Best national 1-year CD rates still stuck at 1.25%

piggy bank in glasses

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

Bank APY Minimum Deposit
CIT Bank 1.25% $1,000
Sallie Mae Bank 1.25% $2,500
Synchrony Bank 1.25% $2,000
Nordstrom Bank 1.23% $1,000
AloStar Bank 1.21% $1,000
BankDirect 1.21% $10,000
BAC Florida Bank 1.20% $1,500
Colorado Federal Savings Bank 1.20% $5,000
California First National Bank 1.16% $5,000
VirtualBank 1.16% $10,000
Northpointe Bank 1.15% $1,000
Triumph Savings Bank 1.15% $1,000
American Bank 1.10% $500
Silvergate Bank 1.08% $25,000
Ally Bank 1.05% No minimum
AmTrust Direct 1.05% $500
Nationwide Bank 1.05% $500

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:

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%
Norwood Bank Massachusetts 16 1.50%
Needham Bank Massachusetts 14 1.40%
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.