It required a $1,000 minimum deposit. But to get the Select CD rate, you had to open a checking account with M&T.
Ally Bank
Ally Bank’s no-penalty CD’s APY came in fractions of a point below BMO’s Special CD. But Ally’s no-penalty CD allowed depositors to withdraw all their money at any point after the first six days the account was funded with no early withdrawal penalty. It also came with no minimum deposit.
Navy Federal Credit Union
Navy Federal Credit Union offered its 1-year Special EasyStart Certificate with an attractive APY and a minimum deposit of just $50. But, ultimately, it was edged out by American Express as best for small depositors because the Navy Federal certificate still had a higher minimum deposit and a maximum deposit of $3,000. Credit union membership is also restricted to people with a relationship to the military. But this may be a good option for military members, veterans or their families.
Marcus (Goldman Sachs)
Marcus — an online-only bank — offered a competitive APY with a $500 minimum deposit at the time of evaluation. While the rate was competitive with other banks, it has a high early withdrawal penalty — 270 days’ interest.
Discover Bank
This online bank affiliated with the credit card by the same name was another of several offering a competitive APY. But it had a $2,500 minimum deposit and higher withdrawal penalty — six months’ interest — than HSBC.
Capital One
Capital One offered a solid APY with no minimum deposit requirement when we were evaluating institutions. While lower than other rates we found, the APY was still well above the average rate for standard CDs and savings accounts.
Citibank
Citibank offered a lower APY, but a higher minimum deposit — $500 — than Capital One.
JPMorgan Chase
Our cut-off point for consideration was a 3.00% APY, and JPMorgan Chase hit it exactly when we evaluated its products. The rate is still above the rates for most standard CDs, but a minimum $1,000 deposit was required for its 1-year CD.

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

How Are 1-Year CDs Different From Other Short-Term CDs?

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.

Is a 1-Year CD Right for You?

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:

A 1-year CD might make sense if:

  • You are not saving for something in the more distant future.
  • You are saving for a short-term goal such as a vacation, wedding or other mid-range purchase.
  • You are willing to forgo potentially higher rates with longer-term CDs.
  • You expect interest rates — and CD rates — to rise within the next year.
  • You expect not to need access to your savings for at least a year.

Frequently Asked Questions About 1-Year CDs

Are 1-year CDs worth it?

A 1-year CD typically offers significantly more interest than a savings account and allows you to access or reinvest your savings within a relatively short period. Your savings in a CD is also FDIC- or NCUA-insured for up to $250,000, so your savings are secure.

Which short-term investments have a similar return to 1-year CDs?

Short-term investments that will give you a similar return to a 1-year CD include Series I Savings Bonds, money market accounts and high-yield savings accounts. In some cases, simply paying off debt will give you a similar return.

Can you lose money with a 1-year CD?

You cannot lose money in a 1-year CD unless you withdraw money before it matures (resulting in an early withdrawal penalty). As long as the institution that issues the CD is NCUA- or FDIC-insured, the CD is insured up to $250,000 in the event the institution fails. But you may lose buying power if your APY fails to keep up with rising interest rates.

Please seek the advice of a qualified professional before making financial decisions.
Last Modified: July 31, 2023

14 Cited Research Articles

Annuity.org writers adhere to strict sourcing guidelines and use only credible sources of information, including authoritative financial publications, academic organizations, peer-reviewed journals, highly regarded nonprofit organizations, government reports, court records and interviews with qualified experts. You can read more about our commitment to accuracy, fairness and transparency in our editorial guidelines.

  1. Alliant Credit Union. (2023, April 27). Open a Certificate. Retrieved from https://promo.alliantcreditunion.org/certificates
  2. Ally Bank. (2023, April 27). No Penalty Certificate of Deposit. Retrieved from https://www.ally.com/bank/no-penalty-cd/
  3. American Express. (2023, April 27). Savings. Retrieved from https://www.americanexpress.com/en-us/banking/online-savings/cd/
  4. BMO Harris. (2023, April 27). Certificates of Deposit (CDs). Retrieved from https://www.bmo.com/en-us/main/personal/savings-and-cds/certificates-of-deposit/
  5. Capital One. (2023, April 27). 360 CD Account & Rates. Retrieved from https://www.capitalone.com/bank/cds/online-cds/
  6. Chase. (2023, April 27). Lock in a CD Relationship Rate Today. Retrieved from https://www.chase.com/personal/savings/bank-cd
  7. Citibank. (2023, April 27). Certificate of Deposit Account Rates. Retrieved from https://online.citi.com/US/ag/current-interest-rates/cd/fixed-rate-cd
  8. Discover. (2023, April 27). Certificate of Deposit. Retrieved from https://www.discover.com/online-banking/cd/
  9. HSBC. (2023, April 27). HSBC Certificates of Deposit (CDs). Retrieved from https://www.us.hsbc.com/savings-accounts/products/certificate-of-deposit/
  10. HSBC. (2023, April 27). What Are the Penalties for Early Withdrawal of Money from an Online CD? Retrieved from https://www.us.hsbc.com/savings-accounts/products/certificate-of-deposit/cd-faq/#early-withdrawl-penalty
  11. M&T Bank. (2023, April 27). CD Promotional Rates. Retrieved from https://campaigns.mtb.com/greatrates
  12. Navy Federal Credit Union. (2023, April 27). Certificate Rates. Retrieved from https://www.navyfederal.org/checking-savings/savings/savings-resources/certificate-rates.html
  13. Navy Federal Credit Union. (2023, March 22). Combined Certificate Disclosures. Retrieved from https://www.navyfederal.org/content/dam/nfculibs/pdfs/certificates-ira-trust/nfcu_602ed.pdf
  14. Alliant Credit Union. (n.d.). Is there a Penalty If I Close My Alliant Certificate Early? Retrieved from https://www.alliantcreditunion.org/help/is-there-a-penalty-if-i-close-my-alliant-certificate-early