Best national 1-year CD rates still stuck at 1.30%

piggy bank in glasses

It’s been another frustrating year for anyone buying 12-month CDs.

Last September, we were delighted to see the top nationally available return climb to 1.25% APY, which was a welcome contrast to one year before, when the top yield was still at its post-recession worst of 1.05% APY.

But it’s September again, and where are we now? At an only incrementally better 1.30% APY.

Yields reached a four-year high when Colorado Federal Savings Bank paid 1.35% APY for five weeks this spring. But it’s all been part of a faltering pattern of two steps forward, one step back.

E-Loan currently leads the term, having begun paying 1.30% APY at the end of July.

The online portal is run by Popular Community Bank, which is the mainland sister to Puerto Rico’s biggest bank, Banco Popular.

With almost 50 branches throughout New York, New Jersey and South Florida, Popular Community’s deposits (including those made through E-Loan) are fully insured by the FDIC.

Banking experts tell us Popular Community is a healthy, fast-growing bank that’s bolstering its deposit reserves to fund a burgeoning lending portfolio.

And to attract those deposits, E-Loan is now offering not just the top national 1-year return, but the leading rate on 2-, 3-, 4- and 5-year CDs as well.

We’d, of course, all love to know how long these rates from E-Loan will last, so I recently posed that question to Manuel Chinea, chief operating officer of Popular Community Bank.

Chinea said he expects E-Loan will remain competitive through the rest of this year, "but that doesn’t mean we might not pull back in a particular term as we manage the durations of our deposit portfolio."

TOP 12-MONTH CD RATES: Nationally Available Bank Yields

Bank APY Minimum Deposit
E-Loan 1.30% $10,000
CIT Bank 1.25% $1,000
Sallie Mae Bank 1.25% $2,500
Synchrony Bank 1.25% $2,000
Triumph Savings Bank 1.25% $1,000
AloStar Bank 1.21% $1,000
BAC Florida Bank 1.21% $1,500
BankDirect 1.21% $10,000
California First National Bank 1.20% $5,000
Colorado Federal Savings Bank 1.20% $5,000
VirtualBank 1.16% $10,000
American Bank 1.10% $500
Silvergate Bank 1.08% $25,000
Ally Bank 1.05% No minimum
AmTrust Direct 1.05% $500
MyBankingDirect 1.05% $500
Nationwide Bank 1.05% $500
State Bank of India – Chicago 1.05% $2,500
State Bank of India – New York 1.05% $5,000
TIAA Direct 1.01% $1,000

As is often the case, many savers can find better 1-year returns by turning to credit unions and community banks.

Three credit unions even offer nationwide deals for those who are willing to invest for a few extra months:

For those who live in the right place or work for the right employer, it's possible to make even more from 1-year CDs.

The best return on strictly local deals is pushing 2% this month.

TOP 1-YEAR CD RATES: Credit Union, Community Bank Deals

Bank States Term (in months) APY
Peoples Transport Federal Credit Union New Jersey 12 1.94%
Self Reliance New York Federal Credit Union New York 12 1.92%
Four Corners Federal Credit Union Arizona, Colorado, New Mexico, Utah 12 1.56%
Bank of the Valley Nebraska 14 1.51%
Idaho Central Credit Union Idaho, Nevada 12 1.50%
North Platte Union Pacific Employees Credit Union Nebraska 12 1.50%
Direct Federal Credit Union Massachusetts 15 1.50%
Financial Partners Credit Union California 15 1.50%
Premier Credit Union Iowa 14 1.40%
Walpole Co-operative Bank Massachusetts 15 1.40%
Pioneer Federal Credit Union Idaho 13 1.35%
Chicopee Savings Bank Massachusetts 13 1.35%
Fort Knox Federal Credit Union Kentucky 14 1.35%

If you qualify, these deals are worth your effort since they all pay about five times more than the current average 12-month return of 0.28% 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 mostly 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 is finally close to reversing course and pushing rates higher over the next several years.

The bank's rate-setting committee could announce the first rate increase in almost a decade as early as next week.

If it holds off, the initial increase won't come until October or even December.

But whenever the process begins, it's quite likely that returns will be higher by the time a 1-year CD bought now matures next September.