With interest rates on the move, finding the right place to park your savings can feel like a moving target. One-year Certificates of Deposit (CDs) offer a way to lock in a fixed interest rate for a year, potentially earning more than standard savings accounts while keeping your money secure. But with so many banks offering varying terms and conditions, it’s crucial to understand what makes one CD stand out from another.
This guide breaks down the best 1-year CD rates available as of November 2025, helping you make an informed decision based on your savings goals and risk tolerance.
Key Factors to Consider When Choosing a 1-Year CD
While a high Annual Percentage Yield (APY) is enticing, don’t let it be the only factor in your decision. Here’s what else matters:
- Minimum Deposit: Can you comfortably commit this amount without jeopardizing your short-term needs? CDs tie up funds for their term, so ensure the minimum deposit aligns with your available savings.
-
Early Withdrawal Penalties: Understand the cost of accessing your money before maturity. Typical penalties range from three months’ interest to a more significant portion, depending on the bank.
-
Compound Interest Frequency: The more frequently interest compounds (e.g., daily vs. monthly), the faster your balance grows. Look for CDs that offer daily compounding for maximum gains.
-
Fees: Avoid accounts with hidden fees or maintenance charges that eat into your earnings. Opt for CD options without additional costs.
-
FDIC or NCUA Insurance: Ensure your chosen bank or credit union is FDIC-insured (up to $250,000 per depositor) or NCUA-insured (for credit unions), protecting your investment in case of financial institution failure.
Top 1-Year CD Rates Available Now
Here’s a snapshot of some of the most competitive 1-year CD rates available as of November 2025:
- BMO Bank: Offers a 13-month CD with a competitive APY and other term lengths ranging from three to 60 months. Minimum deposit is $1,000. Note that early withdrawals incur a penalty equal to 180 days’ interest.
- Bread Savings: This bank offers various CD terms, including a 12-month option with an attractive APY. The minimum deposit is $1,500.
- First Internet Bank: Stands out with a 12-month CD at a competitive APY and caters primarily to online banking preferences. Minimum deposit is $1,000. Be aware that early withdrawals result in a penalty equal to 180 days’ interest.
-
Popular Direct: This bank offers CDs from three months to 60 months, with their 12-month CD boasting a compelling APY. However, the minimum deposit is $5,000, making it less accessible for smaller savings amounts. Early withdrawals are penalized at 180 days’ interest.
-
Other Strong Contenders: Sallie Mae Bank (12-month CD with an attractive APY), Capital One (offering a range of competitive rates). Minimum deposits and early withdrawal penalties vary across these institutions, so review terms carefully before committing.
Is a 1-Year CD Right for You?
CDs are ideal for:
- Short-Term Savings Goals: If you have a specific goal within the next year (e.g., down payment on a car, home renovations), locking in a fixed rate can help reach your target.
- Risk-Averse Savers: CDs offer FDIC or NCUA insurance, protecting your principal from market fluctuations.
However, CDs might not be suitable if:
- You Need Liquidity: Early withdrawals come with penalties. Choose a high-yield savings account for more flexible access to funds.
- Longer-Term Goals: Consider other investment options for goals beyond one year, as CD rates may not keep pace with inflation or market returns over extended periods.
Explore Alternatives:
If CDs don’t fully meet your needs, explore these alternatives:
- High-Yield Savings Accounts (HYSA): Offer competitive interest rates while providing more access to funds than CDs.
- Money Market Accounts: Combine features of savings and checking accounts with higher yields than traditional savings.
- Treasury Bills (T-Bills): Backed by the U.S. government, T-bills are considered very low risk but generally offer lower returns than high-yield CDs or HYSAs.
Shop Around for the Best Deal:
Interest rates fluctuate, so regularly compare offers from various banks and credit unions. Utilize online resources like GOBankingRates to streamline your research and find the best 1-year CD rate that aligns with your financial goals.
