Best 1-Year CD Rates for December 2024: Up to 4.65%
Certificates of deposit (CD) with a 1-year term are special types of accounts with interest rates that are usually higher than other savings accounts. In exchange for the high rate, you must keep your funds locked up for about 10 to 14 months. This may be good for your short-term savings since you can access the money by next year.
The reason banks and credit unions are willing to pay higher rates on 1-year CDs is because they can generally count on those funds staying in the account, unlike funds that can unpredictably come and go in a savings, money market, or checking account.
Banks and credit unions offer CDs in a variety of terms, from 1 month up to 10 years, so you can choose how long you're willing to lock up your funds. The most common CD terms, however, range from 6 months to 5 years, with 1-year certificates being the most widely available of all.
The date your CD ends is called its maturity date, and although it’s not impossible to withdraw your funds before maturity, you’ll incur a financial penalty if you do so.
When asked in November where they are investing their money, 13% of Investopedia readers said they are putting more into CDs, tied with government bonds but behind ETFs, individual stocks, index funds, and money market funds.
«We got two 1-year CDs because the interest rates were better than what we were earning on our savings accounts. It was very simple to sign up and only took a few minutes at the bank. The time frame for the CD was good; short-term worked for us in case we need the money,» said Helen Koby, a retired New Jersey resident who opened two 1-year CDs with her husband in 2023.
Fixed rate for a full year
Higher APY than liquid accounts
Predictable earnings and date of withdrawal
Extr
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