In today's high interest rate environment, many savers are looking towith the best account. While there are plenty of options to earn 5% APY or even more on your money, the right account for you can depend on a variety of factors — how much you have saved, account access, fees, minimums and more.
If you're still undecided, one type of account that should definitely be on your list today is a. Specifically, one-year CDs can offer a combination of , accessibility and more.
5 best reasons to open a one-year CD right now
Here are just a few reasons why a one-year CD could be ideal for your savings balance now.
High interest rates
Among high-interest deposit accounts currently on the market,tend to offer the highest interest rates. Some one-year CDs today earn as much as 5.50% APY. By comparison, tend to max out around 5% and the best earn closer to 4.5% APY. Here are some examples of top one-year CD rates right now:
- Popular Direct: 5.50% APY
- Sallie Mae Bank: 5.50% APY
- Merrick Bank: 5.40% APY
- Bread Savings: 5.35% APY
Fixed interest rates
Not only do one-year CDs offer some of the best rates right now, but they also carry fixed interest rates — meaning you're guaranteed that high rate through the entire term. If the Fed decides to pause, or even reverse, rate hikes over the next 12 months, your CD rate will stay the same.
This can also help you plan ahead for your savings goals, since you'll knowover the lifetime of your CD. If you put $10,000 in a one-year CD today with a 5.50% APY, for example, you'll have a total balance of $10,550 when the CD matures.
Shorter time commitment
For some, a downside of CDs is the requirement of locking your money in the account for the entire term length. If you need to access your balance early,could wipe out some or all of the interest you earn.
For savers who are wary of locking their money in a CD, one-year CDs could still be worth considering. The shorter length of time doesn't require as much commitment as, but you still get the advantage of a higher interest rate.
And with some planning beforehand, you can make sure you still have enough money in savings forso you don't need to risk withdrawing from the CD early.
Keep your money safe
On the other hand, having to lock your money in your CD account for the entire term could be useful for savers who are tempted to spend their money. The penalty fee can act as a deterrent from using your money for impulse purchases or other spending that's not the goal you have in mind for it.
Beyond protecting your balance from yourself,. You don't have to worry about losing any money due to market fluctuations and any balances under $250,000 are insured by the FDIC in case of bank failure.
For savers already considering a one-year CD term, there may be benefits to opting for a. This type of CD is even more flexible with making withdrawals, since it charges no penalty fees for accessing your money early.
No-penalty CDs most frequently come with term lengths around one year (11 months to 13 months is common). However, the downside is the potential interest you could forfeit. Some of theearn around 4.5% APY right now. But if you value the opportunity to lock in your rate and still maintain flexibility, this could be a good option.
The bottom line
If you're looking for the Start your search today and compare top rates from CDs available now!your existing savings balance, make sure you consider a one-year CD in today's high rate environment. Not only do these CDs offer some of the , but they also carry fixed interest, keep your money safe and, for savers unsure about CD penalties, can be more flexible than longer CD terms. Just make sure to always review the terms and account details of any new account before you open.
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