If you’re seeking a safe, low-risk way to grow your savings without exposing your principal to market volatility, a 1-year certificate of deposit (CD) remains one of the most compelling options in today’s financial landscape. With federal insurance (up to $250,000 per depositor, per institution, through the FDIC or NCUA for credit unions), 1-year CDs provide predictable returns, making them ideal for savers with near-term financial goals.
Current CD Rate Environment
As of August 2026, interest rates for short-term CDs have remained attractive amid a stable but slightly declining federal funds rate environment. While the Federal Reserve has signaled a potential pause or modest rate cuts later in the year, many banks and credit unions continue to offer competitive yields to attract deposits amid strong loan demand and evolving liquidity management strategies.
The national average 1-year CD rate currently stands at approximately 1.55% APY, according to industry surveys. However, leading online institutions and regional banks are significantly outpacing this benchmark, with top-tier offerings reaching 4.1% APY—more than double the national average.
Top 10 Best 1-Year CD Accounts for August 2026
Our team reviewed over 300 federally insured 1-year CD accounts to identify the best combinations of yield, accessibility, and customer experience. Here are the top performers:
- Ally Bank — APY: 3.7%, Minimum Deposit: $0, Daily Compounding
- Synchrony Bank — APY: 4%, Minimum Deposit: $0, Daily Compounding
- Marcus by Goldman Sachs — APY: 3.9%, Minimum Deposit: $500, Daily Compounding
- America First Credit Union — APY: 3.95%, Minimum Deposit: $500, Monthly Compounding
- Capital One — APY: 4%, Minimum Deposit: $0, Daily Compounding
- Live Oak Bank — APY: 4.1%, Minimum Deposit: $2,500, Daily Compounding
- Bask Bank — APY: 4.1%, Minimum Deposit: $1,000, Daily Compounding
- TAB Bank — APY: 4%, Minimum Deposit: $1,000, Daily Compounding
- Quontic Bank — APY: 3.5%, Minimum Deposit: $500, Daily Compounding, Monthly Crediting
- American Express National Bank — APY: 3.25%, Minimum Deposit: $0, Daily Compounding
Each of these institutions offers FDIC or NCUA insurance, ensuring the safety of your principal up to the legal limits. Key differentiators include no-fee structures, flexible early withdrawal options, and digital account management capabilities.
Calculating Your Potential Earnings
Let’s examine how your savings could grow over 12 months depending on the APY:
- $10,000 at 1.55% APY → ~$156 in interest
- $10,000 at 4.0% APY → ~$408 in interest
- $100,000 at 4.1% APY → ~$4,081 in interest
These projections assume compound interest (where applicable) and holding the CD to maturity. Early withdrawals typically trigger penalties equal to 60–270 days of interest, depending on the institution.
How to Choose the Right 1-Year CD
When comparing 1-year CDs, prioritize these factors:
- APY over nominal rate: Annual Percentage Yield accounts for compounding frequency, giving you a true return metric.
- Minimum deposit: Online-only banks often waive minimums entirely, making CDs accessible to all savers.
- Compounding frequency: Daily compounding yields slightly more than monthly or quarterly over time.
- Early withdrawal terms — evaluate whether the penalty structure aligns with your liquidity needs.
FAQs
What is the highest 1-year CD rate available today?
The current highest 1-year CD rate is 4.1% APY, offered by both Live Oak Bank and Bask Bank, though they require minimum deposits of $2,500 and $1,000, respectively.
Are CDs insured by the government?
Yes. CDs issued by banks are insured by the Federal Deposit Insurance Corporation (FDIC), while credit union CDs are insured by the National Credit Union Administration (NCUA). Coverage is up to $250,000 per depositor, per institution.
Is it better to choose a 6-month or 1-year CD?
It depends on your liquidity needs and rate outlook. A 6-month CD offers more flexibility if you expect rates to drop soon, allowing you to reinvest at potentially higher rates later. A 1-year CD typically offers a higher yield and locks in your return for the full term. For savers with funds they can commit for 12 months, the 1-year term often provides the best balance of yield and predictability.
