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A CD ladder strategy is a way of managing your CD portfolio so that instead of depositing funds in just one CD, funds are spread out in several CDs of different terms, such as from one to five years. With this strategy, you can benefit from more frequent access to your funds while still taking advantage of the often-better rates that accompany. These are the rates for 5-year CDs with a rate bump. Account: Term: APY: Minimum deposit to earn APY: TD Choice Rate Bump CD: 5 years: 0.05%: $250-$9,999.99: TD Choice Rate Bump CD: 5 years: 0.05%.

The best CD rates, or APYs (annual percentage yields), are often higher than the best savings account interest rates, though they vary by term length - longer terms usually bring the highest CD. US 1-Year CD Rate is at 0.14%, compared to 0.15% last week and 0.48% last year. This is lower than the long term average of 0.38%.

Yields generally aren’t as high as they were almost a year ago, but it’s still possible to find a competitive interest rate. One way to do that is to shop around and look at the yields tied to the share certificates offered by credit unions.

The average 1-year CD yield was 0.20 percent annual percentage yields (APY), according to Bankrate's weekly survey of institutions on Feb. 24, 2021.

Pros and cons of credit union CDs

Brick-and-mortar banks can be pretty stingy when it comes to paying out interest to customers with savings accounts. In many cases, their CD rates aren't impressive either.

Credit unions are member-owned institutions. That means they're always looking out for their customers. It's not hard to find a credit union offering competitive rates tied to CDs (or, as credit unions often call them, “share certificates”).

The drawback? You may not have access to a credit union share certificate if you cannot qualify for membership. While there are many credit unions that are easy to join, there are still institutions that have restrictions based on where you live or work, or the group you’re affiliated with.

Even if you can become a credit union member and apply for a share certificate, you may forget about this account if you have multiple accounts at different banks or you have no other ties to the credit union. If you’re not careful, your CD could automatically renew, forcing you to keep money locked up for a longer period of time than anticipated. That could cause problems if you need money you’ve saved to cover an emergency or make an important purchase.

Here are some credit unions offering today’s best widely available 1-year CD rates.

Best 1-year credit union CD rates - February 2021

• Delta Community Credit Union: 0.80% APY, $1,000 minimum deposit
• Navy Federal Credit Union: 0.55% APY, $1,000 minimum deposit
• Golden 1 Credit Union: 0.50% APY, $500 minimum deposit
• Alliant Credit Union: 0.50% APY, $1,000 minimum deposit
• SchoolsFirst Federal Credit Union: 0.50% APY, $20,000 minimum deposit for this APY
• Bethpage Federal Credit Union: 0.45% APY, $50 minimum deposit
• VyStar Credit Union: 0.45% APY, $500 minimum deposit
• Pentagon Federal Credit Union: 0.45% APY, $1,000 minimum deposit
• Randolph-Brooks Federal Credit Union: 0.45% APY, $1,000 minimum deposit

Note: The APYs (Annual Percentage Yields) shown are as of Feb. 26, 2021. Bankrate's editorial team updates this information regularly, typically biweekly. APYs may have changed since they were last updated.

Delta Community Credit Union: 0.80% APY, $1,000 minimum deposit

Delta Community Credit Union began as the Delta Employees Credit Union in 1940. It was started by eight Delta Air Lines employees. Delta Community Credit Union has more than 430,000 members and has 29 branches in metro Atlanta and three branches outside of Georgia.

• What it pays: 0.80 percent APY
• Membership restrictions: Anyone living or working in metro Atlanta and employees of more than 150 businesses are welcome at Delta Community Credit Union. Delta Air Lines, Chick-fil-A and UPS are some of the eligible businesses.
• Minimum deposit: $1,000
• Early withdrawal penalty: 90 days of interest

Navy Federal Credit Union: 0.55% APY, $1,000 minimum deposit

Navy Federal Credit Union has more than 9 million members and is the world's largest credit union. It has a global network of 340 branches. Navy Federal Credit Union has its headquarters in Vienna, Virginia.

In addition to CDs, Navy Federal Credit Union also offers checking and savings accounts, loans and credit cards.

• What it pays: 0.55 percent APY
• Membership restrictions: Membership at Navy Federal Credit Union is open to all Department of Defense and Coast Guard Active Duty, civilian, contract personnel, veterans and their families.
• Minimum deposit: $1,000
• Early withdrawal penalty: The lesser of all dividends for 90 days on the amount that you withdraw or all of the dividends withdrawn since the certificate was issued or renewed.

Golden 1 Credit Union: 0.50% APY, $500 minimum deposit

Golden 1 Credit Union has been around since 1933. It has 1 million members and more than 70 branches in California.

• What it pays: 0.50 percent APY
• Membership restrictions: You must live or work in California and open a savings account at Golden 1 Credit Union with at least $1.
• Minimum deposit: $500
• Early withdrawal penalty: CD terms of one year through 23 months will incur a 180-day early withdrawal penalty. A CD with a term of two years or longer has an early withdrawal penalty of 365 days of dividends. A CD with a term between three months and 11 months has an early withdrawal penalty of 90 days of dividends.

Alliant Credit Union: 0.50% APY, $1,000 minimum deposit

In 1935, what's now Alliant Credit Union was founded as the United Airlines Employees' Credit Union. Alliant currently has more than 500,000 members nationwide.

Alliant offers competitive APYs with low minimum balance requirements for CDs. Alliant also has traditional individual retirement account (IRA) CDs, Roth IRA CDs and SEP IRA CDs.

• What it pays: 0.50 percent APY
• Membership restrictions: Current employees or those who are retired from a business that partners with Alliant Credit Union may be eligible to join the credit union. You may also be able to join by belonging to an organization that Alliant Credit Union partners with. You can also qualify to join Alliant Credit Union if you live or are employed in a community near its Chicago headquarters. If those circumstances don't apply to you, you can make a one-time $5 payment and Alliant Credit Union will donate that money to Foster Care to Success so you can become an Alliant Credit Union member.
• Minimum deposit: $1,000
• Early withdrawal penalty: Dividends on the number of days the CD is open, up to 90 days.

SchoolsFirst Federal Credit Union: 0.50% APY, $20,000 minimum deposit for this APY

SchoolsFirst Federal Credit Union was formed during the Great Depression in 1934. Created by school employees, the credit union has 50 branches. SchoolsFirst FCU has low minimum balances and CD terms from 30 days to five years. The more money you put in your CD, the higher the APY. CDs at this credit union have four balance tiers: $500, $20,000, $50,000 or $100,000.

• What it pays: 0.50 percent APY
• Membership restrictions: SchoolsFirst FCU serves the California educational community. Certain school employees, certain retired school employees and immediate family members of existing SchoolsFirst FCU members may be able to join.
• Minimum deposit: $20,000 for this APY
• Early withdrawal penalty: 90 days of dividends.

Bethpage Federal Credit Union: 0.45% APY, $50 minimum deposit

Bethpage Federal Credit Union is one of the largest credit unions in the United States, with over 300,000 members. It opened in 1941 for Grumman employees. Anyone who opens a $5 savings account can become a member.

Bethpage offers nine terms of CDs, ranging from three months to five years, and one 39-month Bump-Up CD.

• What it pays: 0.45 percent APY
• Membership restrictions: Bethpage FCU membership is open to anyone who opens a savings account with $5.
• Minimum deposit: $50
• Early withdrawal penalty: On a one-year CD, 90 days of interest; on longer-term CDs, 180 days of interest.

VyStar Credit Union: 0.45% APY, $500 minimum deposit

Headquartered in Jacksonville, Florida, VyStar Credit Union (formerly Jax Navy Federal CU) has more than 735,000 members and is one of the largest financial institutions in northeast Florida.

VyStar offers share certificates ranging from three months to five years, with a $500 minimum deposit to open. It also offers an 18-month step-up certificate that lets you deposit more money and “step up” your rate.

• What it pays: 0.45 percent APY
• Membership restrictions: VyStar membership is people who live or work in 49 Florida counties and 10 Georgia counties.
• Minimum deposit: $500
• Early withdrawal penalty: 180 days of dividends

Pentagon Federal Credit Union: 0.45% APY, $1,000 minimum deposit

Pentagon Federal Credit Union (PenFed) was established in 1935. It has more than 2 million members and has its main office in McLean, Virginia.

PenFed has nine terms of CDs. They range from a six-month CD to a seven-year CD.

• What it pays: 0.45 percent APY
• Membership restrictions: Everyone is eligible to apply for PenFed membership. All that is needed is to open and maintain a savings account with at least $5 in it. Some products may require military affiliation to receive certain benefits of the product.
• Minimum deposit: $1,000
• Early withdrawal penalty: The last 365 days of dividends earned when you make a withdrawal within 365 days from the date the CD was opened.

Randolph-Brooks Federal Credit Union: 0.45% APY, $1,000 minimum deposit

Randolph-Brooks Federal Credit Union has more than 55 branches. It has at least one location in the Texas cities of Austin, Corpus Christi and San Antonio.

Randolph-Brooks Federal Credit Union was established in 1952 and has its headquarters in Live Oak, Texas.

Besides its CDs, the institution offers a Really Free Checking account that doesn't require a minimum balance or charge a monthly fee.

• What it pays: 0.45 percent APY
• Membership restrictions: Where you live, attend school, work or worship are some of the more than 3,500 ways to become a member at Randolph-Brooks Federal Credit Union.
• Minimum deposit: $1,000
• Early withdrawal penalty: 60 days of interest
• What it pays: 0.45 percent APY
• Membership restrictions: Bethpage FCU membership is open to anyone who opens a savings account with $5
• Minimum deposit: $50
• Early withdrawal penalty: On a one-year CD, 90 days of interest; on longer-term CDs, 180 days of interest.

Read the fine print

Before signing up for any bank account, it's important to understand the terms and conditions. With share certificates - and CDs across the board - there's typically a penalty for early withdrawal. By pulling money out of your share certificate (or CD) before it matures, you'll likely forfeit some of the interest you've earned. Consequences for early withdrawals vary from one credit union to the next and sometimes vary within a single credit union for share certificates with different term lengths.

As long as the credit union you've chosen is federally insured by the National Credit Union Administration Share Insurance Fund, the money you've deposited in your share certificate will be safe. In the event that the credit union shuts down, you'll still walk away with your savings. Just keep in mind that there's a $250,000 threshold for single ownership accounts. Larger amounts won't be automatically insured.

Recap: Best 1-year credit union CD rates - February 2021

Learn more about other CD terms:

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.

Current Cd Rates

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

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 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.

CDs vs. Other Accounts

1-Year CDs vs Savings Accounts

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 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

Capital One Cd Rates Today

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.

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.