Since last year, the Federal Reserve has continued to raise interest rates in an attempt to lower inflation, hiking the federal funds rate to a range of 4.75% to 5%. While these rate increases have driven mortgage rates to record highs and pushed many into credit card delinquency, there is one silver lining. Rates on savings accounts and CDs have also increased.
A CD, or certificate of deposit, is a type of investment account that holds a fixed amount of money for a fixed term — which can be anywhere from one year to five years. The annual percentage yield (APY) on CD accounts is typically higher than rates for traditional savings accounts, helping you maximize your savings with minimal effort.
Yields on CDs are expected to peak before leveling off later this year. Bankrate (opens in new tab) predicts that by the end of 2023, the national average for one-year CDs will increase to 1.8%.
However, if you look around you'll find many accounts are already offering much higher rates than that. In some cases, we've seen 1-year CDs with yields of more than 5%. Our tool, in partnership with Bankrate, will let you search for a good rate on an account that's right for you.
Why open a CD account?
One of the best reasons to open a CD account is that it’s one of the safest places you can save your cash. This is because most CD accounts are FDIC or NCUA insured. The difference depends on whether you open an account with a bank (overseen by the FDIC (opens in new tab)) or credit union (regulated by NCUA (opens in new tab)). If your bank or credit union is faced with any financial trouble or closes, your deposits will be insured up to $250,000 per account (and up to $250,000 per person in a joint account). You can even use the FDIC BankFind tool (opens in new tab) to check whether a bank is federally insured.
Opening a CD is also a great option if you’re looking for a guaranteed rate of return on your savings. While CDs offer comparatively lower returns compared to higher-risk investment options, like stocks or ETFs, they’re a good choice if you value a fixed, predictable and safe return on your money.
Here are some 1-year CDs with rates 5% and higher
These 1-year CD accounts currently offer some of the best rates on the market, with APYs of at least 5%.
BMO Harris
Term: 13 months
APY: 5.10%
Minimum Deposit: $1,000
CFG Bank
Term: 1 year
APY: 5.10%
Minimum Deposit: $500
Forbright
Term: 1 year
APY: 5.20%
Minimum Deposit: $1,000
State Bank of Texas
Term: 1 year
APY: 5.05%
Minimum Deposit: $100,000
USAlliance Financial
Term: 1 year
APY: 5.00%
Minimum Deposit: $500
Popular Direct
Term: 12 months
APY: 5.00%
Minimum Deposit: $10,000
Live Oak Bank
Term: 12 months
APY: 5.00%
Minimum Deposit: $2,500
CIBC Bank USA
Term: 12 months
APY: 5.02%
Minimum Deposit: $25,000
Bread Financial
Term: 12 months
APY: 5.05%
Minimum Deposit: $1,500
First Internet Bank of Indiana
Term: 12 months
APY: 5.06%
Minimum Deposit: $1,000
Related Content
- FDIC, NCUA and SIPC insurance — What Are the Limits?
- CD Rates Are Rising, Shop Around to Get the Best Returns
- Earn More with a CD Ladder
- The Advantages of Brokered CDs
- Will Savings Rates Go Up in 2023?
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