Best national 1-year CD rates still stuck at 1.25%
For 10 months now, 1-year CDs have been suffering a frustrating case of two steps forward, one step back.
The top nationally available return has seen three significant increases since last September, reaching as high as Colorado Federal Savings Bank’s 1.35% APY for six weeks this spring.
But all three times, the rate has dropped back down, with the current top yield sent back to 1.25% APY, offered by three co-leaders: CIT Bank, Sallie Mae Bank and Synchrony Bank.
That's the same return that Florida-based Citizens State Bank offered from September 2014 until early this year, before it stopped selling its CDs nationwide.
While this means we haven’t made much overall progress for almost a year, we’re at least out of the depths that began in the fall of 2011 and sank as low as 1.05% repeatedly during 2012, 2013 and 2014.
TOP 12-MONTH CD RATES: Nationally Available Bank Deals
|Sallie Mae Bank||1.25%||$2,500|
|BAC Florida Bank||1.20%||$1,500|
|Colorado Federal Savings Bank||1.20%||$5,000|
|California First National Bank||1.16%||$5,000|
|Triumph Savings Bank||1.15%||$1,000|
|Ally Bank||1.05%||No minimum|
As is often the case, many savers can find better 12-month returns by turning to credit unions and community banks, including two credit unions that offer nationwide membership:
- USAlliance Federal Credit Union is offering new members 1.51% APY on 15-month certificates, available to select residents of Massachusetts and Connecticut, those who work for certain employers in New York, and anyone nationwide who makes a donation to an affiliated charitable organization.
- Capital Educators Federal Credit Union is paying 1.30% APY on 12-month CDs. Although CapEd primarily focuses on Idaho residents from the educational sector, membership is open to anyone nationwide who donates $10 or more to The Idaho CapEd Foundation.
For those who live in the right place or work for the right employer, even higher 1-year returns may be possible, with the highest yield that we’re aware of in the country reaching 2.00% APY.
TOP 1-YEAR CD RATES: Credit Union, Community Bank Deals
|Bank||States||Term (in months)||APY|
|Unilever Federal Credit Union||New Jersey||12||2.00%|
|Peoples Transport Federal Credit Union||New Jersey||12||1.94%|
|Self Reliance New York Federal Credit Union||New York||12||1.92%|
|The Asian Bank||Pennsylvania||15||1.58%|
|Four Corners Federal Credit Union||Arizona, Colorado, New Mexico, Utah||12||1.56%|
|North Platte Union Pacific Employees Credit Union||Nebraska||12||1.50%|
|Premier Credit Union||Iowa||14||1.40%|
|Chicopee Savings Bank||Massachusetts||13||1.35%|
|Pioneer Federal Credit Union||Idaho||13||1.35%|
|TruMark Financial Credit Union||Pennsylvania||13||1.35%|
If you qualify, these deals are worth your effort since they all pay at least five times more than the current average 12-month return of 0.27% APY, according to our weekly nationwide survey of banks and thrifts.
Average 1-year returns had fallen as low as 0.22% APY and still sat there in January 2014. But the improvements have been painfully slow and have been stalled now for almost four months.
Of course, all of this is still a far cry from the 12-month average of 3.78% APY we saw in February 2007 — before reckless mortgage lending plunged us into the Great Recession.
Now, more than six years after the Federal Reserve dropped interest rates to almost zero in a bid to revive the economy, the Fed finally appears to be nearing a rate hike. Theoretically that could come as early as this month, but more likely it will be fall or early winter.
If we’re lucky, the top national rate for 12-month certificates of deposit will take another two steps forward — or even one — while we wait on the Fed.