Best 12 Month CD Rates Today: Top High-Yield Options for 2025
Certificates of Deposit (CDs) are time-bound deposit accounts offered by banks and credit unions, providing a fixed interest rate over a specified term. A 12-month CD is a popular choice for those seeking a balance between higher yields and shorter lock-in periods. Unlike savings accounts, CDs typically offer higher interest rates in exchange for keeping your funds untouched for the duration of the term. Early withdrawals usually incur penalties, so it’s essential to choose a term that aligns with your financial goals.
One of the primary advantages of a 12-month CD is its relatively short term, which allows investors to take advantage of rising interest rates without committing their funds for an extended period. This flexibility is particularly valuable in a dynamic economic environment where interest rates may fluctuate. Additionally, CDs are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 per depositor, per institution, ensuring your investment is protected.
However, CDs are not without their drawbacks. The fixed interest rate means you won’t benefit from potential rate increases during the term. Furthermore, early withdrawal penalties can eat into your earnings if you need access to your funds before the CD matures. Despite these limitations, 12-month CDs remain a attractive option for risk-averse investors seeking stable returns.
Top 12-Month CD Rates in 2025
As of March 2025, several financial institutions are offering competitive rates on 12-month CDs. Below is a comparison table highlighting the top options, including their annual percentage yields (APYs), minimum deposit requirements, and other notable features.
| Financial Institution | APY | Minimum Deposit | Early Withdrawal Penalty |
|---|---|---|---|
| Ally Bank | 5.25% | $0 | 60 days of interest |
| Marcus by Goldman Sachs | 5.20% | $500 | 90 days of interest |
| Synchrony Bank | 5.15% | $2,000 | 90 days of interest |
| Capital One | 5.10% | $0 | 3 months of interest |
| Discover Bank | 5.05% | $2,500 | 6 months of interest |
Factors to Consider When Choosing a 12-Month CD
When selecting a 12-month CD, several factors should influence your decision. The APY is the most critical, as it determines your earnings. However, other considerations include the minimum deposit requirement, early withdrawal penalties, and the financial institution’s reputation. Some banks offer promotional rates or special terms, so it’s worth shopping around to find the best deal.
Another factor to consider is whether the CD is callable. Callable CDs give the bank the right to terminate the CD before its maturity date, typically when interest rates fall. While these CDs may offer higher initial rates, they come with added risk. Non-callable CDs, on the other hand, guarantee the term and rate, providing more stability.
Finally, consider the convenience of the bank’s online and mobile platforms. Many high-yield CDs are offered by online banks, which often provide better rates than traditional brick-and-mortar institutions. Ensure the bank’s digital tools meet your needs for managing your account.
Alternatives to 12-Month CDs
While 12-month CDs offer attractive rates, they may not be the best fit for everyone. Other savings vehicles, such as high-yield savings accounts, money market accounts, or short-term bonds, may provide more flexibility or higher returns depending on your financial situation.
High-yield savings accounts, for example, offer variable interest rates and allow unlimited withdrawals, making them ideal for emergency funds. Money market accounts combine features of savings and checking accounts, often providing check-writing privileges and debit card access. Short-term bonds, such as Treasury bills, are another low-risk option, though they may require more initial capital.
Ultimately, the best choice depends on your financial goals, risk tolerance, and liquidity needs. Consulting with a financial advisor can help you determine the optimal strategy for your savings.
For more information on current CD rates and savings options, visit the websites of Ally Bank , Marcus by Goldman Sachs , and Synchrony Bank .