What's a good 1-year CD account interest rate considered to be now?
Summary
Interest rates for 1-year certificate of deposit (CD) accounts currently range from about 4.15% to 4.25%, making them a good option for savers seeking fixed returns. These rates are higher than most other savings accounts, and locking money in for a year can protect against potential future rate cuts by the Federal Reserve.Key Facts
- The Federal Reserve recently paused interest rate changes but may cut rates later this year due to slowing inflation.
- 1-year CD rates vary by bank, with online banks often offering better rates than traditional banks.
- Good 1-year CD interest rates currently range roughly between 4.15% and 4.25%.
- Some banks offer rates as low as 4.00% or as high as 4.30% or more depending on account terms.
- CD rates are fixed, meaning they stay the same for the full year, unlike variable-rate savings accounts.
- High-yield savings accounts pay up to about 4.10%, money market accounts 3.90% to 4.00%, and traditional savings accounts around 0.38%.
- Early withdrawal from a CD can lead to fees that may eliminate the interest earned.
- Savers should shop around and be sure they can keep funds locked in the CD for the entire term before investing.
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