The 12 month CD term is the first term in which the interest rate exceeds that of a standard online savings account, making it the most viable CD term length around. Check the interest rates for any online bank today, and they probably can’t match what a 12 month CD can provide.
The online banks most everyone has seen advertised on TV (or Hulu!) tend to offer the best 12 month CD rates. Ally is one of those banks. It has certainly done a good job rebranding itself from the troubled GMAC Bank, and it’s winning good customer opinions for its service. But we list a variety of other quality banks below, too. Here are the best twelve month CD rates you’ll find this year:
Bank APY Minimum CD Amount Details
1.45% 11-Month No Penalty CD
Investing in a CD is a great way to keep money safe and secure while earning a solid return. One year CD rates won’t bring in thousands of dollars in interest each year unless you invest a lot of money. But they are FDIC-insured for up to $250,000 per depositor and they let you receive a guaranteed rate that’s generally higher than what you’ll get with a savings or money market account.
EverBank – Far and away the best 12 month CD rate you’ll find online is EverBank’s high-yield pledge CD, which currently sports a 1.62% APY. If you can spare another 12 months on your capital, EverBank also has one of the top two year CD rates at 1.80% APY. While EverBank also has notes ranging from three months to five years, these two particular CD rates are the best of their best.
In addition to great high-yield CD rates, EverBank also has a wide variety of other products available. A bump-rate CD allows you to increase the rate of your CD once per term. A LIBOR Index CD bases its rate off the current LIBOR. They also offer a World Currency CD, which allows you to open a CD in a variety of different world currencies, with dozens to choose from. And if you don’t care to open a CD, EverBank also offers online savings accounts, checking accounts, and money market accounts, all with top tier rates.
CIT Bank – I decided to include the 11 month no-penalty CD in the table above (1.45% APY) vs. the 12 month standard term CD (1.32%). I have absolutely no idea why CIT Bank has a higher interest rate on the no-penalty CD, but it’s a fantastic CD offer. You can withdraw your funds at any time after one full week of your deposit reaching the bank. And there’s absolutely no penalty to do so. On standard one year CDs, the routine penalty is 60 days of interest lost, so the no-penalty CD is a no-brainer.
The minimum deposit amount for a CIT CD is $1,000, and they offer terms from 6 months all the way up to 60 months. They also offer RampUp CDs where you can increase your interest rate once per term (1-3 years in length). The minimum deposit for these, however, is a robust $25,000.
Ally Bank – Ally Bank also offers an 11 month no penalty CD, and they offer a tiered interest rate. If you have $25,000 to deposit, the interest rate is a terrific 1.50%. For $5,000, the interest rate is an okay 1.25%, and for anything less, it’s a meager 1.00%. For those depositing less than $25,000, the 1.35% APY on their standard 12 month high-yield CD would be best. It, too, has no minimum balance requirement.
Ally Bank offers more than just CDs too. They offer a high-yield savings account, a cash rewards credit card, an online checking account, and one of the best cash back rewards credit cards available on the market today. With IRAs, Money Markets and even an online discount broker, Ally Bank has transformed from a now-defunct mortgage lender (GMAC) into a one-stop shop for just about any quality deposit account.
Synchrony Bank – Formerly known as GE Capital, Synchrony Bank nearly tops our list with a 1.40% APY for a 12 month CD. If you’re willing to put your money away for just three more months, the 15 month CD can reward you with a 1.55% APY. Synchrony Bank offers a range of CDs from three-month terms to five-year terms, and the minimum deposit required is $2,000.
The Synchrony online savings account offers an APY of 1.20% with no minimum deposit required. If you’re looking to invest for retirement, you can also open up a traditional or Roth IRA CD. The interest rates are identical to that of high yield CDs but with tax benefits.
Goldman Sachs Bank – Offering the best current rate on a one year CD, Goldman Sachs sports a terrific 1.50% APY. In fact, Goldman Sachs is also the only Bank on our list to offer a six year CD term with an APY of 2.45%. That APY is the highest of any CD term offered by the five banks you see featured here. There is a $500 minimum deposit required to open a CD account, and early withdrawal penalties do apply.
The Goldman Sachs Bank savings account has a 1.20% APY and was recently rated by MONEY magazine as the best standalone account for savings in 2016. Unlike some of the other banks however, Goldman Sachs Bank is a little light on their other product offerings. CDs and online savings are currently their only online deposit accounts.
Discover Bank – Discover Bank currently offers one year CD term at 1.35% APY. As you work your way up the Discover CD scale, the interest rates can get as high as 2.35% (on a 10 year term). The minimum deposit to open a CD with Discover is $2,500.
Discover Bank also very recently launched an online checking account with cash back. All account holders can earn 1% cash back on every single debit card transaction. If you’re gunshy about owning a credit card and taking advantage of rewards programs, this kind of account is a perfect match. Lastly, the Discover Savings Account currently offers a 1.15% APY and has no minimum deposit requirement.
12 Month CD vs High Yield Savings Account
When you look at the interest rates on this page, you may be asking “Why not just keep my money in an online savings account?” High yield savings accounts have almost identical interest rates as 12-month CD rates. Is there a benefit to locking your money away for one year vs. earning the same interest in a liquid account?
The primary benefit of the one year CD is in fact, locking your money away. Interest rates are not guaranteed with an online savings account. The money you have saved can be earning 1.30% APY today, and 1.15% APY tomorrow. Locking in a rate means for one full year, you know exactly what you’re getting. For the same reason I pre-pay for my heating oil every year, I also tuck away money in CDs.
Editor’s Note: Make sure to check your local banks for the best 12-month CD rates as well because sometimes the national brands can’t match what your bank down the street can provide.