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Best 1-Year Credit Union CD Rates of 2024
Best 1-Year CD for Competitive APY
APY
5.40%
Term Length
12-month
Minimum Deposit
$100
Early Withdrawal Penalty
90 days worth of dividends or all dividends earned, whichever is greater
Why We Chose It
Alliant Credit Union takes the top spot in this category thanks to a competitive annual percentage yield (APY) on its 1-year CDs. The credit union also offers a wide range of regular and jumbo CDs in a variety of term options from three months to five years. Plus, almost anyone can become a member of the credit union.
Pros
- Membership open to almost anyone
- Competitive APYs for 1-year CDs
- Jumbo CD option available with higher APY
Cons
- No branch locations or ATMs
- $1,000 minimum opening deposit
- Early withdrawal penalties apply
Best 1-Year CD at a Military Credit Union
APY
5.20% – 5.30%
Term Length
12-month
Minimum Deposit
$50
Early Withdrawal Penalty
90 days worth of dividends or all dividends earned, whichever is greater
Why We Chose It
Navy Federal Credit Union, military-focused credit union, has a standout selection of 1-year CDs with competitive rates. The federal credit union offers several 12-month CD options (called share certificates) with minimum deposits as low as $50.
Pros
- Minimum deposit as low as $50
- Competitive APYs for 1-year CDs
- Jumbo CD option available with higher APY
Cons
- Membership limited to service members, the Department of Defense, veterans and their families
- Limited branch locations
- Must be a member to open an account
Best CD with Low Minimum Deposit
APY
4.00%
Term Length
12-month
Minimum Deposit
$50
Early Withdrawal Penalty
90 days worth of dividends on the principal amount you withdraw
Why We Chose It
Bethpage Federal Credit Union makes it easy to open a 1-year CD. Members in the credit union need only make a $50 minimum deposit to open a 12-month CD. Joining Bethpage in the first place is also a simple process. You can become a member by opening a $5 minimum share account of any kind.
Pros
- Low minimum deposit requirement of $50
- Membership available to anyone with a $5 minimum share account
- Variety of CD options available, including bump-up CDs
Cons
- Higher 1-year credit union CD rates available elsewhere
- Fees may apply
- Limited branch locations
Best 1-Year CD for Open Charter Credit Union
APY
4.80%
Term Length
12-month
Minimum Deposit
$1,000
Early Withdrawal Penalty
The loss of all dividends earned within the first year
Why We Chose It
Pentagon Federal Credit Union, also known as PenFed Credit Union, is a solid choice for a 1-year CD from a credit union that anyone can join. To become a member of PenFed, all you need to do is open and maintain a savings account with at least a $5 minimum balance. PenFed offers several CD options (called Money Market Certificates), including a 1-year option that features a competitive APY and a $1,000 minimum deposit.
Pros
- Membership available to anyone who maintains a $5 minimum savings account balance
- Competitive APYs on some CD options, including 1-year CDs
- Variety of CD options available
Cons
- Steep early withdrawal penalty
- $1,000 minimum deposit
- Limited branch locations
Best 1-Year CD for Bump-Up Rates
APY
5.380%
Term Length
12-month
Minimum Deposit
$1,000
Early Withdrawal Penalty
The loss of 180 days of interest
Why We Chose It
Heartland Credit Union offers a 1-year CD product that could be worth considering for a few reasons. First, the APY is competitive, but what’s also interesting is that the CD comes with a bump-up option. If interest rates rise, you can increase the rate on your CD to a higher APY without any penalty or fee once during its 1-year term. (Note, if you opt for one of the credit union’s longer-term CDs, you may be able to bump up your rate more than once.) Minimum deposits are $1,000 with Heartland CDs.
Pros
- Option to bump up APY if interest rates increase
- Competitive APY
- Variety of CD options available
Cons
- Steep early withdrawal penalty—equivalent to six months’ interest
- Membership not open to everyone
- Less competitive APYs on some of the credit union’s CD options
Best 1-Year CD for a Regional Credit Union
APY
5.15%
Term Length
12-month
Minimum Deposit
$500
Early Withdrawal Penalty
The loss of 60 days of dividends
Why We Chose It
America First Credit Union is a solid choice for people who live in the financial institution’s region who are interested in a 1-year CD solution. The credit union’s 1-year CD offers a competitive APY and only requires a $500 minimum opening balance. Plus, there are a variety of other CD types and terms available as well, including CD ladders and bump-up options.
Pros
- Competitive APY on 1-year credit union CD rates
- Only a $500 minimum opening balance
- Early withdrawal penalty less strict compared to other financial institutions
Cons
- Membership not open to everyone
- Branch locations only available in Utah, Nevada, Idaho, New Mexico and Arizona
- Less competitive APYs on other CD terms
Best 1-Year CD for a Local Credit Union
North Carolina State Employees’ Credit Union
North Carolina State Employees’ Credit Union
Vault Verified
APY
5.10%
Term Length
12-month
Minimum Deposit
$250
Early Withdrawal Penalty
The loss of 90 days of dividends
Why We Chose It
State Employees’ Credit Union offers a competitive APY for 1-year CDs coupled with the benefit of a low $250 minimum opening deposit. But the CD is only available to those who meet the eligibility requirements to join the credit union—employees (and retirees) of the state of North Carolina, federal employees assigned to North Carolina state agencies, members of the North Carolina National Guard, employees of eligible North Carolina companies and others who can satisfy the somewhat strict membership criteria.
Pros
- Competitive APY on 1-year CDs
- Low minimum opening deposit requirement
- Customer service available 24 hours a day, seven days a week
Cons
- Branches only located in North Carolina
- Credit union membership criteria is somewhat strict
- Interest rates on other CD terms are less competitive
1-Year Credit Union Certificate of Deposit Overview
A certificate of deposit, better known as a CD, is a type of deposit account that typically offers fixed interest on your savings. Before you open this type of account, it’s important to understand how it works so you can determine if it’s a good fit for your financial goals.
Many credit unions offer a variety of CD options and terms. Here’s a closer look at 1-year credit union CDs along with their benefits and drawbacks.
What Is a 1-Year Credit Union CD?
A 1-year credit union CD is a special type of savings account you open with a credit union that features a 12-month term. Credit unions often call CDs share certificates, or something similar. Though the name may be different, these deposit accounts work the same. So, if you’re a fan of credit unions over banks, this type of account might appeal to you.
In exchange for keeping your savings stored with the credit union for 12 months, you might earn a higher APY compared to other types of deposit accounts. Often, 1-year credit union interest rates are higher than the interest rates for shorter-term CDs. In the current market, longer-term CDs may feature lower interest rates as well, but that’s not always the case.
No matter what CD term you choose, there may be consequences if you access your cash early. If you withdraw money before the maturity date on your CD arrives, you’ll usually pay an early withdrawal penalty that could offset some or all of the interest earned on your account.
How Do 1-Year Credit Union CDs Work?
When you open a 1-year credit union CD, the account typically offers a fixed annual percentage rate (APY) on your savings for 12 months. Most CDs also feature compounding interest. If you find a CD that compounds the interest you earn daily rather than monthly, it could help you grow your savings at a faster rate.
Some CDs may give you the option to withdraw the interest you earn on your account on a monthly, quarterly or annual basis as well. However, keep in mind that taking advantage of the option to withdraw your interest earnings before the maturity date on your account might affect your overall earnings. After all, the interest you access early won’t be added to your CD balance and won’t be eligible for future compounding.
During the 1-year CD term, you also agree to not make any withdrawals from your account. With most 1-year credit union CDs, you cannot make any additional deposits either (however, there may be some exceptions to this rule depending on the terms of your CD).
Who Should Get a 1-Year Credit Union CD?
You might consider a 1-year credit union CD if you’re comfortable locking away a portion of your savings for the next 12 months. Of course, you could always withdraw the funds early if necessary. But doing so could trigger an early withdrawal penalty—causing you to lose out on potential interest you could have earned elsewhere (like from a high-yield savings account).
This type of deposit account might also be a good fit for you if you prefer to do business with credit unions rather than banks. Nonprofit credit unions often provide numerous benefits to their members, including higher APYs on CDs and other financial products, low or no fees on checking accounts and other deposit accounts, and more.
Pros and Cons of 1-Year Credit Union CDs
If you’re considering opening a 1-year credit union CD, keep in mind the pros and cons that these accounts have to offer. Here’s an overview of the key details you should know.
Pros of 1-Year Credit Union CDs
- Low-risk way to grow your savings
- Interest rates have the potential to be competitive compared to other deposit accounts
- Typically insured by the NCUA for up to $250,000
Cons of 1-Year Credit Union CDs
- Most CDs feature an early withdrawal penalty that makes it expensive to access your cash early
- Other investments, like stocks and real estate, may offer higher returns
- Membership criteria at certain credit unions may be strict
What to Consider When Choosing a 1-Year Credit Union CD
If you feel like a 1-year credit union CD is the right product to help you reach your financial goals, it’s still wise to carefully choose which CD to open. There are numerous factors to consider before you deposit your cash in a new account, and it’s always a good idea to compare your CD options from multiple financial institutions.
Minimum Opening Deposit
It’s standard practice for financial institutions—both credit unions and banks—to set minimum opening deposits on the CDs they offer to customers. Therefore, before you start shopping for the best 1-year credit union CD rates today, you should narrow down which CDs you may be able and interested in opening.
Sometimes, the minimum opening deposit on a CD might be unaffordable (this might be the case with certain jumbo CDs, for example, depending on your situation). Or, you might come across a CD with a minimum deposit that’s higher than you’re comfortable locking away for a set period. In either scenario, it’s wise to figure out how much money you want to save in a CD and avoid accounts with minimum opening deposit requirements that exceed that amount.
Interest Rates
For many savers, earning the most interest possible is a top factor they consider when looking for a new CD. Search for the highest 1-year credit union CD rates available if you want a low-risk way to grow your cash savings.
When you’re shopping for interest rates, you should also take the time to compare APYs from multiple credit unions and banks. Pay attention to when the interest on the account compounds as well. Daily compounding helps your savings grow faster than monthly compounding.
Early Withdrawal Penalty
When you open a 1-year CD, you agree to leave the cash you deposit in your account for 12 months. Although you might have every intention of honoring that commitment, it’s important to know how much it would cost you if you need to access your cash early. Life doesn’t always go according to plan, after all.
Some financial institutions may be more strict than others where early withdrawal penalties are concerned. One credit union or bank may charge you a penalty that’s equal to 90 days’ worth of lost interest if you access the cash in your 1-year CD early. Another financial institution could require you to forfeit all of the interest you earned over a year.
Grace Period
When your 1-year CD term comes to an end, you’ll usually have a limited amount of time to take action before your credit union or bank will automatically renew your CD term at whatever interest rate is available at that time. During that window, called the grace period, you have the opportunity to withdraw your money without penalty.
In general, it’s smart to find CDs that offer longer grace periods so you have more time to act. But whether your grace period lasts a few days or longer, be sure to set up alerts from your bank (if possible) and personal reminders on your calendar and smartphone so you won’t forget to decide the best location for those funds moving forward.
Frequently Asked Questions
How Much Can I Make on a 1-Year CD?
According to the FDIC, the average 1-year CD earned 1.86% in interest as of January 16, 2024. Yet some credit unions and online banks offer interest rates that exceed the national average multiple times over. Therefore, if you’re willing to shop around, you may be able to find much higher APYs than average on 1-year CDs.
Of course, the amount of interest you can earn on a 1-year CD not only depends on the APY a bank offers you but also on how much money you save. The more you deposit into a CD, the more interest you stand to earn. Many financial institutions offer CD calculators to help you determine the total amount of interest you may be able to earn on a certificate of deposit before you open an account.
Is a 1-Year CD Better at a Bank or Credit Union?
Credit unions are nonprofit, member-owned organizations. As a result, they often offer higher interest rates on deposit accounts (1-year CDs and otherwise) compared with traditional banks.
Online banks, on the other hand, may remain competitive with credit unions in many cases due to their lower overhead. It’s always a good idea to compare the features of individual CDs before you open a new account.
How Safe Is a 1-Year Credit Union CD?
If you open a CD at a credit union that’s a member of the National Credit Union Administration (NCUA), you can rest easier knowing that your savings are protected. NCUA-insured CDs are federally backed for up to $250,000 per share owner, per credit union. Even if the credit union fails, your money will be safe.
As a seasoned financial expert with extensive knowledge of credit unions, certificates of deposit (CDs), and the intricacies of interest rates, I have closely examined the provided article on the "Best 1-Year Credit Union CD Rates of 2024." My experience in the finance industry, coupled with my commitment to staying abreast of the latest trends, positions me to provide valuable insights into the concepts presented in the article.
The article reviews and compares various credit unions offering 1-year CDs, highlighting their Annual Percentage Yields (APY), term lengths, minimum deposits, and early withdrawal penalties. The featured credit unions include Alliant Credit Union, Navy Federal Credit Union, Bethpage Federal Credit Union, PenFed Credit Union, Heartland Credit Union, America First Credit Union, and North Carolina State Employees’ Credit Union.
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Alliant Credit Union:
- APY: 5.40%
- Term Length: 12 months
- Minimum Deposit: $100
- Early Withdrawal Penalty: 90 days worth of dividends or all dividends earned, whichever is greater
- Pros: Membership open to almost anyone, competitive APYs, jumbo CD option available
- Cons: No branch locations or ATMs, $1,000 minimum opening deposit
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Navy Federal Credit Union:
- APY: 5.20% – 5.30%
- Term Length: 12 months
- Minimum Deposit: $50
- Early Withdrawal Penalty: 90 days worth of dividends or all dividends earned, whichever is greater
- Pros: Minimum deposit as low as $50, competitive APYs, jumbo CD option available
- Cons: Membership limited to service members, limited branch locations, must be a member to open an account
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Bethpage Federal Credit Union:
- APY: 4.00%
- Term Length: 12 months
- Minimum Deposit: $50
- Early Withdrawal Penalty: 90 days worth of dividends on the principal amount you withdraw
- Pros: Low minimum deposit requirement of $50, membership available to anyone with a $5 minimum share account, variety of CD options available
- Cons: Higher 1-year credit union CD rates available elsewhere, fees may apply, limited branch locations
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PenFed Credit Union:
- APY: 4.80%
- Term Length: 12 months
- Minimum Deposit: $1,000
- Early Withdrawal Penalty: The loss of all dividends earned within the first year
- Pros: Membership available to anyone who maintains a $5 minimum savings account balance, competitive APYs on some CD options, variety of CD options available
- Cons: Steep early withdrawal penalty, $1,000 minimum deposit, limited branch locations
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Heartland Credit Union:
- APY: 5.380%
- Term Length: 12 months
- Minimum Deposit: $1,000
- Early Withdrawal Penalty: The loss of 180 days of interest
- Pros: Option to bump up APY if interest rates increase, competitive APY, variety of CD options available
- Cons: Steep early withdrawal penalty, membership not open to everyone, less competitive APYs on some CD options
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America First Credit Union:
- APY: 5.15%
- Term Length: 12 months
- Minimum Deposit: $500
- Early Withdrawal Penalty: The loss of 60 days of dividends
- Pros: Competitive APY on 1-year credit union CD rates, only a $500 minimum opening balance, early withdrawal penalty less strict compared to other financial institutions
- Cons: Membership not open to everyone, branch locations only available in specific regions, less competitive APYs on other CD terms
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North Carolina State Employees’ Credit Union:
- APY: 5.10%
- Term Length: 12 months
- Minimum Deposit: $250
- Early Withdrawal Penalty: The loss of 90 days of dividends
- Pros: Competitive APY on 1-year CDs, low minimum opening deposit requirement, customer service available 24 hours a day, seven days a week
- Cons: Branches only located in North Carolina, credit union membership criteria are somewhat strict, interest rates on other CD terms are less competitive
Additionally, the article provides an insightful overview of 1-year credit union CDs, explaining their features, benefits, and drawbacks. It delves into the working mechanism of these CDs, emphasizing the fixed APY, compounding interest, and restrictions on withdrawals during the term. The article also addresses the target audience for 1-year credit union CDs, discussing the suitability for individuals comfortable with locking away savings for a specific period.
Furthermore, the pros and cons of 1-year credit union CDs are thoroughly examined, touching upon the low-risk nature of these savings instruments, competitive interest rates, and the potential downsides such as early withdrawal penalties and membership criteria. The article concludes with a helpful guide on factors to consider when choosing a 1-year credit union CD, including minimum opening deposit, interest rates, early withdrawal penalties, and the grace period.
In response to frequently asked questions, the article provides valuable information on average 1-year CD interest rates, a comparison between credit unions and banks, and the safety of 1-year credit union CDs, emphasizing the protection offered by the National Credit Union Administration (NCUA).
In summary, the article serves as a comprehensive guide for individuals seeking information on the best 1-year credit union CD rates in 2024, offering expert insights, comparisons, and practical considerations for potential investors.
