Our Online-Only 14-Month CD provides a guaranteed rate which allows you to be in control of your savings. Reach your goals with our limited time offer. Saving with peace of mind. With our 10 Month CD, you'll know exactly how much you'll earn over a fixed term. Better rates available for Platinum and Platinum Plus Checking customers. See what the average interest rate was in the US for 3-month, 60-month, 1-year, 3-year and 5-year CDs since 2010 and learn how the economy affects rates. For example, Discover Bank charges six months' worth of interest if you pull out of a 1-year CD early. That penalty increases to 18 months' worth of interest on 5-year CDs. Paying a penalty is never fun, and it can be particularly problematic when you cash out early in the term.
The Certificate of Deposit (CD) Calculator can help determine accumulated interest earnings on CDs over time. Included are considerations for tax and inflation for more accurate results.
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What is a Certificate of Deposit?
A certificate of deposit is an agreement to deposit money for a fixed period that will pay interest. Common term lengths range from three months to five years. The lengthier the term, the higher the exposure to interest rate risk. Generally, the larger the initial deposit, or the longer the investment period, the higher the interest rate. As a type of investment, CDs fall on the low-risk, low-return end of the spectrum. Historically, interest rates of CDs tend to be higher than rates of savings accounts and money markets, but lower than the historical average return rate of equities. There are also different types of CDs with varying rates of interest, or rates linked to indexes of various kinds, but the calculator can only do calculations based on fixed rate CDs.
The gains from CDs are taxable as income in the US unless they are in accounts that are tax-deferred or tax-free, such as an IRA or Roth IRA. For more information about or to do calculations involving a traditional IRA or Roth IRA, please visit the IRA Calculator or Roth IRA Calculator.
CDs are called 'certificates of deposit' because before electronic transfers were invented, buyers of CDs were issued certificates in exchange for their deposits as a way for financial institutions to keep track of buyers of their CDs. Receiving actual certificates for making deposits is no longer practiced today, as transactions are done electronically.
FDIC-Backed
One of the defining characteristics of CDs in the US is that they are protected by the Federal Deposit Insurance Corporation (FDIC). CDs that originate from FDIC-insured banks are insured for up to $250,000, meaning that if banks fail, up to $250,000 of each depositors' funds is guaranteed to be safe. Anyone who wishes to deposit more than the $250,000 limit and wants all of it to be FDIC-insured can simply buy CDs from other FDIC-insured banks. Cricket game win cash app. Due to this insurance, there are few lower risk investments. Similarly, credit unions are covered by insurance from the National Credit Union Administration (NCUA insurance), which provides essentially the same insurance coverage on deposits as the FDIC.
Where and How to Purchase CDs
CDs are typically offered by many financial institutions (including the largest banks) as fixed income investments. Different banks offer different interest rates on CDs, so it is important to first shop around and compare maturity periods of CDs, especially their annual percentage yields (APY). This ultimately determines how much interest is received. The process of buying CDs is straightforward; an initial deposit will be required, along with the desired term. CDs tend to have various minimum deposit requirements. Brokers can also charge fees for CDs purchased through them.
'Buying' a CD is effectively lending money to the seller of the CD. Financial institutions use the funds from sold CDs to re-lend (and profit from the difference), hold in their reserves, spend for their operations, or take care of other miscellaneous expenses. Along with the federal funds rate, all of these factors play a part in determining the interest rates that each financial institution will pay on their CDs.
History of CDs
Although they weren't called CDs then, a financial concept similar to that of a modern CD was first used by European banks in the 1600s. These banks gave a receipt to account holders for the funds they deposited, which they lent to merchants. However, to ensure that account holders did not withdraw their funds while they were lent out, the banks began to pay interest for the use of their money for a designated period of time. This sort of financial transaction is essentially how a modern CD operates.
A major turning point for CDs happened in the early twentieth century after the stock market crash of 1929, which was partly due to unregulated banks that didn't have reserve requirements. In response, the FDIC was established to regulate banks and give investors (such as CD holders) assurance that the government would protect their assets up to a limit.
Historically, rates of CD yields have varied greatly. During the high-inflation years of the late 1970s and 1980s, CDs had return rates of almost 20%. On the other hand, CD rates have dropped to as low as standard savings rates during certain years. CD rates have declined since 1984, a time when they once exceeded 10% APY. In late 2007, just before the economy spiraled downward, they were at 4%. In comparison, the average one-year CD yield is around 0.4% in 2017. In the US, the Federal Reserve, which controls federal funds rate, calibrates them accordingly based on the economic climate.
How to Use CDs
CDs are effective financial instruments when it comes to protecting savings, building short term wealth, and ensuring returns without risk. With these key benefits in mind, it is possible to capitalize on CDs by using them to:
- supplement diversified portfolios to reduce total risk exposure. This can come in handy as retirees get closer to their retirement date and require a more guaranteed return to ensure they have savings in retirement to live off of.
- act as a short term (5 years or less) place to put extra money that isn't needed or isn't required until a set future date. This can come in handy when saving for a down payment for a home or car several years in the future.
- estimate future returns accurately because most CDs have fixed rates. The result of this is a useful investment for people who prefer predictability.
As the maturity date for a CD approaches, CD owners have options of what to do next. In most cases, if nothing is done, after maturity date the funds will likely be reinvested into another similar CD. If not, it is possible for buyers to notify the sellers to transfer the funds into a checking or savings account, or reinvest into a different CD.
Withdrawing from a CD
Funds that are invested in CDs are meant to be tied up for the life of the certificate, and any early withdrawals are normally subject to a penalty (except liquid CDs). The severity of the penalty depends on the length of the CD and the issuing institution. As an aside, in certain rising interest rate environments, it can be financially beneficial to pay the early withdrawal penalty in order to reinvest the proceeds into new higher yielding CDs.
CD Ladder
While longer-term CDs offer higher returns, an obvious drawback to them is that the funds are locked up for longer. A CD ladder is a common strategy employed by investors that attempts to circumvent this drawback by using multiple CDs. Instead of renewing just one CD with a specific amount, the CD is split up into multiple amounts for multiple CDs in a set up that allows them to mature at staggered intervals. For example, instead of investing all funds into a 3-year CD, the funds are used to invest in 3 different CDs at the same time with terms of 1, 2, and 3 years. As one matures, making principal and earnings available, proceeds can be optionally reinvested into a new CD or withdrawal. CD laddering can be beneficial when more flexibility is required, by giving a person access to previously-invested funds at more frequent intervals, or the ability to purchase new CDs at higher rates if interest rates go up.
APY vs APR
It is important to make the distinction between annual percentage yield (APY) and annual percentage rate (APR). Banks tend to use APR for debt-related accounts such as mortgages, credit cards, and car loans, whereas APY is often related to interest-accruing accounts such as CDs and money market investments. APY denotes the amount of interest earned with compound interest accounted for in an entire year, while APR is the annualized representation of monthly interest rate. APY is typically the more accurate representation of effective net gains or losses, and CDs are often advertised in APY rates.
Compounding Frequency
The calculator contains options for different compounding frequencies. As a rule of thumb, the more frequently compounding occurs, the greater the return. To understand the differences between compounding frequencies or to do calculations involving them, please use our Compound Interest Calculator.
Types of CDs
- Traditional CD—Investors receive fixed interest rates over a specified period of time. Money can only be withdrawn without penalty after maturity, and there are also options to roll earnings over for more terms. Traditional CDs that require initial deposits of $100,000 or more are often referred to as 'jumbo' CDs, and usually have higher interest rates.
- Bump-Up CD—Investors are allowed to 'bump up' preexisting interest rates on CDs to match higher current market rates. Bump-up CDs offer the best returns for investors who hold them while interest rates increase. Compared to traditional CDs, these generally receive lower rates.
- Liquid CD—Investors can withdraw from liquid CDs without penalties, but they require maintaining a minimum balance. Interest rates are relatively lower than other types of CDs, but for the most part, still higher than savings accounts or money market investments.
- Zero-Coupon CD—Similar to zero-coupon bonds, these CDs contain no interest payments. Rather, they are reinvested in order to earn more interest. Zero-coupon CDs are bought at fractions of their par values (face value, or amount received at maturity), and generally have longer terms compared to traditional CDs, which can expose investors to considerable risk.
- Callable CD—Issuers that sell callable CDs can possibly recall them from their investors after call-protection periods expire and before they mature, resulting in the return of the initial deposit and any subsequent interest earnings. To make up for this, sellers offer higher rates for these CDs than other types.
- Brokered CD—These are different in that they are sold in brokerage accounts, and not through financial institutions such as banks or credit unions. An advantage to brokered CDs is that there is exposure to a wide variety of CDs instead of just the CDs offered by individual banks.
Alternatives to CDs
- Paying Off Debt—Especially for high-interest debt, paying off existing debt is a great alternative to CDs because it is essentially a guaranteed rate of return, compared to any further investment. Comparatively, even the interest rate of a low rate loan, such as home mortgage, is normally higher than CDs, making it financially rewarding to payoff loan than to collect interest from CD.
- Money Market Accounts—Investors who like the security of a CD and are okay with slightly lower returns can consider money market accounts, which are certain types of FDIC-insured savings accounts that have restrictions such as limits on how funds can be withdrawn. They are generally offered by banks.
- Bonds—Similar to CDs, bonds are relatively low risk financial instruments. Bonds are sold by government (municipal, state, or federal) or corporate entities.
- Peer-to-Peer Lending—Peer-to-peer (P2P) lending is a fairly new form of lending that arose from advances in internet technology that enables lenders and borrowers to link up on an online platform. Peer borrowers request loans through the platform, and lenders can fund the loans they find desirable. Each P2P lending service will come with rules in order to regulate cases of default.
- Bundled Mortgages—Commonly available through mutual funds, bundled mortgages are securities that are traded in a similar manner as bonds, but generally yield more than Treasury securities. Although they received a lot of negative publicity for the role they played in the 2008 financial crisis, mortgage securities have bounced back through more stringent regulations. Bundled mortgages are backed by the Government National Mortgage Association (Ginnie Mae).
The current average interest rate on a savings account is just 0.06%, according to the FDIC. It's no surprise, then, that people often seek another low-risk way to get a larger return on their money. A great alternative to savings accounts is a 1-year certificate of deposit (CD). A CD is much like a savings account, except you lock your money into this account for a minimum of 1 year. After the 12 months is over you can withdraw your money and the interest or roll it over into another year.
Advertiser Disclosure |8 Best 1-Year CD Interest Rates for September 2020
Rates data as of 8/26/2020
Is now a good time to save?
Certificates of deposit, or CDs, are a savings deposit that assures your money will grow and gain interest. Due to the Federal Reserve rate cuts in March 2020, many banks dropped the rates they're offering on their CD products. Credit unions and online banks still yield the best bang for the savings buck.
The average interest rate right now is 0.42% for a 1-year CD. A 5-year CD averages 0.60%. Depositing your money in a bank for a fixed period means you will receive a fixed interest rate. While the rate you earn won't be as high as it has been at some points in recent history, it's still a good time to help your money grow via that earned interest.
The rate offered on CDs is often higher than the interest earned on most savings accounts, and that includes high-yield savings accounts. It's a good way to save and earn if you can stow away that money for one year — provided you won't need access to that money right now.
Ally – 0.75% APY
Ally's 12-month high-yield CD not only offers a competitive interest rate, but it comes with the company's 'Ten Day Best Rate Guarantee,' which states as long as you fund your CD within the first ten days of opening your account, you're guaranteed to be given the best 12-month CD rate Ally offers for your term and balance tier, even if it goes up. You'll also be given compounding interest on your balance, and the account doesn't come with any pesky monthly maintenance fees.
Barclays – 0.40% APY
Beginning investors, or those who don't have a ton of money to store away, may be interested inBarclays CDs — specifically its online options. Their 1-year CD option comes with a healthy annual percentage yield and there is no minimum amount required to open the account, which means that you're free to put away as much or as little as you wish. In addition, though the CD itself only lasts for one year, Barclays also offers a ladder option, which allows you to free up or choose to reinvest your earnings as the CD matures.
Capital One – 0.50% APY
Though the annual percentage yield isn't as high forCapital One's 1-year CD, it's worth noting that this choice offers more flexibility than some of the other best 12-month CD rates that are currently on the market. With Capital One, you can choose how you want your interest to be paid out, whether it's at the end of the term, on a monthly basis or annually. You can also rest easy knowing that all of Capital One's CDs are FDIC-insured up to the allowable limit of $250,000.
Charles Schwab – 0.15% APY
Charles Schwab does its CDs a little bit differently than most of the other financial institutions on the market. Rather than offering CDs in year-long installments, they offer the flexibility to go month-to-month. Though we're talking about the best 12-month CD rates, it's worth noting that you have the option to renew your CD for anywhere from one month to 20 years. That said, Charles Schwab accounts do come with a minimum balance requirement of $1,000.
Discover – 0.80% APY
A big selling point behind Discover's product is not only it'scompetitive 12-month CD rate, but also the amount of transparency that the company has online. Not only does Discover's online presence list the benefits of opening an account with Discover — such as not having any monthly maintenance fees or having a calculator that lets you see exactly how much interest your deposit will earn over the term of the CD — but it also shows you the potential downsides of opening the account. For example, its website lists how much interest you'll be charged if you withdraw from your account early, allowing you to make a fully informed decision about where to put your money.
Marcus – 0.85% APY
Marcus by Goldman Sachs CD's minimum amount required to open an account is lower than the usual. Its 1-year CD minimum deposit is just $500, which is roughly half as much as some of the other high-yield CD options on this list. CDs through Marcus by Goldman Sachs are only available online (as of writing), which could be a drawback for some who prefer a more hands-on approach to their money. Marcus by Goldman Sachs does offer a 10-day CD rate guarantee, an online calculator to see how much you'll earn, and a US-based customer service center that is open every day.
Synchrony – 0.75% APY
Synchrony Bank has CDs available for a minimum deposit of $2,000, which is much higher than the usual minimum deposit, sometimes as low as $500. However, Synchrony does have a 15-day best rate guarantee and an online calculator. At Synchrony, you might fare better with a high-yield savings account where you'll earn 1.05% APY and have no minimum balance.
TIAA Bank – 0.60% APY
Real cash earning app login. Requiring a $5,000 deposit in order to open the account definitely guarantees TIAA bank the award for the highest minimum deposit requirement on the list. However, if you have the funds, it may be worth the investment.TIAA Bank Play game get real money. offers a few features that set it apart from its competitors, including a 20-day maturity alert, which will give you enough time to plan to free up your funds, if needed. Plus, CD accounts with TIAA are IRA-eligible.
Compare the 8 Best 1-Year CD Rates for September 2020
- Ally: 0.75% APY, $0 minimum deposit
- Barclays: 0.40% APY, $0 minimum deposit
- Capital One: 0.50% APY, $0 minimum deposit
- Charles Schwab: 0.15% APY, $1,000 minimum deposit
- Discover: 0.80% APY, $2,500 minimum deposit
- Marcus: 0.85% APY, $500 minimum deposit
- Synchrony: 0.75% APY, $2,000 minimum deposit
- TIAA Bank: 0.60% APY, $5,000 minimum deposit
What is a 1-Year CD?
A 1-year CD is simply a short-term certificate of deposit. Like other CDs, this financial product promises to provide investors with higher-than-normal interest rates, provided that they keep the money in the CD for its entire term.
This 12-month CD investment could be useful if you have a lump-sum of cash that you won't need to access for at least a year, such as a work bonus or a cash gift. While certificates of deposits can offer a great return on investment, you'll likely be subject to penalties if you decide to pull the money out before the term of the CD is over. You can use our CD interest rate calculator to see how much interest you'll earn over the course of a year or longer.
1 Year Cd Calculator
CDs vs. Other Accounts
1-Year CDs vs Savings Accounts
1 Year Cd Usaa
Put simply, the rates savings accounts offer are not usually as high as what you might find with a CD or when compared to a 1-year CD. However, in return for those lower rates in traditional savings accounts, you do get some added flexibility. While there may be limits on how many withdrawals you can make per month, there are no penalties for withdrawing your money from a savings account. This may be a better option if you're worried that you may have to pull money out at a certain point in time.
1 Year Cd Chase
1-Year CDs vs Money Market Accounts
Money market accounts (MMAs) are similar to savings accounts in that, while there are limits on the amount of withdrawals you can make per month, as long as you stay within those limits, there are no penalties for accessing your money. Money market accounts also usually have a marginally higher yield than high-yield savings accounts. Plus, some accounts come with the ability to write checks or access your money via a debit card. However, their minimum balances tend to be slightly higher as well, and MMA holders may see penalties or fees for falling below those minimum balances.
1-Year CDs vs 3-Year CDs
The decision between a 1-year versus a 3-year CD boils down to how long you have to put your money away. A 3-year CD will offer better earnings, and usually, a higher interest rate. The longer you can put your money away, the higher the interest rate will be. You'll get a good return upon maturity of the CD.
The Impact of 0.1% Change on $1,000
When you're comparing rates between CDs and savings accounts, you may notice that CD rates only promise a marginally higher percentage than a traditional or high-yield savings account. You're left wondering if locking your money in a CD is really worth it. Believe it or not, even a 0.1% increase in APY rate could have a noticeable impact over the term of your CD. Let's say you have a 12-month CD worth $1,000 that garners 2.4% APY. In the first year, the value of your CD will increase to $1,024. Now imagine you were able to get a 12-month CD rate of 2.5% APY. At the end of the year, your CD will be worth $1,025. That's not that great of a difference, but if you have a CD worth several thousand dollars, you can begin to imagine how quickly a few extra percentage points can add up to real cash — especially if you renew the CD.
The final word
Investing your money in a 1-year CD is a good option if you can lock away that money for the duration of the CD. It's an excellent low-risk way to save and earn, but you'll lose some or all of the interest you earn if you withdraw the money you deposited before the CD matures.
1 Year Cd Bank Of America
History of CDs
Although they weren't called CDs then, a financial concept similar to that of a modern CD was first used by European banks in the 1600s. These banks gave a receipt to account holders for the funds they deposited, which they lent to merchants. However, to ensure that account holders did not withdraw their funds while they were lent out, the banks began to pay interest for the use of their money for a designated period of time. This sort of financial transaction is essentially how a modern CD operates.
A major turning point for CDs happened in the early twentieth century after the stock market crash of 1929, which was partly due to unregulated banks that didn't have reserve requirements. In response, the FDIC was established to regulate banks and give investors (such as CD holders) assurance that the government would protect their assets up to a limit.
Historically, rates of CD yields have varied greatly. During the high-inflation years of the late 1970s and 1980s, CDs had return rates of almost 20%. On the other hand, CD rates have dropped to as low as standard savings rates during certain years. CD rates have declined since 1984, a time when they once exceeded 10% APY. In late 2007, just before the economy spiraled downward, they were at 4%. In comparison, the average one-year CD yield is around 0.4% in 2017. In the US, the Federal Reserve, which controls federal funds rate, calibrates them accordingly based on the economic climate.
How to Use CDs
CDs are effective financial instruments when it comes to protecting savings, building short term wealth, and ensuring returns without risk. With these key benefits in mind, it is possible to capitalize on CDs by using them to:
- supplement diversified portfolios to reduce total risk exposure. This can come in handy as retirees get closer to their retirement date and require a more guaranteed return to ensure they have savings in retirement to live off of.
- act as a short term (5 years or less) place to put extra money that isn't needed or isn't required until a set future date. This can come in handy when saving for a down payment for a home or car several years in the future.
- estimate future returns accurately because most CDs have fixed rates. The result of this is a useful investment for people who prefer predictability.
As the maturity date for a CD approaches, CD owners have options of what to do next. In most cases, if nothing is done, after maturity date the funds will likely be reinvested into another similar CD. If not, it is possible for buyers to notify the sellers to transfer the funds into a checking or savings account, or reinvest into a different CD.
Withdrawing from a CD
Funds that are invested in CDs are meant to be tied up for the life of the certificate, and any early withdrawals are normally subject to a penalty (except liquid CDs). The severity of the penalty depends on the length of the CD and the issuing institution. As an aside, in certain rising interest rate environments, it can be financially beneficial to pay the early withdrawal penalty in order to reinvest the proceeds into new higher yielding CDs.
CD Ladder
While longer-term CDs offer higher returns, an obvious drawback to them is that the funds are locked up for longer. A CD ladder is a common strategy employed by investors that attempts to circumvent this drawback by using multiple CDs. Instead of renewing just one CD with a specific amount, the CD is split up into multiple amounts for multiple CDs in a set up that allows them to mature at staggered intervals. For example, instead of investing all funds into a 3-year CD, the funds are used to invest in 3 different CDs at the same time with terms of 1, 2, and 3 years. As one matures, making principal and earnings available, proceeds can be optionally reinvested into a new CD or withdrawal. CD laddering can be beneficial when more flexibility is required, by giving a person access to previously-invested funds at more frequent intervals, or the ability to purchase new CDs at higher rates if interest rates go up.
APY vs APR
It is important to make the distinction between annual percentage yield (APY) and annual percentage rate (APR). Banks tend to use APR for debt-related accounts such as mortgages, credit cards, and car loans, whereas APY is often related to interest-accruing accounts such as CDs and money market investments. APY denotes the amount of interest earned with compound interest accounted for in an entire year, while APR is the annualized representation of monthly interest rate. APY is typically the more accurate representation of effective net gains or losses, and CDs are often advertised in APY rates.
Compounding Frequency
The calculator contains options for different compounding frequencies. As a rule of thumb, the more frequently compounding occurs, the greater the return. To understand the differences between compounding frequencies or to do calculations involving them, please use our Compound Interest Calculator.
Types of CDs
- Traditional CD—Investors receive fixed interest rates over a specified period of time. Money can only be withdrawn without penalty after maturity, and there are also options to roll earnings over for more terms. Traditional CDs that require initial deposits of $100,000 or more are often referred to as 'jumbo' CDs, and usually have higher interest rates.
- Bump-Up CD—Investors are allowed to 'bump up' preexisting interest rates on CDs to match higher current market rates. Bump-up CDs offer the best returns for investors who hold them while interest rates increase. Compared to traditional CDs, these generally receive lower rates.
- Liquid CD—Investors can withdraw from liquid CDs without penalties, but they require maintaining a minimum balance. Interest rates are relatively lower than other types of CDs, but for the most part, still higher than savings accounts or money market investments.
- Zero-Coupon CD—Similar to zero-coupon bonds, these CDs contain no interest payments. Rather, they are reinvested in order to earn more interest. Zero-coupon CDs are bought at fractions of their par values (face value, or amount received at maturity), and generally have longer terms compared to traditional CDs, which can expose investors to considerable risk.
- Callable CD—Issuers that sell callable CDs can possibly recall them from their investors after call-protection periods expire and before they mature, resulting in the return of the initial deposit and any subsequent interest earnings. To make up for this, sellers offer higher rates for these CDs than other types.
- Brokered CD—These are different in that they are sold in brokerage accounts, and not through financial institutions such as banks or credit unions. An advantage to brokered CDs is that there is exposure to a wide variety of CDs instead of just the CDs offered by individual banks.
Alternatives to CDs
- Paying Off Debt—Especially for high-interest debt, paying off existing debt is a great alternative to CDs because it is essentially a guaranteed rate of return, compared to any further investment. Comparatively, even the interest rate of a low rate loan, such as home mortgage, is normally higher than CDs, making it financially rewarding to payoff loan than to collect interest from CD.
- Money Market Accounts—Investors who like the security of a CD and are okay with slightly lower returns can consider money market accounts, which are certain types of FDIC-insured savings accounts that have restrictions such as limits on how funds can be withdrawn. They are generally offered by banks.
- Bonds—Similar to CDs, bonds are relatively low risk financial instruments. Bonds are sold by government (municipal, state, or federal) or corporate entities.
- Peer-to-Peer Lending—Peer-to-peer (P2P) lending is a fairly new form of lending that arose from advances in internet technology that enables lenders and borrowers to link up on an online platform. Peer borrowers request loans through the platform, and lenders can fund the loans they find desirable. Each P2P lending service will come with rules in order to regulate cases of default.
- Bundled Mortgages—Commonly available through mutual funds, bundled mortgages are securities that are traded in a similar manner as bonds, but generally yield more than Treasury securities. Although they received a lot of negative publicity for the role they played in the 2008 financial crisis, mortgage securities have bounced back through more stringent regulations. Bundled mortgages are backed by the Government National Mortgage Association (Ginnie Mae).
The current average interest rate on a savings account is just 0.06%, according to the FDIC. It's no surprise, then, that people often seek another low-risk way to get a larger return on their money. A great alternative to savings accounts is a 1-year certificate of deposit (CD). A CD is much like a savings account, except you lock your money into this account for a minimum of 1 year. After the 12 months is over you can withdraw your money and the interest or roll it over into another year.
Advertiser Disclosure |8 Best 1-Year CD Interest Rates for September 2020
Rates data as of 8/26/2020
Is now a good time to save?
Certificates of deposit, or CDs, are a savings deposit that assures your money will grow and gain interest. Due to the Federal Reserve rate cuts in March 2020, many banks dropped the rates they're offering on their CD products. Credit unions and online banks still yield the best bang for the savings buck.
The average interest rate right now is 0.42% for a 1-year CD. A 5-year CD averages 0.60%. Depositing your money in a bank for a fixed period means you will receive a fixed interest rate. While the rate you earn won't be as high as it has been at some points in recent history, it's still a good time to help your money grow via that earned interest.
The rate offered on CDs is often higher than the interest earned on most savings accounts, and that includes high-yield savings accounts. It's a good way to save and earn if you can stow away that money for one year — provided you won't need access to that money right now.
Ally – 0.75% APY
Ally's 12-month high-yield CD not only offers a competitive interest rate, but it comes with the company's 'Ten Day Best Rate Guarantee,' which states as long as you fund your CD within the first ten days of opening your account, you're guaranteed to be given the best 12-month CD rate Ally offers for your term and balance tier, even if it goes up. You'll also be given compounding interest on your balance, and the account doesn't come with any pesky monthly maintenance fees.
Barclays – 0.40% APY
Beginning investors, or those who don't have a ton of money to store away, may be interested inBarclays CDs — specifically its online options. Their 1-year CD option comes with a healthy annual percentage yield and there is no minimum amount required to open the account, which means that you're free to put away as much or as little as you wish. In addition, though the CD itself only lasts for one year, Barclays also offers a ladder option, which allows you to free up or choose to reinvest your earnings as the CD matures.
Capital One – 0.50% APY
Though the annual percentage yield isn't as high forCapital One's 1-year CD, it's worth noting that this choice offers more flexibility than some of the other best 12-month CD rates that are currently on the market. With Capital One, you can choose how you want your interest to be paid out, whether it's at the end of the term, on a monthly basis or annually. You can also rest easy knowing that all of Capital One's CDs are FDIC-insured up to the allowable limit of $250,000.
Charles Schwab – 0.15% APY
Charles Schwab does its CDs a little bit differently than most of the other financial institutions on the market. Rather than offering CDs in year-long installments, they offer the flexibility to go month-to-month. Though we're talking about the best 12-month CD rates, it's worth noting that you have the option to renew your CD for anywhere from one month to 20 years. That said, Charles Schwab accounts do come with a minimum balance requirement of $1,000.
Discover – 0.80% APY
A big selling point behind Discover's product is not only it'scompetitive 12-month CD rate, but also the amount of transparency that the company has online. Not only does Discover's online presence list the benefits of opening an account with Discover — such as not having any monthly maintenance fees or having a calculator that lets you see exactly how much interest your deposit will earn over the term of the CD — but it also shows you the potential downsides of opening the account. For example, its website lists how much interest you'll be charged if you withdraw from your account early, allowing you to make a fully informed decision about where to put your money.
Marcus – 0.85% APY
Marcus by Goldman Sachs CD's minimum amount required to open an account is lower than the usual. Its 1-year CD minimum deposit is just $500, which is roughly half as much as some of the other high-yield CD options on this list. CDs through Marcus by Goldman Sachs are only available online (as of writing), which could be a drawback for some who prefer a more hands-on approach to their money. Marcus by Goldman Sachs does offer a 10-day CD rate guarantee, an online calculator to see how much you'll earn, and a US-based customer service center that is open every day.
Synchrony – 0.75% APY
Synchrony Bank has CDs available for a minimum deposit of $2,000, which is much higher than the usual minimum deposit, sometimes as low as $500. However, Synchrony does have a 15-day best rate guarantee and an online calculator. At Synchrony, you might fare better with a high-yield savings account where you'll earn 1.05% APY and have no minimum balance.
TIAA Bank – 0.60% APY
Real cash earning app login. Requiring a $5,000 deposit in order to open the account definitely guarantees TIAA bank the award for the highest minimum deposit requirement on the list. However, if you have the funds, it may be worth the investment.TIAA Bank Play game get real money. offers a few features that set it apart from its competitors, including a 20-day maturity alert, which will give you enough time to plan to free up your funds, if needed. Plus, CD accounts with TIAA are IRA-eligible.
Compare the 8 Best 1-Year CD Rates for September 2020
- Ally: 0.75% APY, $0 minimum deposit
- Barclays: 0.40% APY, $0 minimum deposit
- Capital One: 0.50% APY, $0 minimum deposit
- Charles Schwab: 0.15% APY, $1,000 minimum deposit
- Discover: 0.80% APY, $2,500 minimum deposit
- Marcus: 0.85% APY, $500 minimum deposit
- Synchrony: 0.75% APY, $2,000 minimum deposit
- TIAA Bank: 0.60% APY, $5,000 minimum deposit
What is a 1-Year CD?
A 1-year CD is simply a short-term certificate of deposit. Like other CDs, this financial product promises to provide investors with higher-than-normal interest rates, provided that they keep the money in the CD for its entire term.
This 12-month CD investment could be useful if you have a lump-sum of cash that you won't need to access for at least a year, such as a work bonus or a cash gift. While certificates of deposits can offer a great return on investment, you'll likely be subject to penalties if you decide to pull the money out before the term of the CD is over. You can use our CD interest rate calculator to see how much interest you'll earn over the course of a year or longer.
1 Year Cd Calculator
CDs vs. Other Accounts
1-Year CDs vs Savings Accounts
1 Year Cd Usaa
Put simply, the rates savings accounts offer are not usually as high as what you might find with a CD or when compared to a 1-year CD. However, in return for those lower rates in traditional savings accounts, you do get some added flexibility. While there may be limits on how many withdrawals you can make per month, there are no penalties for withdrawing your money from a savings account. This may be a better option if you're worried that you may have to pull money out at a certain point in time.
1 Year Cd Chase
1-Year CDs vs Money Market Accounts
Money market accounts (MMAs) are similar to savings accounts in that, while there are limits on the amount of withdrawals you can make per month, as long as you stay within those limits, there are no penalties for accessing your money. Money market accounts also usually have a marginally higher yield than high-yield savings accounts. Plus, some accounts come with the ability to write checks or access your money via a debit card. However, their minimum balances tend to be slightly higher as well, and MMA holders may see penalties or fees for falling below those minimum balances.
1-Year CDs vs 3-Year CDs
The decision between a 1-year versus a 3-year CD boils down to how long you have to put your money away. A 3-year CD will offer better earnings, and usually, a higher interest rate. The longer you can put your money away, the higher the interest rate will be. You'll get a good return upon maturity of the CD.
The Impact of 0.1% Change on $1,000
When you're comparing rates between CDs and savings accounts, you may notice that CD rates only promise a marginally higher percentage than a traditional or high-yield savings account. You're left wondering if locking your money in a CD is really worth it. Believe it or not, even a 0.1% increase in APY rate could have a noticeable impact over the term of your CD. Let's say you have a 12-month CD worth $1,000 that garners 2.4% APY. In the first year, the value of your CD will increase to $1,024. Now imagine you were able to get a 12-month CD rate of 2.5% APY. At the end of the year, your CD will be worth $1,025. That's not that great of a difference, but if you have a CD worth several thousand dollars, you can begin to imagine how quickly a few extra percentage points can add up to real cash — especially if you renew the CD.
The final word
Investing your money in a 1-year CD is a good option if you can lock away that money for the duration of the CD. It's an excellent low-risk way to save and earn, but you'll lose some or all of the interest you earn if you withdraw the money you deposited before the CD matures.
1 Year Cd Bank Of America
You can choose the best CD option for you based on the minimum deposit, interest rate, fees and whether the bank offers a 10-day rate guarantee. The best 1-year CDs have better interest rates than traditional savings accounts, and since CD rates are fixed, you can learn exactly how much you will get in return when the CD matures.
