Best 12 Month CD Rates

Best 12 Month CD Rates of 2021 (Updated Daily)

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Last updated on November 29, 2021 Comments: 10

We track the best 12 month CD rates of 2019. You’ll find information on fees, penalties, and minimum deposits for these certificates of deposit, too.

If you compare today’s best 12 month CD rates with historical rates, they may not be impressive. With the Federal Reserve keeping interest rates low for the near future, deposit accounts will not command the interest rates that were common before the recession.

Therefore, it may not make sense to lock in a rate for a long period of time. Once you agree to a term like five years, you’ll be stuck with it. Even if rates rise in the meantime.

This is a good approach in an environment where rates are high and possibly falling, but not a great idea when rates are low and possibly increasing. Nevertheless, you can often find better rates for CDs than for savings and money market accounts. So if you know you won’t need your savings for three months, six months, or a year, you might be able to achieve slightly higher interest payments from the bank. One drawback is there is often a penalty for accessing your cash before your term is up.

For the uninitiated, a certificate of deposit (CD) is considered a “time deposit.” CDs are generally considered cash or savings when it comes to asset allocation, but the “time” requirement presents a maturity date like a bond. This probably doesn’t matter for most individual savers and investors. But it does carry an important distinction for businesses whose investments are reported to regulatory authorities.

Like savings accounts, CD interest rates are compared using APY, annual percentage yield.

Compare The Best Online CD Rates For The Current Month

Best 12 Month CD Rates

Synchrony_120x55Synchrony Bank just made a few shock waves by offering an 12-month CD at a 1.00% APY.  They require a $2,000 minimum deposit to open the CD and Synchrony even increased their savings rate to a robust 1.90%.

Discover Bank offers a hassle-free banking experience. I am a current, happy customer. Discover offers a rate of 4.75% APY for their 12-month CD.  Discover Bank also offers up a cash back checking account and high yield online savings account.

Ally Bank CD Ally Bank offers two unique types of CDs in addition to a traditional CD. The Ally Bank Raise Your Rate CD has a feature that mitigates the risk of CD rates increasing while you’re locked in. You’ll have one opportunity during the term of the CD to lock in the market interest rate. The shortest term offered is two years, though, not 12 months. The rate for this 2-year product is 1.25% APY as of May 28th, 2020.

Ally Bank also offers a No-Penalty CD, where you can withdraw your money at any time without a penalty. This term is slightly less than a year at 11 months, and the current rate is 1.20% APY for all balance tiers

The standard 12-month high yield CD nets an APY of 1.25% for all balances.  There is no minimum balance required.

Marcus logo 120x55Marcus recently threw their hat into the consumer deposits ring and are offering a 12 month CD at a great 1.35% APY.  Marcus also has an online savings account which offers an APY of 1.30%.  There is a $500 minimum to open a CD and no minimum deposit to open a savings account.

Marcus was recently named the best Stand-Alone Account for Savings by MONEY magazine.  It’s rates are always in the top 1% of banks. However they do not offer any deposit products beyond savings and CD’s.

Read more here.

American Express Bank CDCapital One 360, the brand that emerged from Capital One’s acquisition of ING DIRECT, remains a mainstay of online banking and continues to set the standard for all other online banks. Like ING before it, Capital One 360 offers state-of-the-art banking products and delivers excellent customer service. The interest rate for Capital One 360’s 12-month CD is 1.00% APY.

American Express Bank CDAmerican Express is a relative newcomer to online banking, but their products are compelling to offer here. I like my account with American Express. This bank offers a wide range of terms for CDs from six months to 60 months, with many intermediate terms. The interest rate American Express offers on their 18 -month CD is 0.50% APY.

Read more here.

Sallie Mae CDSallie Mae Bank is also new to offering banking products, having been established in 2005. My account with Sallie Mae was the easiest to open. My only criticism is the lack of integration with Quicken and online tracking tools. Sallie Mae offers a not so strong 1.05% APY on the 12-month certificate of deposit.

Sallie Mae also offers a variety of other deposit options, including a Upromise Goal Saver account which allows you to save for college! (For yourself or one of your children).

Read more here.

One Year CD Rates vs. Online Savings Accounts

You may notice that a lot of CD rates above are better than the rates that a high yield online savings account can provide.  So why not simply take your money and invest in a 12 month CD?  Well there are two main reasons that banks can provide you a slightly higher APY.

  1. CD terms are absolute.  Once you open a CD and deposit your money, you cannot withdraw the funds until the CD comes to full term.  You stand to lose up to six months worth of interest by withdrawing early.
  2. Interest rates are locked.  When a bank knows exactly what it’s paying you, it can lend your money for a better rate somewhere else.  Savings accounts have fluctuating rates, so the rate you receive today may not be the one you get tomorrow.

If time deposits aren’t right for you and you’d like the ability to withdraw your money as needed, consider a high yield savings account from one of the best online banks. If you do like the idea of saving with CDs, consider creating a CD ladder to make the most of the highest CD rates.

Do you have a favorite bank, offering a compelling CD product, you’d like to see added to this list? Let me know by leaving a comment below.

Article comments

Tom says:

Hello outside, I’m just putting some feelers out there to see if there’s anyone interested in making a pretty substantial amount of cash in a short amount of time. Only thing this requires is that you have an active bank account or credit card in the US. No cash is required up front to start. Which means your account can be on a zero balance and that’s completely fine.+1(314) 856 1730, lets talk about the next deal

Anonymous says:

if i buy CD’s from ING direct, what, if anything, would happen to those CD’s when they are finally sold to capital one? i am assuming that the rates/terms would remain the same. am i wrong to think this?

that said, man, the ING rates are horrid. it would seem the best option if you are already with ING is to just keep your funds in a savings account.

Anonymous says:

Isn’t the ING Savings Account rate 0.95%. So you can lock in your money for less than if you leave it accessable?

Also Flexo it might be worth adding a note at the bottom with a link to one of your posts on CD Ladders.

Luke Landes says:

With the savings account, the rate could, and probably will, change. The CD rate may be lower, but it’s guaranteed for the whole term. The savings rate could drop below the CD rate. Thanks for the suggestion of adding a link!

Anonymous says:

certainly a valid point, which i totally did not think about. i would still be inclined to leave my money in the savings account as i am not looking to put my money in a long-term cd at the moment anyway.

Anonymous says:

Ugghhh, the rates are awful. ING used to have the highest rates, but no more. The 1.35% at Ally looks to be the best…and at least you can up it if they offer a higher rate during the term, which I doubt. Never thought I would see CD rates this low. Feel sorry for seniors wanting some safe and liquid income.

Luke Landes says:

That’s the state of today’s economy. At some point, rates will be higher again… but the question will always be the relationship between savings interest rates (after taxes) and inflation. When interest rates are higher, inflation will be higher, too. Will the rates be above or below inflation? And how does inflation play into your own personal rate of inflation?

CDs aren’t really an investment, they’re more like a safe place to put money you might need after period of a year (or less, or more, depending on the term). Accept that your savings will probably lose money relative to inflation, and you’re in it for the safety.

Anonymous says:

I was actually looking at Ally bank for a CD Account, mainly because of their no-penalty clause. Good to see they made the list.

Anonymous says:

I’m a big discover card fan….I was a discover bank customer for a few years, but I wouldn’t recommend them to anyone now. The bank (unlink their sister company [credit card]) has the WORST customer service, they are not easy to deal with and are not open to suggestions for improvement. They used to have the WORST website although I hear it is better now. One of my biggest complaints was that they said they HAD to mail me statements, no matter what I told them they had to do it. I asked about emailing them, I was told flat out by a supervisor (not a first level phone support) that they were a bank and had no intentions of emailing paperwork. I think they finally had to change their tune when other people started to complain too.

I switched to Ally and I do love my bank 🙂 Talk about ease of use and friendly!

Luke Landes says:

Thanks for sharing your experience!