Certificates of deposit (CDs) offer a place to park your cash and earn a high yield with little risk. One-month CDs are particularly low risk thanks to their short term lengths, and we’ve reviewed over 20 financial institutions to find the best ones.
Best 1-Month CD Rates of May 2024
While one-month CDs generally have lower rates than longer CDs, they can still be rewarding. Annual percentage yields (APYs) and account details for the best one-month CDs are accurate as of May 3, 2024.
Summary: Best 1-Month CD Rates
Methodology
We reviewed 35 CD accounts at 23 financial institutions to develop this list. For the star ratings, we ranked each institution on 11 data points within the categories of APY, minimums, compound interest schedule, customer experience, digital experience, available terms and overall availability. We analyzed and ranked each account by individual term.
Here’s how we weighted each scoring category:
- APY: 35%
- Customer and digital experience: 22.5%
- Minimum deposit requirement: 17.5%
- Compound interest schedule: 10%
- Availability: 10%
- Available terms: 5%
We considered App Store and Google Play ratings, online banking access, BBB grades, TrustPilot ratings and live chat availability to analyze customer and digital experience. CD accounts with higher APYs rose to the top of the list, and accounts with daily compounding interest schedules scored higher than those with monthly or quarterly schedules. High minimum deposit requirements affected scores negatively.
To learn more about our rating and review methodology and editorial process, check out our guide on How Forbes Advisor Reviews Banks.
Current 1-Month CD Rates
According to the FDIC, the average one-month CD rate is 0.22% as of April 15, 2024. It’s common to find one-month CD rates that are much lower, but there are a few one-month CDs with higher rates that bring this average up.
CD rates tend to follow the federal funds rate set by the Federal Reserve, increasing or decreasing when this rate changes. With inflation still higher than the Fed’s 2% target rate, interest rates are expected to stay high for a bit longer before dropping at some point in 2024.
How To Find the Best 1-Month CD Rates
To find the best 1-month CD rates, research a variety of traditional banks, online banks and credit unions. Take a look at your local financial institutions as well. Many banks don’t advertise all terms online, so you may need to contact customer support to learn about current rates on one-month CD accounts.
One-month CDs tend to have low rates due to their short term lengths. To find the highest one-month CD rates, brokered CDs may be your best bet. However, these CDs typically require you to open a brokerage account and function differently from traditional CDs. They don’t allow for early withdrawals, but you can sell them on the brokerage’s marketplace—if you can find a buyer. You may have to sell a CD for less than what it’s worth if demand is low, in this case.
Aside from that, look for promotional CD rates. While promotional CDs typically carry terms longer than one month, they may have shorter options and often have the best rates.
What Is a 1-Month CD?
A one-month CD is a short-term time deposit account that earns a guaranteed interest rate for the duration of the term. When opening a one-month CD, there is typically a minimum deposit amount required, and the funds you deposit are locked away for the full month.
Getting a one-month CD can be a smart way to earn interest on cash you don’t need access to without a long-term commitment. If you have more time to save, consider long-term CDs instead, which typically offer much higher interest rates.
How Does a 1-Month CD Work?
Certificate of deposit accounts are timed deposits that allow you to deposit a set amount of cash into the account and earn a fixed interest rate.
If you need access to your funds before the CD matures, you will usually incur an early withdrawal penalty. Since one-month CDs have such short term lengths, these penalty fees typically cost you all of the interest earned and possibly some of the principal invested.
Most one-month CDs automatically renew for the same term at maturity unless you withdraw funds. At the end of your CD’s term, you’ll usually have a grace period—often seven to 10 days—during which you can withdraw funds and close the account or change the CD term.
Pros and Cons of 1-Month CDs
Pros
- Short commitment. You’ll be able to access your funds again in just one month, so there’s less risk of incurring an early withdrawal penalty than there is with longer terms.
- Guaranteed interest. CDs earn fixed interest that pays out automatically and can be collected at maturity.
- FDIC insured. CDs are FDIC-insured up to the federal maximum of $250,000 per depositor, making them a safe place to stash your cash and earn interest.
Cons
- Lower rates. Most one-month CDs offer lower rates than other CD terms and even lower than some savings accounts.
- Early withdrawal penalties. If you withdraw funds from a one-month CD account early, you might lose all of your interest earned.
- Illiquid. CDs lock away your funds for the duration of the term, so they’re less liquid than a savings or money market account.
How To Choose a 1-Month CD
Choosing the right one-month CD depends on your financial goals and requirements. It’s important to understand CD account rules, penalties and rates before depositing your money.
Many financial institutions don’t offer one-month CDs, so you can quickly narrow down your list by checking with institutions you’re interested in to see if one-month terms are even available. Consider online banks and brokerage firms in addition to traditional banks and credit unions.
Opt for a one-month CD with the highest APY and low or no fees. Look at the CD’s early withdrawal penalty and renewal terms. If a CD features automatic renewal, make sure you know how long the grace period is, and make a note to close the account before it renews if you want your money back after the month is up.
1-Month CD Alternatives
One-month CDs aren’t right for everyone, and there are plenty of alternatives to consider.
Money Market Accounts
Money market accounts are a type of savings account that pays variable, often tiered, interest rates on deposited funds. The best MMA rates can be comparable to those offered on CDs and often beat savings accounts. There may be a higher minimum to open a money market account compared to a savings account, but you can access funds more readily than a CD while still earning competitive interest. These accounts often include ATM cards and checks.
High-Yield Savings Account
High-yield savings accounts (HYSAs) offer above-average interest rates on deposits but don’t lock your funds away, making them a liquid alternative to a one-month CD account. Some HYSAs offer near or above 5.00% APY, making them a lucrative and flexible alternative to CDs.
No-Penalty CDs
If you’re worried about needing your funds soon but want to earn a higher interest rate, consider a no-penalty CD. These CDs allow you to make one withdrawal without penalty, typically stipulating that you must withdraw the entire balance. The best no-penalty CDs tend to offer much better rates than one-month CDs.
Find The Best CD Rates Of 2024