Updated 11 April 2026
Best 1-Year CD Rates: Top Banks Ranked by APY (April 2026)
Best rate: 4.40% from Bread Financial
The 1-year CD is the most searched term length, and for good reason: it offers a meaningful rate lock without an extended commitment. At 4.40% APY from Bread Financial, the best 1-year rate earns $1,100 on a $25,000 deposit. In a declining rate environment, a 1-year CD guarantees today's rate through April 2027 even as HYSA rates continue to fall.
Top 8 Banks Ranked by APY
Bread Financial
4.40%
APY
Min Deposit
$1,500
Early Penalty
6 months interest
Interest on $25K
$1,100
Interest on $50K
$2,200
Bread Financial takes the top spot for 1-year CDs. The 6-month penalty is standard for this term length.
BMO Alto
4.35%
APY
Min Deposit
$0
Early Penalty
6 months interest
Interest on $25K
$1,088
Interest on $50K
$2,175
BMO Alto is just 5 basis points behind with no minimum deposit. On a $25,000 deposit the difference is $12.50 over the year.
CIT Bank
4.30%
APY
Min Deposit
$1,000
Early Penalty
6 months interest
Interest on $25K
$1,075
Interest on $50K
$2,150
CIT Bank delivers a competitive 1-year rate. Part of First Citizens BancShares, one of the largest US banks.
Marcus by Goldman Sachs
4.25%
APY
Min Deposit
$500
Early Penalty
270 days interest
Interest on $25K
$1,063
Interest on $50K
$2,125
Marcus is strong on rate but has one of the highest 1-year penalties at 270 days of interest. Only open this CD if you are confident you will not break it early.
Discover Bank
4.25%
APY
Min Deposit
$2,500
Early Penalty
6 months interest
Interest on $25K
$1,063
Interest on $50K
$2,125
Discover matches Marcus on rate with a more moderate penalty. The $2,500 minimum is the highest in the top 8.
Ally Bank
4.20%
APY
Min Deposit
$0
Early Penalty
60 days interest
Interest on $25K
$1,050
Interest on $50K
$2,100
Ally is 20 basis points below the leader but has by far the lowest penalty at just 60 days. On $25K, the rate difference costs $50 but the penalty savings on early withdrawal could be hundreds.
Capital One
4.15%
APY
Min Deposit
$0
Early Penalty
6 months interest
Interest on $25K
$1,038
Interest on $50K
$2,075
Capital One 360 CD with no minimum. Solid but not leading. Good for savers who already bank with Capital One.
Synchrony Bank
4.10%
APY
Min Deposit
$0
Early Penalty
180 days interest
Interest on $25K
$1,025
Interest on $50K
$2,050
Synchrony rounds out the top 8 with decent rates and no minimum. Penalty is a standard 180 days.
When Does a 1-Year CD Make Sense?
A 1-year CD is the default choice for money you will not need for 12 months. Common use cases: a down payment you plan to deploy next year, an annual insurance premium, savings for a wedding or major purchase with a roughly 1-year timeline, or as the middle rung of a CD ladder. The 1-year term offers the best balance of rate lock benefit and manageable commitment. In a declining rate environment like 2026, locking in 4.40% for a full year is particularly valuable because HYSA rates could drop 0.50% or more over that same period.
How 1-Year Rates Compare to Other Terms
The 1-year rate at 4.40% is currently 10 basis points below the 6-month rate (4.50%), reflecting the inverted yield curve. This means you actually earn more per year with a 6-month CD, though you face reinvestment risk when it matures. Above 1 year, rates continue declining: 4.25% for 18 months, 4.10% for 2 years, and 3.80% for 5 years. The premium for locking in longer is negative in the current environment, which is unusual. If you believe rates will drop significantly over the next year, the 1-year term offers the best combination of a decent rate and meaningful protection against those future cuts.
Early Withdrawal Penalty Analysis
| Bank | Penalty | Penalty on $25K | Net Return if Broken at 50% |
|---|---|---|---|
| Bread Financial | 6 months interest | $542 | $8 |
| BMO Alto | 6 months interest | $536 | $7 |
| CIT Bank | 6 months interest | $530 | $7 |
| Marcus by Goldman Sachs | 270 days interest | $786 | -$255 |
| Discover Bank | 6 months interest | $524 | $7 |
| Ally Bank | 60 days interest | $173 | $352 |
| Capital One | 6 months interest | $512 | $7 |
| Synchrony Bank | 180 days interest | $505 | $7 |
"Net Return if Broken at 50%" shows what you keep if you close the CD halfway through the term. Negative means the penalty exceeds earned interest and eats into principal. Full penalty comparison and calculator
Frequently Asked Questions
What is the highest 1-year CD rate right now?▾
The highest 1-year CD rate in April 2026 is 4.40% APY from Bread Financial, followed by 4.35% from BMO Alto and 4.30% from CIT Bank. Rates have declined about 0.25% from the peak in 2024 as the Fed has cut rates.
How much interest does a $10,000 1-year CD earn?▾
At 4.40% APY, a $10,000 deposit earns $440 in interest over 12 months. At 4.20% (Ally Bank), it earns $420. The $20 difference is small, but Ally's much lower early withdrawal penalty (60 days vs 6 months) may be worth the tradeoff if there is any chance you need early access.
Should I get a 1-year CD or a 2-year CD?▾
The 1-year CD currently pays 4.40% versus 4.10% for a 2-year CD. You earn more per year with the shorter term. However, if you believe rates will drop below 4.10% within the next year, the 2-year CD locks in a guaranteed rate through 2028. A split strategy, putting half in each term, hedges both scenarios.
Which bank has the lowest 1-year CD penalty?▾
Ally Bank has by far the lowest 1-year CD penalty at just 60 days of interest, compared to 6 months at most competitors and 270 days at Marcus. On $25K at 4.20%, Ally's penalty is about $173 versus $530 at Marcus. If flexibility matters, Ally is the clear choice.