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One Year CD Rates from Online Banks

Certificates of deposit (CD) rates from online banks are often above average if you are willing to open and manage your account using the Internet. Most online banks offer an online application and money can be transferred to fund the CD via an electronic transfer, check, wire, or credit card. You can view a financial snapshot of any online bank by clicking on its name and then the Financial Details tab.

November 27, 2015

1 Year CD National Average: 0.36% ?

APY Vs. Nat'l Av. MIN
Colorado Federal Savings Bank 1.35% 3.75x $5,000
E-Loan 1.30% 3.61x $10,000
Sallie Mae Bank 1.25% 3.47x $0
Synchrony Bank 1.25% 3.47x $2,000
BAC Florida Bank 1.25% 3.47x $100,000
CIT Bank 1.23% 3.42x $25,000
Pentagon Federal Credit Union 1.21% 3.36x $1,000
BAC Florida Bank 1.21% 3.36x $1,500
Virtualbank 1.16% 3.22x $10,000
Discover Bank 1.15% 3.19x $2,500
Nationwide Bank 1.10% 3.06x $100,000
Ally Bank 1.05% 2.92x $0
GS Bank 1.00% 2.78x $500
Bank5 Connect 1.00% 2.78x $500
EverBank 0.95% 2.64x $1,500
Navy Federal Credit Union 0.95% 2.64x $100,000
Barclays Bank Delaware 0.80% 2.22x $0
USAA Federal Savings Bank 0.76% 2.11x $175,000
OneWest Bank 0.75% 2.08x $1,000
CNB Bank Direct 0.66% 1.83x $1,000
ableBanking 0.65% 1.81x $1,000
New Dominion Direct 0.60% 1.67x $1,000
American Express Bank, FSB 0.55% 1.53x $0
Bank of Internet 0.55% 1.53x $1,000
AirBanking 0.50% 1.39x $500
Capital One 360 0.40% 1.11x $10,000

One Year CD - Online Banks

One year CDs represent a one year commitment between a depositor (someone who has money to put in the bank) and a bank. The depositor agrees to leave a specified amount of money in the bank for a set period of time. The bank agrees to keep the money safe and to provide a fixed rate of return. Provided the bank is FDIC insured and the deposit amount is within FDIC limits, the principal is also secured by an agency of the United Stated federal government.

CD Risk

While the principal of a CD is safe and insured within FDIC limits the main risk of a CD is inflation risk. Because CDs are such a safe investment, they often do not pay much over the rate of inflation, and often pay under this rate. In these cases, the inflation adjusted value of the CD drops over time. Be sure to think about how CDs fit into your overall portfolio objectives.

How Interest is Paid

The method of distributing the interest earned on a CD varies by bank. Some banks pay interest monthly, other semi-annually, and others at the maturity of the CD. In general, online banks pay the interest electronically with a transfer back to the depositor's primary linked checking account. Other online banks may pay via a check in the mail.

Interest Rate

Currently, the most competitive banks offer 1 year rates that are on par with the top online savings and money market rates. Depositors need to decide if they want the fixed rate of the CD or the flexibility of the savings account (savings accounts do not come with any term requirements).

In a rising rate environment, it is generally better to keep money flexible and liquid and put it into either short term CDs or savings or money market accounts. In a falling rate environment, it is generally better to lock the rate using a CD or some other fixed rate investment.

Online banks generally offer CDs available to residents of any of the 50 states. The CD must be opened online and funded either by online transfer or by mail.

Advantages and Disadvantages

The advantages of online one year CDs are:


Funds deposited in FDIC banks and within insurance limits are protected by the full faith and credit of the United States government.


CDs provide a predictable, set rate of return.


The CD can be opened from the comfort of your house.


The CDs are generally available to any resident of the United States.

The disadvantages of one year CDs are:


One year CDs pay interest rates at par with many online and branch-based savings and money market accounts. There is no premium for having the money locked up for one year.


The deposited money is committed for one year.


The account must be opened online and all inquiries must be conducted online or via the phone.


Depending on the bank, the opening and funding process can take several days to weeks although the bank generally locks the rate once the application has been received and approved.

All banks listed on BestCashCow are FDIC insured; strongly recommends that you stay within FDIC insurance limits and that if you are unsure of how the limits affect you, you visit the FDIC website.

To understand all of the income generating options available to a saver, please view the Income Generating Investments Comparison Chart.

  • Art Schlesinger

    January 02, 2015

    @H.Arneat, There isn't much to be gained, but short term rates aren't likely to move up that much in 2015 and one year isn't a lot of time so why not make the extra few dollars. I went with CIT and Ally because you can raise your rate if there is a quick move up, but I did also consider Sallie Mae because it only has a 3 month withdrawal penalty. What really seems crazy to me at the 3 and 6 month rates. Years ago, those rates used to be the same as savings and money market rates and now they are much lower. You'd need to make a mistake to open one of those.

  • H.Arneat

    January 01, 2015

    I think you'd be crazy to invest in a 1 year CD now when the top yields are the same as an online savings account. Maybe the ones that allow you to reset but other than that, don't see the financial wisdom in doing so. Can anyone make an argument? I'm curious.

  • Peter Ashton

    March 18, 2014

    Unlike a savings account, however, a CD does not allow early withdrawal without penalty. For those who want to explore opening a CD, there's always a guide to the best CD options available.

  • Michael

    February 11, 2014

    Teresa, use this savings bond calculator from the US treasury. Also use the Treasury Hunt for lost or deseased relatives.

  • Teresa Simmonds

    January 18, 2014

    I have a 50 dollar savings bond. How much is it worth? Got it in 1984.

  • Ray

    August 06, 2013

    What are the alternatives to a one year CD?

  • H. Will

    August 02, 2013

    CD rates don't look that compelling when compared to online savings. I don't think it makes sense to lock up money when you can get an online savings account at almost the same rate and stay liquid.

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