7/3/2023
Certificates of deposit, or CDs, are essentially agreements between savers and financial institutions that offer consumers a high interest rate on their savings in exchange for holding the deposited funds for a fixed period of time. For this reason, CDs are also referred to as time deposits.
Unlike savings accounts or money market accounts, with certificates of deposit you have to leave the money for 12 months (or the term for which it is contracted) in exchange for a higher yield. In case of early withdrawal you may suffer penalties.
Here you can see the best CDs that you can contract in the USA, generally the ones that offer higher rates are the online banks, but there are also good rates in traditional banks in offices. We include in the list some CD with term of 13 or 14 months as it is a similar term if the interest rate is high.
First Internet Bank - 5.35% APY
First Internet Bank is one of the pioneers in online banking, and has been offering its services since 1999 offering its products to all 50 U.S. states.
The bank specializes in savings products offering savings accounts, money market accounts and CDs. It markets up to 8 Certificates of Deposit with different terms and different yields. The 12-month deposit has an interest rate of 5.35% APY, one of the highest interest rates available.
The minimum amount for the 1-year CD is $1,000 and in case of early withdrawals there is a 6-month penalty.
⏳ Term (months): 12
💰 Minimum amount: $1,000
❌ Penalty for early withdrawal: 6 months interest.
🌐 More info at: CDs of First Internet Bank
CFG Bank - 5.25% APY
CFG Bank is a Baltimore-based online bank that offers its products to customers nationwide via the Internet. It offers different savings products, but CFG Bank's highest yielding product is its 12-month CD, with a rate of 5.25% APY.
Once the 1-year certificate of deposit is contracted, you can no longer deposit additional money, so you must contract it from the beginning for the amount you want. There are other CFG CDs with different terms, but the one with the highest yield is the 1-year.
⏳ Term (months): 12
💰 Minimum deposit: $500
❌ Penalty for early withdrawal: 6 months interest.
🌐 More info on: 12-Month Term Certificate Of Deposit
My eBanc - 5.10% APY
My eBanc TM is a division of Bradesco BAC Florida Bank, although it is headquartered in Florida, it offers its savings products to the entire country, since they can be contracted online.
My eBank's online time deposits offer very competitive rates, with no maintenance fees and daily compound interest to maximize earnings. Interest can be received in the form of a check, transferred to a transaction account or deposited back into the term deposit at renewal.
The 12-month deposit offers interest at 5.10% APY and can be arranged as low as $5,000.
⏳ Term (months): 12.
💰 Minimum amount: $5,000.
❌ Penalty for early withdrawal: 3 months interest.
🌐 More info on: My ebank online deposit
Capital One: 1 year CD - 4.75% APY
Capital One's 360 CD's can be contracted without a minimum amount, you can contract them for the amount you want and with terms from 6 to 60 months. In the case of Capital One's 12-month Certificate of Deposit, the interest rate is 4.75% APY, which is above the national average.
It is possible to withdraw the money before the end of the term, but in that case a penalty of 3 months interest is imposed.
Interest is calculated daily and paid into your checking or savings account each month.
⏳ Term (months): 12.
💰 Minimum amount: $0
❌ Penalty for early withdrawal: Three months of interest.
🌐 More info at: CD 360 from Capital One
CIT Bank: 13 Month CD - 4.65% APY
CIT Bank offers a 13-month online deposit with an interest rate of 4.65% APY that you can sign up for as low as $1,000.
CIT Bank offers CDs with terms up to 5 years, but the best offer is 6 and 18 months. Currently, it also offers a 6-month deposit with a yield of 5% APY.
In addition, the savings accounts of this online financial institution offer yields well above average, and with total availability of your money.
You can sign up for CIT Bank CD online from across the U.S., and also at branches in California, Texas, Colorado, Arizona, Nevada, Kansas, Nebraska and Hawaii.
⏳ Term (months): 13
💰 Minimum amount: $1,000
❌ Early withdrawal penalty: Three months of interest.
🌐 More info on:CD Rates of CIT Bank
Citibank - 4.05% APY
Citibank offers the best 12-month deposit of all the major US banks. Their certificates of deposit can be purchased at branches, by phone or online.
Citibank offers CDs for 3 months and up to 5 years, each term has its own interest rate. It also offers the option of investing in staggered CDs, with different maturities to optimize savings.
The best CD they market is the 12-month CD with a high yield of 4.05% APY. It can be taken out without an early withdrawal penalty but with a yield of only 0.05% APY.
⏳ Term (months): 12.
💰 Minimum amount: $500 ($1,000 in California and Nevada and 2,500 in Florida, Maryland, Washington, DC and Virginia).
❌ Penalty for early withdrawal: ask for details
🌐 More info at: Citibank CD rates
FAQ 1-year certificates of deposit
What is a 1-year CD?
A 1-year CD is a savings product in which your money will be tied up for 12 months, in exchange the bank gives you a high rate of return.
Generally, you will not be able to access your funds during that period of time (in this case 12 months) without incurring an early withdrawal penalty. In return, you will get a higher return than you would get with a standard savings account or money market account at the time you sign up for that Certificate of Deposit.
Advantages of CDs
- The money you deposit is protected with FDIC insurance, as long as it is within FDIC limits and guidelines.
- At the time you sign up you know exactly how much interest you will earn, since CDs generally have fixed APYs.
- Since there is usually an early withdrawal penalty, that can keep you from withdrawing that money if you don't need to.
Disadvantages of CDs
- They are a safe investment, so you can probably earn more through other investments.
- CDs have early withdrawal penalties. Therefore, if you need this money unexpectedly, you could lose interest, and potentially even some principal.
When is a 1-year CD a good option?
Opening a 1-year CD can be a good move if you have money saved that you're sure you won't need in the next 12 months. Today rates are high and you can get a good amount in interest.
Even though we can take out a CD for more years, it is very possible that we are not comfortable leaving our money for many years, it is more advisable to take out a CD for 12 months and then decide what to do with the money within that period of time.
If you are one of those who sign up for a savings account and the easy access to the money makes you spend it unnecessarily, a good possibility is to sign up for a 1-year CD so that you cannot withdraw the money and see your savings grow.
Español: Mejores certificados de depósito a 1 año