You are using an outdated browser. Please upgrade your browser to use this site.

Ready to get started?


Choosing the Best 1-Year CD Account for Your Savings

One year. Twelve months. Three-hundred-sixty-five days. A lot can happen in a year. Interest rates can dip. The stock market can fluctuate. If you have money to put away for this amount of time and want to keep your funds safe and growing, a 1-year certificate of deposit (CD) just might be the perfect savings product for you.

What is a CD?

A CD is a savings product known as a time deposit account. When you open a CD, you invest a fixed amount of funds for a specific time period (your term) in return for an interest rate that is typically higher than a traditional savings or money market account. Your interest rate is locked in for the term and you will be unable to access your money penalty-free until the CD's maturity date. CIT Bank offers CDs with terms ranging from 6 months to 5 years. A 1-year CD is a 12-month investment.

What happens if the 1-year CD rate changes?

A 1-year CD isn't for everyone, but if you are looking for a stable, short-term investment and don't require liquidity, there are many benefits to this savings product:

  • Interest rates are generally higher than savings and money market accounts
  • Earnings are predictable  

What happens at maturity?

At maturity, you have the option of rolling over the CD to another CD for the same term or a different term, or you can cash it out.

What are some of the disadvantages of a 1-year CD?

A 1-year CD can be a smart choice for reaching your financial goals, but it does have some drawbacks. Keep in mind the following before opening a CD:

  • CDs are not liquid and accessing funds before the CD's maturity date will result in penalties.
  • CDs with terms longer than one year will offer higher interest rates.
  • During the term of your CD, interest rates could increase.

When is a 1-year CD right for you?

A 1-year CD could be a great option for you if:

  • You won't need access to your money for one year.
  • You would like to earn a higher interest rate than a savings or money market account.
  • You want a safe, FDIC-insured investment protected from market fluctuations.
  • You are saving money for something special that is at least a year away. For example, maybe you are planning to take a vacation, buy a car, or do some work on your home.
  • You want to park your money in a place where you won't be tempted to spend it.

How to choose the best 1-year CD account

With so many financial institutions offering 1-year CDs, deciding which one to trust with your money can seem overwhelming. Here are some things you should look for when comparing your CD choices:

  • A competitive 1-year CD rate
  • Low minimum deposit
  • No account opening or maintenance fees
  • Daily compounding interest
  • A bank that is well-respected in the industry and offers excellent customer service

Enjoy savings growth and security

A 1-year CD provides a good return on your investment in a short amount of time. Your funds will be unaffected if CD rates decrease, so you'll be able to continue moving toward your savings goals.

Learn more about CIT Bank's term CDs.

Start Saving Now!

Recommended Articles