How can you be sure you're picking the right bank?
Tania Brown, CFP® professional and vice president of coaching strategy at OfColor, says the most important thing is FDIC insurance, which protects your money if the bank were to collapse. For credit unions, the equivalent is NCUA insurance. Next, she says, consider the experience you want to have with your bank: Do you want to walk in and talk to a person? Then you need a bank with a local branch. Are you fine never speaking to someone in person? Then an online bank will work for you. Do you write checks (or not)? Then you need an account that comes with checks.
Sophia Acevedo, banking editor for Business Insider, adds that it's a good idea to include costs in your list of priorities. For instance, is there a monthly fee for the account you want? If so, what are the requirements to waive it — and can you meet them? If it's important that you earn interest, you'll want to choose a bank and an account that pays a higher interest rate than the average bank account.
How do you choose between all the available CD terms?
Roger Ma, CFP® professional and author of "Work Your Money, Not Your Life", says you should start by deciding when you need the money, then looking at available rates for CDs with similar timing.
Knowing how you'll use the money you plan to put in a CD is central to the one you choose, says Mykail James, MBA, certified financial education instructor at BoujieBudgets.com. Perhaps it's a house fund — in that case, if you know that you want to buy a house in two years, you'll need to make sure your CD term ends by then.
When do you use a CD instead of a high-yield savings account or money market account?
Brown says you should know two things to help make this decision: how much money you'll be putting in and how much you plan to interact with that money. If you're going to need to make transactions before the term of a CD ends, you'll have to choose a high-yield savings or money market account.
Acevedo adds that both the high-yield savings account and money market account can be good options for an emergency fund or short-term savings goals. The best savings accounts tend to offer strong interest rates, while money market accounts typically offer more access to your money, like paper checks or debit cards.
Our Methodology: How We Chose the Best 1-Year CDs
Business Insider's personal finance team regularly monitors 1-year CD rates at over 60 banks, credit unions, and banking platforms. We monitor these CDs on a daily basis and update our list so you can be well-informed about the best 1-year CD rates today.
We are editorially independent, meaning that the business team does not dictate what we cover or write about.To understand how we cover and rate products, you can learn more about oureditorial standards.
We review CDs using our bank account methodology. We rate bank accounts on a scale of one to five stars. A one-star rating is a low score that indicates the product needs significant improvement. A five-star rating is the highest rating possible. It shows that a product is a top-tier option for most people.
For each CD, we compared the minimum opening deposits, early withdrawal penalties, miscellaneous features, and interest rates. We also considered the overall banking experience at each bank by assessing customer support availability, mobile app ratings, security, and ethics.
Each feature is scored from 0 to 5, although some features have a larger weight percentage than others. We add up these scores and calculate the weighted average to determine the account's total rating.