Best 12 Month CD Rates Today: Top Bank Interest Rates for 2025
Certificates of Deposit (CDs) are a popular savings vehicle due to their fixed interest rates and guaranteed returns. A 12-month CD is particularly appealing for those seeking a short-term commitment with higher yields than traditional savings accounts. As of March 2025, several banks and credit unions are offering competitive rates on 12-month CDs, making it an ideal time to lock in a favorable return on your investment.
Before selecting a CD, it’s important to compare interest rates, terms, and additional features such as early withdrawal penalties and minimum deposit requirements.
Top Banks Offering the Best 12-Month CD Rates
Below is a comparison of the leading financial institutions currently offering the highest interest rates on 12-month CDs. These rates are accurate as of March 2025 and are subject to change based on market conditions.
| Bank Name | Interest Rate (APY) | Minimum Deposit | Early Withdrawal Penalty |
|---|---|---|---|
| Ally Bank | 4.50% | $1,000 | 60 days of interest |
| Marcus by Goldman Sachs | 4.45% | $500 | 90 days of interest |
| Discover Bank | 4.40% | $2,500 | 90 days of interest |
| Synchrony Bank | 4.35% | $2,000 | 90 days of interest |
| Capital One | 4.30% | $1,000 | 3 months of interest |
Factors to Consider When Choosing a 12-Month CD
While interest rates are a critical factor, there are other considerations to keep in mind when selecting a CD:
- Early Withdrawal Penalties: Most banks charge a fee if you withdraw funds before the CD matures. Penalties can range from a few months of interest to a percentage of the principal.
- Minimum Deposit Requirements: Some banks require a higher initial deposit to qualify for their best rates.
- Renewal Policies: Understand whether your CD will automatically renew at maturity and at what rate.
- FDIC Insurance: Ensure the bank is FDIC-insured, protecting your deposit up to $250,000.
How Federal Reserve Policies Impact CD Rates
The Federal Reserve’s monetary policy plays a significant role in determining CD rates. When the Fed raises interest rates to combat inflation, banks typically increase their CD yields to attract depositors. Conversely, during periods of economic slowdown, CD rates may decline. Monitoring Fed announcements can provide insights into future rate trends.
Alternative Savings Options
If a 12-month CD doesn’t align with your financial goals, consider these alternatives:
- High-Yield Savings Accounts: Offer flexibility with no fixed term but generally lower rates than CDs.
- Money Market Accounts: Combine features of savings and checking accounts with competitive rates.
- Longer-Term CDs: Provide higher rates for those willing to lock in funds for multiple years.
For more information on current CD rates and banking options, visit the official websites of Ally Bank , Marcus by Goldman Sachs , and Discover Bank .