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Best 1-Year CD Rates February 2024

The 1-year CD (Certificate of Deposit) is a financial product where investors commit funds for a one-year period in exchange for a fixed interest rate. The yield on a 1-year CD remains constant throughout its term, unlike variable-rate savings accounts. Rates on the best 1-year CDs are generally significantly higher than national averages.

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Overview

Capital One was founded in 1988 in Richmond, Virginia, and has become one of the most recognized names in finance. It originated as a credit card company but has since expanded its services, now offering a wide range of financial products, including banking, loans, and investment solutions. Their main attraction is leveraging technology to provide more innovative financial solutions that can be tailored to individual needs. Capital One sets itself apart with its user-friendly platforms and digital tools that can simplify business and personal finance for its customers.

Pros

pros iconNo minimum deposit requirement

pros iconCompetitive interest rates

pros iconFlexible terms

Cons

cons iconLow APYs on some term lengths

cons iconEarly withdrawal penalties

  • No minimum Min. deposit
  • 5.00% 1-Year APY
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Overview

Marcus is a personal loan and online banking provider owned by Goldman Sachs. Marcus was launched in 2016 to offer products designed to address consumer pain points regarding personal finance.

Marcus is named after Goldman Sachs’ founder, and its online platform combines digital technology with the financial strength and 150-year history of Goldman Sachs. Marcus has over $50 billion in bank deposits and $5 billion in consumer loan balances in the United States and the United Kingdom, all without the traditional brick-and-mortar branch model.

Marcus is a public company: stock ticker NYSE: MCS

Pros

pros iconHigh APYs

pros iconLow minimum deposit

pros iconNo monthly fees

Cons

cons iconEarly withdrawal penalties

cons iconFDIC-insured only up to $250,000.

cons iconNot a liquid investment

  • $500 Min. deposit
  • 5.15% 1-Year APY
  • 4.60% 13-Month No-Penalty CD
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Overview

Initially launching as a credit card company, Discover was created by Sears in 1985. Since then, the company has branched out into a fully-fledged financial institution and is one of the biggest financial brands in America. Discover provides online banking services, personal loans, student loans, and mortgages, all alongside its famous Diners Club credit card offering.

Currently based in Riverwoods, Illinois, Discover has more than 50 million customers in the US and over 17,000 employees. The financial powerhouse offers all the benefits of a full-service bank with an excellent online presence and top-quality customer service.

Discover is a public company: stock ticker NYSE: DFS

Pros

pros iconDaily compounding interest

pros iconMany term options

pros iconLonger terms earn higher APYs

Cons

cons icon$2,500 minimum deposit

cons iconAutomatic renewal upon maturity

  • $3K Min. deposit
  • 4.90% 12-Month APY
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Overview

Synchrony is a premier consumer financial services company born out of GE capital and an independent entity as of 2014. With its original roots going back to 2003, this Stamford, Connecticut-based company specialized in offering a wide range of credit products. They partner with many national and regional retailers, local merchants, manufacturers, industry associations, and healthcare service providers to tailor their credit solutions for varying consumer needs. They have extensive industry knowledge and innovative solutions, providing a strong commitment to their partnerships. Synchrony’s edge lies in understanding the distinct financial needs of its consumers and bridging the gap

Pros

pros iconVariety of CD terms

pros iconCompetitive rates

pros iconNo-Penalty and Bump-Up CDs each only have one term

pros iconNo minimum deposit

Cons

cons iconNo terms over 5 years

  • No minimum Min. deposit
  • 4.90% 12-Month APY
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Overview

Quontic Bank is an online-only, FDIC-insured bank based in New York City, NY. The bank offers multiple deposit account options with reasonable opening deposit limits and competitive annual percentage yields (APYs). Quontic Bank’s primary goal is to innovate on traditional banking without losing the personal connection with its customers.

Along with bank accounts, Quontic offers member-exclusive financial products and opportunities, including loans. Borrowers can use these loans for things like down payment assistance on their home.

Pros

pros iconNo monthly fees

pros iconCompetitive rates on savings account and CDs

pros iconExtended phone customer service

Cons

cons iconNo branch access

cons iconNo checking account

cons iconExcess withdrawal fees

  • $500 Min. deposit
  • 5.30% 1-Year APY
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Overview

Alliant Bank has operated under its existing brand since December 2003. However, the company’s history can be dated back to 1888. With five physical branches in Northern and Central Missouri, Alliant Bank offers both online personal and business banking. The financial company is also a full-service bank registered with the FDIC. Alliant Bank’s ethos is firmly built around community partnership and working together with its customers on a personal basis.

Alliant Bank is a public company: stock ticker NASDAQ: LNT

Pros

pros iconCompetitive rates, especially on long-term CDs

pros iconFDIC insured

pros iconCD laddering

Cons

cons icon$1,000 minimum deposit

cons iconInterest compounded monthly, not daily

  • $1K Min. deposit
  • 5.40% 12-Month APY
  • 5.45% Jumbo Share Certificate
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Overview

Ally Bank is headquartered in Sandy, Utah and was founded in 2009. As a full-service online bank, it offers its customers competitive interest rates, no minimum balance requirements, low fees, and round the clock customer service. Ally Bank is the digital banking division of Ally Financial Inc., and has roots that date back for nearly a century. Ally is best suited to customers who are familiar with online banking using a PC, tablet, or mobile device. The bank offers checking, savings, money market and certificate of deposit accounts. In addition, it also offers personal and auto loans, mortgages, investment accounts, and retirement services.

Ally is a public company: stock ticker NYSE: ALLY

Pros

pros icon24/7 customer service

pros iconNo monthly maintenance fees

pros iconNo minimum balance requirements

pros iconZero overdraft fees

Cons

cons iconNo cash deposit

cons iconNo branch access

cons iconEarly withdrawal penalties

  • No minimum Min. deposit
  • 4.65% 12-Month APY
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Overview

Pentagon Federal Credit Union (PenFed) was established in 1935 and has grown to become the third largest credit union in the US. The company boasts over 2.8 million members and caters to individuals in all 50 states, with more than $36 billion of assets under management. PenFed offers a wide range of financial products, including mortgages, personal loans, HELOC, student loans, and student loan refinancing.

Headquartered in Virginia, the company holds valid regulation with the National Credit Union Administration. PenFed is also known for its competitive interest rates and attractive features, such as spousal loan refinancing.

Pros

pros iconWide selection of terms

pros iconMinimum deposit as low as $500

pros iconFDIC-Insured up to $250,000

Cons

cons iconSteep early withdrawal penalty for certificates

cons iconMust open and maintain a savings account to become a member.

cons iconSome minimums required to avoid fees

  • $500 Min. deposit
  • 4.65% 1-Year APY
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Overview

Popular Direct traces its lineage back to 1893, as it’s a subsidiary of Popular, Inc., which was founded in Puerto Rico. With over a century of banking expertise, the company has emerged as a significant financial player, focusing on providing its customers with high-yield savings products and competitive CD rates. Their commitment to deliver seamless online banking experiences has led to massive technological advances. The main selling point for Popular Direct is its dedication to offering attractive interest rates. While many banks have expanded services, this company focuses on high-yield opportunities, specializing where others have broadened.

Pros

pros iconAccounts with highly competitive rates

pros iconNo monthly fees

pros iconExtended phone customer service hours

Cons

cons iconHigh minimum deposit requirements

cons iconExcess withdrawal fees

cons iconThe mobile app has limited capabilities and low customer ratings

  • $10K Min. deposit
  • 5.37% 1-Year APY
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Overview

Sallie Mae has been around since as far back as 1973, originally setting up as a student loan program that was federally guaranteed. It has been a private company since 2004. While it has not been servicing any federal loans since 2014, it still focuses on providing private student loans. One of its main focuses is catering to students who are looking for flexible repayment terms.

Sallie Mae is a public company: stock ticker NASDAQ: SLM

Pros

pros iconCompetitive rates on CDs

pros iconVarious types of accounts for short term savings

pros iconNo monthly fees

Cons

cons iconNo physical locations

cons iconLimited customer support phone hours

  • $3K Min. deposit
  • 5.25% 12-Month APY
  • 5.25% 13-Month APY
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Overview

First National Bank (F.N.B.) Corporation, a diversified financial services entity headquartered in Pittsburgh, Pennsylvania, has a legacy tracing back to 1864 with the establishment of its chief affiliate, First National Bank of Pennsylvania. Operating across seven states and the District of Columbia, F.N.B.’s service offerings are broad, from commercial and consumer banking to wealth management. The bank’s footprint spreads across major metropolitan territories, including Pittsburgh, Baltimore, Cleveland, and Washington, D.C., among others. With assets nearing $44 billion as of the end of 2022, and an extensive network of around 350 banking offices, F.N.B. demonstrates a unique blend of traditional banking and innovative financial solutions. The company is publicly traded under the stock ticker “FNB” on the New York Stock Exchange.

Pros

pros iconOffers competitive interest rates on its CDs

pros icon900+ ATMs

pros iconMultiple account options

Cons

cons iconTransfer fee if you use overdraft protection

cons iconLow annual percentage yields for most accounts

cons iconInterest compounded monthly or quarterly, not daily

  • $500 Min. deposit
  • 5.25% 13-Month APY
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Overview

First National Bank of America (FNBA), headquartered in East Lansing, Michigan, has a proud history dating back to 1955. Over the years, the bank has grown from a local entity to a national presence, particularly with its online offerings, such as CDs and high-yield savings accounts available to consumers nationwide. Primarily serving Michigan residents with a broader array of products, FNBA has consistently expanded its services while retaining its family-owned essence.

With over $2.6 billion in assets, the bank’s reputation for stability and its commitment to customer service and innovative banking solutions positions it well. Its Michigan-focused brick-and-mortar presence and strong online service suite set FNBA apart in the banking sector.

Pros

pros iconCompetitive yields and a wide range of terms

pros iconThe same APY applies to accounts opened online and in a branch

pros icon$1,000 is the minimum deposit for opening a CD

Cons

cons iconNo specialty CDs, such as no-penalty or bump-up CDs

cons iconLong-term CDs have much greater early withdrawal penalties.

cons iconCustomer service isn’t available on weekends

  • $1K Min. deposit
  • 5.15% 12-Month APY

Top 1-Year CD Rates 2024

5.00%

1-Year APY

No minimum

Minimum Deposit

$0

Minimum Balance

None

Monthly fee

Yes

Daily Compounded Interest

Yes

Early withdrawal penalty

Pros & Cons

drop-down-btn
  • con-icon No minimum deposit requirement
  • con-icon Competitive interest rates
  • con-icon Flexible terms
  • con-icon Low APYs on some term lengths
  • con-icon Early withdrawal penalties

Account types

drop-down-btn
  • 6-Month APY 4.35%
  • 9-Month APY 4.35%
  • 1-Year APY 5.00%
  • 18-Month APY 4.70%
  • 2-Year APY 4.30%
  • 30-Month APY 4.10%
  • 3-Year APY 4.10%
  • 4-Year APY 4.05%
  • 5-Year APY 4.00%

4.90%

12-Month APY

$3K

Minimum Deposit

$0

Minimum Balance

None

Monthly fee

Yes

Daily Compounded Interest

Yes

Early withdrawal penalty

Pros & Cons

drop-down-btn
  • con-icon Daily compounding interest
  • con-icon Many term options
  • con-icon Longer terms earn higher APYs
  • con-icon $2,500 minimum deposit
  • con-icon Automatic renewal upon maturity

Account types

drop-down-btn
  • 3-Month APY 2.00%
  • 6-Month APY 4.25%
  • 9-Month APY 4.25%
  • 12-Month APY 4.90%
  • 18-Month APY 4.60%
  • 24-Month APY 4.20%
  • 30-Month APY 4.00%
  • 3-Year APY 4.00%
  • 4-Year APY 3.90%
  • 5-Year APY 3.90%
  • 7-Year APY 3.80%
  • 10-Year APY 3.80%

4.90%

12-Month APY

No minimum

Minimum Deposit

$0

Minimum Balance

None

Monthly fee

Yes

Daily Compounded Interest

Yes

Early withdrawal penalty

Pros & Cons

drop-down-btn
  • con-icon Variety of CD terms
  • con-icon Competitive rates
  • con-icon No-Penalty and Bump-Up CDs each only have one term
  • con-icon No minimum deposit
  • con-icon No terms over 5 years

Account types

drop-down-btn
  • 3-Month APY 2.05%
  • 6-Month APY 4.80%
  • 9-Month APY 5.15%
  • 12-Month APY 4.90%
  • 18-Month APY 4.50%
  • 24-Month APY 4.20%
  • 36-Month APY 4.15%
  • 48-Month APY 4.00%
  • 60-Month APY 4.00%
  • No-Penalty CD 11 Months 4.50%

5.30%

1-Year APY

$500

Minimum Deposit

$0

Minimum Balance

None

Monthly fee

Yes

Daily Compounded Interest

Yes

Early withdrawal penalty

Pros & Cons

drop-down-btn
  • con-icon No monthly fees
  • con-icon Competitive rates on savings account and CDs
  • con-icon Extended phone customer service
  • con-icon No branch access
  • con-icon No checking account
  • con-icon Excess withdrawal fees

Account types

drop-down-btn
  • 6-Month APY 5.05%
  • 1-Year APY 5.30%
  • 2-Year APY 4.50%
  • 3-Year APY 4.40%
  • 5-Year APY 4.30%

5.25%

12-Month APY

5.25%

13-Month APY

$3K

Minimum Deposit

$0

Minimum Balance

None

Monthly fee

Not available

Daily Compounded Interest

Yes

Early withdrawal penalty

Pros & Cons

drop-down-btn
  • con-icon Competitive rates on CDs
  • con-icon Various types of accounts for short term savings
  • con-icon No monthly fees
  • con-icon No physical locations
  • con-icon Limited customer support phone hours

Account types

drop-down-btn
  • 6-Month APY 5.10%
  • 9-Month APY 5.15%
  • 11-Month APY 5.20%
  • 12-Month APY 5.25%
  • 13-Month APY 5.25%
  • 15-Month APY 5.00%
  • 18-Month APY 4.90%
  • 24-Month APY 4.50%
  • 30-Month APY 4.00%
  • 36-Month APY 4.00%
  • 60-Month APY 4.00%

5.37%

1-Year APY

$10K

Minimum Deposit

$0.01

Minimum Balance

None

Monthly fee

Yes

Daily Compounded Interest

Yes

Early withdrawal penalty

Pros & Cons

drop-down-btn
  • con-icon Accounts with highly competitive rates
  • con-icon No monthly fees
  • con-icon Extended phone customer service hours
  • con-icon High minimum deposit requirements
  • con-icon Excess withdrawal fees
  • con-icon The mobile app has limited capabilities and low customer ratings

Account types

drop-down-btn
  • 3-Month APY 5.00%
  • 6-Month APY 5.15%
  • 1-Year APY 5.37%
  • 18-Month APY 5.06%
  • 24-Month APY 4.80%
  • 36-Month APY 4.55%
  • 48-Month APY 4.45%
  • 60-Month APY 4.45%

Best 1-Year CD Rates for February 2024

Discover top 1-year CD rates for today 23 February 2024 with APYs ranging from 5.00% to 5.67%. Catering to all types of investors, these CDs offer flexible minimum deposit requirements from no minimum up to $10,000, providing a variety of options for optimizing financial growth.

Sallie Mae

Sallie Mae Bank is a good option for consumers looking for an online bank with competitive interest rates on CDs. The bank’s CDs offer a good way to grow your savings over time, and the FDIC insurance provides peace of mind.

5.25%

12-Month APY

5.25%

13-Month APY

$3K

Minimum Deposit

$0

Minimum Balance

None

Monthly fee

Not available

Daily Compounded Interest

Yes

Early withdrawal penalty

Pros & Cons

drop-down-btn
  • con-icon Competitive rates on CDs
  • con-icon Various types of accounts for short term savings
  • con-icon No monthly fees
  • con-icon No physical locations
  • con-icon Limited customer support phone hours

Account types

drop-down-btn
  • 6-Month APY 5.10%
  • 9-Month APY 5.15%
  • 11-Month APY 5.20%
  • 12-Month APY 5.25%
  • 13-Month APY 5.25%
  • 15-Month APY 5.00%
  • 18-Month APY 4.90%
  • 24-Month APY 4.50%
  • 30-Month APY 4.00%
  • 36-Month APY 4.00%
  • 60-Month APY 4.00%

Popular Direct

Popular Direct is best for anyone looking for an online savings account and CDs that pay top-notch yields. Popular Direct offers a variety of CDs with terms ranging from three months to five years. The minimum deposit to open a CD is $10,000. The highest APY for a CD is 5.67% for a six or 12-month CD.

5.37%

1-Year APY

$10K

Minimum Deposit

$0.01

Minimum Balance

None

Monthly fee

Yes

Daily Compounded Interest

Yes

Early withdrawal penalty

Pros & Cons

drop-down-btn
  • con-icon Accounts with highly competitive rates
  • con-icon No monthly fees
  • con-icon Extended phone customer service hours
  • con-icon High minimum deposit requirements
  • con-icon Excess withdrawal fees
  • con-icon The mobile app has limited capabilities and low customer ratings

Account types

drop-down-btn
  • 3-Month APY 5.00%
  • 6-Month APY 5.15%
  • 1-Year APY 5.37%
  • 18-Month APY 5.06%
  • 24-Month APY 4.80%
  • 36-Month APY 4.55%
  • 48-Month APY 4.45%
  • 60-Month APY 4.45%

Several are in the same range, so do your due diligence and find what works for you. 

1-Year CD: Pros & Cons

Some of the pros and cons to be aware of when locking your money into a CD are:

Pros

Cons

Short-Term Commitment: Only locked in for one year. Limited Accessibility: Funds locked for a year.
Predictable Returns: Fixed rate for the 1-year duration. Early Withdrawal Penalties: Penalties if withdrawn before the year ends.
Competitive Rates: Often higher than regular savings for a 1-year term. Missed Higher Rates: If rates rise, you're locked in for a year.
Low Risk: Shorter exposure to interest rate fluctuations. Inflation Concerns: 1-year might not outpace inflation.

How Are One-Year CD Rates Determined?

Determining CD rates is complex and involves various factors, both macro and micro. The rate you see isn’t just a random figure but a result of an avaluation of these factors. Some of the primary determinants include:

  1. Federal Reserve Rates (Fed rates):
    The Fed plays an important role in influencing CD rates. Whenever the Fed moves its overnight banking rate - for instance, hiking it higher to combat inflation - banks usually adjust their CD rates in response. Thus, a rise or fall in the Fed rate often directly translates to rises and falls in CD rates.
  2. CD Term Length:
    The duration for which you commit your money impacts the rate you receive. Longer-term CDs usually offer higher rates because you’re locking in your money for a longer period, allowing banks to utilize those funds for longer. Conversely, shorter-term CDs generally have lower rates. It’s not always the case, so double-check before purchasing.
  3. Deposit Amount:
    The more you deposit, the more the financial institution benefits. Higher deposit amounts then can sometimes fetch better rates. Some institutions offer tiered rates, where larger deposits get a higher APY.
  4. Competition Among Financial Institutions:
    Banks and credit unions always want new customers. They closely monitor what each other offers and can adjust their rates accordingly. If a bank wants to increase deposits, it may offer higher rates to lure customers.
  5. Inflation Expectations and Predictions:
    Inflation diminishes your purchasing power over time. If banks anticipate higher inflation, they may increase CD rates to get ahead of their counterparts. This makes CDs more appealing, so customers feel that they’re at least maintaining, if not growing, their money’s value.
  6. Overall Economic Health:
    The general economic situation of a country or region affects its CD rates. In an expansionary economy, consumers are more likely to spend than save, which may lead banks to increase CD rates to entice them to save.
  7. Bank’s Strategic Objectives:
    Sometimes a bank will have a desire to boost its deposits or manage its liquidity higher or lower, which can affect its CD rate offer decision.

The CD rates you come across reflect these intertwined factors, and understanding them will help you be a more informed investor.

Are 1-Year CDs Safe?

1-Year CDs are extremely safe. In the U.S., the Federal Deposit Insurance Corporation (FDIC) also safeguards the majority of CDs. Each depositor’s funds in a bank are insured up to $250,000 - and that includes your purchases of CD investments. Even if the bank where you have your funds invested goes bankrupt, your money (up to the FDIC-insured limit) will remain shielded from any adverse effects. In addition to the insurance, CDs promise fixed interest rates - offering more predictability and insulating from any market volatility.

The Evolution of 1-year CD Rates

The historical data on the highest one-year CD rates from 1967 to 2022 shows significant fluctuations over the years:

  • 1970s: CD rates generally oscillated between 5% and 10% APY.
  • Early 1980s: Rates spiked dramatically, peaking above 18% APY in 1981 and remaining above 10% until 1983, influenced by Federal Reserve policies under Paul Volcker.
  • Early 1990s: Following the S&L Crisis-caused recession, CD rates dropped, reaching about 3% APY by 1993.
  • Mid-1990s: Rates briefly returned to around 5% APY.
  • Early 2000s: A regime change in CD rates occurred with the early-2000s recession, leading to a bottom of around 1% APY in 2004.
  • Mid-2000s: Rates touched 5% APY again in 2006 but then flattened.
  • 2010s: The Federal Reserve's low-interest rate policy kept CD rates subdued, with three-month CDs yielding around 0.10% APY.
  • Late 2010s: A gradual rate hike by the Federal Reserve resulted in slight increases, but CD rates remained low.
  • 2020s: The COVID-19 pandemic and subsequent economic stimulus measures led to a spike in inflation, prompting the Federal Reserve to raise interest rates. This resulted in higher CD rates, with five-year CDs topping 5% at some banks, though short-term CD rates remained relatively low.

CD Fees

There are some associated fees and fee structures when purchasing CDs. While they might seem to be negligible and unimportant when you first purchase them, watch out for any early withdrawal fees and terms. Should you find yourself in a position where you urgently need access to your deposited funds before the maturity date, banks can and often do levy a penalty for taking your money out. The penalty can be large enough to significantly reduce or even negate your accrued interest and, in some cases, claw back some principal.

Another thing to look for is any associated maintenance fees, like annual fees or monthly fees. Some banks may charge you if you are under a certain balance or simply have annual fees associated with the type of account. Always do your due diligence and read the fine print, as any costs associated will affect your true return on investment.

Alternatives to 1-Year CDs

While One Year CDs are attractive to many investors seeking consistent, risk-free returns, some alternatives might be more suitable. A few options are below..

Long-Term CD vs. 1-Year CD:

While a 1-Year CD offers a short-term commitment with predictable returns, a Long-Term CD extends the investment period, potentially offering higher interest rates but with a longer lock-in period.

Pros  Cons
Higher interest rates compared to shorter-term CDs. Money is locked in for a longer duration.
Guaranteed returns over a longer period. Early withdrawal penalties can be steeper.

IRAs are a way to save for retirement - they are Individual Retirement Accounts. Unlike CDs, IRAs don’t tie your money for a fixed term, as you invest in a multitude of options inside of the IRA itself, allowing your money to grow potentially more for a longer time. CDs have a fixed return, which is more appealing for some investors.

Savings Accounts vs. 1-Year CD

Savings Accounts provide more liquidity and flexibility compared to a 1-Year CD, but often at the cost of lower interest rates.

Pros Cons
Liquidity: Easier access to funds compared to CDs. Typically, lower interest rates than 1-year CDs.
No penalties for withdrawals. Interest rates can be variable and may change.

Stock Market Trading vs. CDs

While a 1-Year CD offers stable and predictable returns, stock market trading has the potential for higher gains but comes with increased volatility and risk.

Pros Cons
Potential for higher returns. Higher risk: Stock values can fluctuate.
Liquidity: Can buy and sell stocks easily. Requires knowledge and research to make informed decisions.
Peer-to-Peer Lending vs. CDs

Each of these alternatives has various advantages and disadvantages compared to a 1-Year CD. Your choice must be aligned with your financial goals, risk tolerance, and liquidity requirements.

Conclusion

Certificates of Deposit (CDs) offer opportunities to gain interest in your investments as close to risk-free as possible. They are safe and predictable returns, although understanding the nuances between different financial institutions is important. In addition, watch out for any costs associated with early withdrawal when making a financial decision. As always, contact a financial expert if you have further questions or need help with managing your finances.