Best 1-Year CD Rates for June 2025

Single Sparkle

Updated: 24 Jun, 2025 • 0 • min read

Table of Contents

Key takeaways

The best one-year CD rates are currently competitive with longer-term CD rates.
Short-term CDs can capture higher-than-average yields while providing flexibility to roll over into a more favorable CD after a year if rates rise.
Pay attention to early withdrawal penalties and minimum deposits in addition to annual percentage yield (APY).

For savers looking for yield, one-year CDs now offer the highest average rates available for deposit accounts, at 1.75%, according to the Federal Deposit Insurance Corporation (FDIC).

If you’re willing to keep your money in the bank for 12 months, you could potentially maximize what you earn on your cash.

Best 1-year CD rates

The national average for one-year CD rates is 1.75% according to the FDIC, but it’s possible to find higher yields when comparing short-term rates across online and brick-and-mortar banks and credit unions. DepositAccounts.com, which tracks thousands of rates from institutions nationwide, reports that the average rate for the top-yielding 1% of CDs is 4.70%, as of June 6, 2025.

Here are some of the best short-term CD rates:

America First Credit Union: 4.35% ($500 minimum deposit)
First National Bank of America: 4.06% ($1,000 minimum deposit)
Alliant Credit Union: 4.00% ($1,000 minimum deposit)
Oxford Federal Credit Union: 4.00% ($1,000 minimum deposit)
Pittsford Federal Credit Union: 4.00% ($50 minimum deposit)

You might be able to find one-year CDs with higher yields, but they often require higher minimum deposits or might have other restrictions. For example, some of the best credit union CD rates are higher, but you might not meet membership criteria.

What is a 1-year CD?

Certificates of deposit have various maturities, ranging from a few months to several years. A one-year (12-month) CD is a deposit account that pays an attractive interest rate when you agree to keep your money in the account for a year.

How a 1-year CD works

When you open a one-year CD, you agree to leave your money in the account until it matures in 12 months. The bank or credit union pays interest on your money, which is deposited into your CD account.

Yields on one-year CDs are often higher than those in a savings or money market account because the financial institution can reasonably rely on you leaving the money in the account, which becomes available for other purposes, such as making loans to others.

Interest rates and compounding frequency

Review the APY and compounding frequency when comparing the best short-term CD rates. The interest rate listed for the account is different from the annual percentage yield. The APY includes compounding interest, which provides a better picture of your earnings throughout the year.

Compounding frequency makes a difference as well. Compounding represents how often the accumulated interest is added to your account. The more frequent the compounding, the higher the APY — and the more you earn.

For example, $10,000 in a one-year CD with a 4.31% interest rate compounded monthly earns $439.62 in interest for an APY of 4.396%. That same CD with daily compounding results in $440.40 in interest and an APY of 4.404%. The more you have in the CD, the bigger the impact of compounding frequency.

Early withdrawal penalties

If you withdraw money from your CD account before the end of the 12-month maturity, you often pay a penalty. Penalties are usually expressed as months’ worth of interest. For example, your penalty might be three months’ worth of interest if you remove your money ahead of the end of the CD term.

In the above example, with daily compounding, three months’ worth of interest is $108.33.

Some financial institutions offer no-penalty CDs, which allow withdrawals before maturity. However, no-penalty CDs might have lower APYs than CDs that charge penalties, so you won’t earn as much interest.

How to find the best 1-year CD rate

Compare offerings from several financial institutions to find an account that works for you. While APY is important, other considerations will impact where you should open your CD.

Key factors that impact CD rates

Market conditions often influence CD rates. One of the most important factors is the federal-funds rate. When the Federal Reserve changes its benchmark rate, other rates often follow suit.

Financial institutions also set rates based on their business goals. Banks and credit unions try to create a profitable spread between the yield they pay depositors and the interest rate they charge borrowers.

How online banks compare to traditional banks

Online banks sometimes offer higher rates than traditional banks. By looking online, you might be able to find higher rates than you would at a brick-and-mortar branch of a major bank.

However, some credit unions and community banks might offer competitive rates on one-year CDs.

Minimum deposit requirements

Review minimum deposit requirements. While it’s possible to find CDs with relatively low minimums, like $500 or $1,000, some institutions require as much as $5,000 or more. Depending on the bank or credit union, the highest APY might only be available if you meet a minimum threshold.

Pay attention to the minimum required to earn the APY. Some institutions might have lower APYs, but allow you to earn an above-average yield on a lower balance.

Pros and cons of a 1-year CD

How to open a 1-year CD

If you decide a one-year CD fits with your financial goals, you can open an account online or in a branch.

Steps to apply online or in person

Compare short-term CD rates and features: Research financial institutions offering one-year CDs. Look at APY, as well as account management features and whether you need to open an account online or in person.
Gather documentation: Make sure you have the necessary documents on hand before you start the application process.
Fill out the application: Complete the required fields and provide the required documentation. You often need to provide your name, address, phone number and birth date.
Provide funds: Be prepared with your routing and account numbers to transfer funds into your new CD account. If you open an account in person, you might be able to use a check or cash.

Documentation and requirements

Many banks and credit unions verify your identity by using your Social Security number and state-issued identification, such as a driver’s license. Gathering this information ahead of time can help you complete your application faster.

Find out if there are other requirements ahead of time, such as a minimum opening deposit. If you’re opening a CD account with a credit union, review the membership requirements. Some credit unions have strict employer and geographic area criteria, while others make it easy for almost anyone to join.

When to renew or roll over a CD

Once your one-year CD expires, you need to decide whether you want to renew the CD. If you don’t need the money immediately, and you want to continue earning the yield, it might make sense to renew for another term. Another option is to keep some of the money out and add it to a more traditional emergency fund while opening another one-year CD with the remaining funds.

If your one-year CD is part of a ladder, you might decide to renew your CD for a longer term, such as a five-year term, to keep the ladder intact.

On the other hand, if you think rates will rise in the coming months, you might decide to open a CD with a shorter term, such as six months, and take advantage of rising interest rates without waiting a full year.

Methodology

Buy Side by WSJ reviewed fixed-rate CDs using DepositAccounts.com and CDValet.com, which track hundreds of thousands of rates at banks and credit unions nationwide. The team at Buy Side from WSJ also performed research and verified the rates and terms based on information found on bank and credit union websites. The information provided is accurate as of the date line.

Certificates of deposit are available at national banks, local and regional banks, credit unions and online banks. For this list, credit unions with hyperlocal eligibility requirements were excluded. CD accounts with required minimum deposits above $5,000 were also excluded.

FAQ

What is the highest 1-year CD rate available now?

The highest one-year CD rate depends on factors like current conditions and the amount of money in the account. Some of the highest rates available on one-year CDs are above 4.50%, while the average for the top-yielding 1% of CDs is currently 4.70% APY.

Can I withdraw my money early from a 1-year CD?

You can generally withdraw your money early from a one-year CD, but you usually pay a penalty.

Are 1-year CDs better than savings accounts?

One-year CDs generally offer a higher yield than many savings accounts, but they might not be better for helping you reach your financial goals. One-year CDs are less liquid than savings accounts, so if you think you might need to access your money sooner, it can make sense to choose a savings account instead.

How often do 1-year CD rates change?

CD rates change based on market conditions and Federal Reserve rate decisions. However, if you already have a one-year CD, the rate doesn’t usually change for the duration of the term, unless you have a specialty CD.

Are 1-year CDs FDIC-insured?

As long as your CD is at an insured institution, it should be FDIC-insured like other cash deposit accounts. The National Credit Union Administration (NCUA) protects deposits at federally insured credit unions, so if you choose a CD offered by a credit union, check that it’s a member.