1-year CD rates: October 2026 snapshot
| Bank or credit union | Term | APY | Minimum | Rate date |
|---|---|---|---|---|
| E*TRADE (Morgan Stanley Private Bank) | 1 year | 4.75% | $0 | Oct. 9–11, 2026 |
| Marcus by Goldman Sachs | 1 year | 4.40% | $500 | Oct. 6, 2026 |
| Popular Direct | 1 year | 4.50% | $10,000 | Oct. 9, 2026 |
| Quorum Federal Credit Union | 1 year | 4.50% | $100 | Oct. 6, 2026 |
| CFG Bank | 1 year | 4.46% | $500 | Oct. 9, 2026 |
| Bread Savings | 1 year | 4.45% | $1,500 | Oct. 9, 2026 |
| Capital One | 11 months | 4.30% | Not listed | Oct. 6–7, 2026 |
| Ally Bank | 11-month No Penalty | 2.8% | $0 | Oct. 5, 2026 |
| Synchrony | 11-month No Penalty | 0.25% | $0 | Oct. 9, 2026 |
Source: Bankrate CD rate table and bank reviews; NerdWallet CD rates (APYs as of Oct. 9, 2026); Ally.com. Rates change often; confirm with the bank.
Rates moved quickly after the Fed's September hike. On September 23, the best 12-month rates in The College Investor's survey were 4.35%. By October 9–11, E*TRADE's 1-year CD was at 4.75% on both Bankrate and NerdWallet. Two other banks reached 4.75% at slightly different terms: Bread Savings for 18 months ($1,500 minimum) and Barclays for 2 years ($0 minimum).
What the average bank pays
The top rates are far above what most banks pay. Bankrate's weekly survey put the national average 1-year CD at 2.13% on October 11, 2026. The FDIC's national rate for 12-month CDs, a deposit-weighted average of what banks actually pay, was 1.73% in September 2026.
| $10,000 for one year at | Interest earned |
|---|---|
| 4.75% APY (top rate, Oct. 2026) | $475 |
| 4.40% APY (Marcus, Oct. 6) | $440 |
| 2.13% APY (Bankrate national average) | $213 |
| 1.73% (FDIC national rate, Sept.) | $173 |
Source: our calculations using APYs above, interest held to maturity, before taxes.
Moving $10,000 from an average 1-year CD to a top one adds about $262 over the year. Credit unions such as Quorum often appear near the top of rate tables. Their share certificates work like CDs and are covered by NCUA insurance up to the same $250,000 limit that the FDIC applies to banks.
Early withdrawal penalties
A CD's penalty matters as much as its rate if there's a chance you will need the money early. One-year penalties vary widely:
| Bank | Penalty on a 1-year CD |
|---|---|
| Ally | 60 days of interest (terms of 3–24 months) |
| Marcus | 90 days of interest (terms of 6 months to 1 year) |
| Citi | 90 days of interest (terms of 3 months to 1 year) |
| Capital One | 3 months of interest (terms of 1 year or less) |
| E*TRADE | Varies by term; NerdWallet says its penalties can reach 15 months of interest on some CDs |
Source: NerdWallet, CD early withdrawal penalties by bank (May 2026) and CD rates (Oct. 2026); Ally.com.
On $10,000 at 4.40%, a 90-day penalty costs about $108. E*TRADE pays the highest rate in the table, but NerdWallet and Bankrate both describe its penalties as on the high end, reaching as much as 15 months of interest on some terms, so confirm the 1-year penalty before you open one. Any penalty bigger than the interest you have earned comes out of your principal. Ally, for example, says it takes penalties from interest first and then principal if needed. Ally also doesn't allow partial early withdrawals and gives a 10-day grace period at maturity.
If you might need the money, a no-penalty CD lets you withdraw without a penalty. You pay for that flexibility: Ally's 11-month No Penalty CD paid 2.8% on October 5, and Synchrony's paid 0.25%.
1-year CD vs. high-yield savings vs. 52-week T-bill
| Option | Rate, early Oct. 2026 | Rate locked? | Access to money | State income tax |
|---|---|---|---|---|
| Top 1-year CD | 4.75% APY | Yes, for 12 months | Penalty if withdrawn early | Taxed |
| High-yield savings | 4.00%–4.09% APY (non-promotional) | No, can change any time | Any time | Taxed |
| 52-week Treasury bill | 4.616% (Sept. 29 auction) | Yes, to maturity | Sell before maturity at market price | Exempt |
Source: Bankrate and NerdWallet (CDs); CNBC Select (Live Oak 4.00%, Vio Bank 4.09%, Oct. 2, 2026); tftc.io from Treasury auction results; Treasury and IRS guidance on interest taxation.
Versus savings: a CD locks the rate, which helps if rates fall. If the savings rate held at 4.09% all year, $10,000 would earn about $409, against $475 in a 4.75% CD. But savings rates are variable and tend to change after the Fed meets, so the gap could shrink. Savings also keeps your money available, which is why it suits an emergency fund. See our best high-yield savings accounts.
Versus T-bills: Treasury interest is subject to federal income tax but exempt from state and local income tax. In a state with a 5% income tax, a 4.75% CD keeps about 4.51% after state tax, slightly below a 4.616% bill. A 4.40% CD keeps about 4.18%, further behind. (Treasury quotes the bill's investment rate, a bond-equivalent yield, so the comparison with an APY is approximate.) If you live in a high-tax state, compare after-tax yields. T-bill interest is reported in the year the bill matures or is sold, while CD interest is generally taxable in the year it is credited, and banks send a 1099-INT for $10 or more.
Terms just shorter or longer than a year
If you don't need exactly 12 months, nearby terms paid as much or more in early October 2026:
- 6 months: Quorum Federal Credit Union paid 4.40% with a $100 minimum (Bankrate), and Popular Direct 4.35% with a $10,000 minimum (NerdWallet).
- 18 months: Bread Savings paid 4.75% with a $1,500 minimum (NerdWallet).
- 2 years: Barclays paid 4.75% with no minimum and a penalty of 90 days of interest (Bankrate).
A longer term at the same rate locks in your yield for longer, which helps if rates fall but hurts if they keep rising. A 6-month CD lets you reinvest sooner if the Fed raises rates again.
Rate outlook after the September 2026 Fed hike
On September 16, 2026, the Federal Reserve raised its target range by a quarter point to 3.75%–4.00%, its first increase since 2023. Bankrate notes that competitive CD rates usually move in the same direction as the Fed's rate and that the federal funds rate may rise again later in 2026. At the end of September, CME FedWatch put the odds of another hike in October above 72%. The next Fed meetings are October 27–28 and December 8–9.
What that means for a 1-year CD:
- If rates keep rising, a CD you open today could be beaten by one you open in a month or two. A no-penalty CD, a savings account or a short CD keeps you flexible, at a lower rate.
- If rates stall or fall, locking in now protects your yield for 12 months.
- If you are unsure, split the money. For example, put half in a 1-year CD now and keep half in savings to move later.
Short CDs have paid more than long ones for years. Bankrate's national average for a 1-year CD has been above the 5-year average since February 2023. For longer terms and ladders, see our best CD rates guide.
How to choose a 1-year CD
- Check insurance. Banks should be FDIC-insured and credit unions NCUA-insured, which covers up to $250,000 per depositor, per ownership category, per institution.
- Compare APY and minimum. Some top rates require $500 or more.
- Read the penalty. Know the cost in dollars if you withdraw at month six.
- Know what happens at maturity. Check whether the CD renews automatically and how long the grace period is (Ally's is 10 days), and set a reminder.
- Consider the tax bill. CD interest counts as ordinary income, so a T-bill can come out ahead in a high-tax state even at a slightly lower rate.
- Look beyond your own bank. Our online banks guide compares the banks behind many of these rates.
Frequently asked questions
What is the best 1-year CD rate right now?
As of October 9–11, 2026, E*TRADE's 1-year CD paid 4.75% APY with no minimum, according to Bankrate and NerdWallet. Marcus paid 4.40% with a $500 minimum on October 6. Rates change often, so check the bank's site.
Is a 1-year CD better than a high-yield savings account?
It depends on whether you need access and where rates go. A 4.75% CD beats a 4.09% savings account if savings rates stay flat, but savings rates are variable and your money stays available.
Should I buy a 1-year CD or a 52-week Treasury bill?
Compare after-tax yields. T-bill interest is exempt from state and local income tax. In a 5% state-tax state, a 4.75% CD nets about 4.51%, slightly less than a 4.616% bill, and a 4.40% CD nets about 4.18%. With no state income tax, the 4.75% CD comes out ahead.
Can I lose money in a CD?
Not from the bank failing, if it's FDIC- or NCUA-insured within limits. But an early withdrawal penalty larger than the interest you have earned can reduce your principal.
Will CD rates go up after the Fed's September 2026 hike?
Competitive CD rates usually move with the Fed. Top 1-year rates rose from about 4.35% in late September to 4.75% by mid-October. Markets saw a strong chance of another hike in October, but that is not certain.
How are CD earnings taxed?
CD interest is taxable as ordinary income, generally in the year it is credited. Your bank sends Form 1099-INT if you earn $10 or more.
Sources
- Bankrate – Best CD rates
- NerdWallet – Best CD rates
- Bankrate – Current CD rates for October 2026
- Bankrate – Marcus by Goldman Sachs review
- Bankrate – Capital One bank review
- The College Investor – Best 12-month CD rates, September 23, 2026
- Ally Bank – Rates
- NerdWallet – CD early withdrawal penalties by bank
- CNBC Select – Best high-yield savings accounts
- TFTC – Treasury bill rates
- Federal Reserve – Implementation note, September 16, 2026
- Wealth Professional – US long bond clears 5.6% (Sept. 30, 2026)
- IRS – Topic 403, Interest received
- FDIC – Understanding deposit insurance
- NCUA – Share insurance
Rates, fees and terms change often. Figures were checked in October 2026; confirm current details with the provider before you apply.