Most banks offer certificate of deposit terms starting at three months. But some banks offer a shorter option: a one-month CD. These CDs provide more flexibility, but they tend to have low rates due to their short term lengths. You can typically earn more with other savings options.
Top high-yield savings and money market accounts, for example, have competitive annual percentage yields (APYs) between 4% and 5%. The average one-month CD rate is 0.23% APY, according to the Federal Deposit Insurance Corporation. But if your financial goals can benefit from locking up your cash for precisely one month, then a one-month CD is a good low-risk savings vehicle, despite the lower return.
Best 1-month CD rates
Here are the best one-month CD rates available, based on the banks we track at CNET.
| Bank | APY | Min. deposit to open | Term |
|---|---|---|---|
| BrioDirect Bank | 0.05% | $500 | 1-month |
| US Bank | 0.05% | $500 | 1-month |
BrioDirect Bank
- APY APY = Annual Percentage Yield.
- 0.05%
- Min. deposit to open
- $500
- Term
- 1-month
In addition to its one-month CD, BrioDirect offers a range of savings products. If you’re comfortable locking your money away for longer, consider the bank’s promotional 12-month CD, which pays a 5.25% APY. You can make your deposit via Automated Clearing House from a linked bank account, check and wire transfer. You can open an account online, but keep in mind that there are no physical branch locations.
Early withdrawal penalty: One month of interest, whether or not earned. (For CD terms of 30 days or less.)
In addition to its one-month CD, BrioDirect offers a range of savings products. If you’re comfortable locking your money away for longer, consider the bank’s promotional 12-month CD, which pays a 5.25% APY. You can make your deposit via Automated Clearing House from a linked bank account, check and wire transfer. You can open an account online, but keep in mind that there are no physical branch locations.
Early withdrawal penalty: One month of interest, whether or not earned. (For CD terms of 30 days or less.)
US Bank
- APY APY = Annual Percentage Yield.
- 0.05%
- Min. deposit to open
- $500
- Term
- 1-month
In addition to standard CDs, US Bank offers some alternative traditional CD products, including a step-up CD and trade-up CD. The bank offers CD terms ranging from one to 60 months, with higher promotional rates on specific terms. You can open an account online or in-person at a nearby branch, but keep in mind that US Bank’s CD rate varies by location and is pretty low in comparison to other banks and account types.
Early withdrawal penalty: Either all the interest that would’ve been earned on the amount withdrawn, as if it had been held for the entire term or 1% of the amount withdrawn (whichever is greater), plus a $25 fee. (For CD terms of six months or less.)
In addition to standard CDs, US Bank offers some alternative traditional CD products, including a step-up CD and trade-up CD. The bank offers CD terms ranging from one to 60 months, with higher promotional rates on specific terms. You can open an account online or in-person at a nearby branch, but keep in mind that US Bank’s CD rate varies by location and is pretty low in comparison to other banks and account types.
Early withdrawal penalty: Either all the interest that would’ve been earned on the amount withdrawn, as if it had been held for the entire term or 1% of the amount withdrawn (whichever is greater), plus a $25 fee. (For CD terms of six months or less.)
What is a 1-month CD?
A one-month CD lets you earn a fixed return on your initial deposit in exchange for locking up your money for a month. But the short horizon means that banks and credit unions don’t offer a high APY compared to longer CD terms, such as nine-month and one-year CDs.
However, if you want to prevent yourself from spending your savings for a few weeks, a one-month CD may make sense. Just make sure you won’t need the money sooner -- withdrawing your funds early often comes with an early withdrawal penalty. And depending on the bank, your CD may automatically renew if you don’t withdraw the funds within a set amount of time after the CD matures, known as the grace period. Additionally, not every bank offers one-month CDs, so you’ll want to shop around.
Pros and cons of a 1-month CD
Pros
Requires only a one-month commitment, keeping your cash relatively liquid compared to other CD terms.
You’ll earn interest on your savings as long as you don’t withdraw from the term early.
Your funds are federally insured by the FDIC or NCUA for up to $250,000, per depositor, per account category.
Cons
Other savings accounts and CD options are offering higher rates.
Less liquidity compared with checking, savings and money market accounts. You’ll incur a fee if you take out money before the term ends.
Most banks don’t offer one-month CD terms.
Should you get a 1-month CD?
If you want a return on your cash but don’t want to lock up your money for more than one month, there’s technically nothing wrong with a one-month CD. You’ll earn interest and your funds are insured. But there are better options.
High-yield savings accounts are paying near (or over) 5% APY. You’ll have greater flexibility to withdraw money without paying a penalty and deposit funds anytime compared with CDs, even a one-year CD, as you can withdraw your money at any time without penalty. Another option is a money market account, which works like a savings account. It has some checking account features, such as a debit card and check writing. But you’ll still earn interest on your money if you meet the minimum balance requirement. Plus, you can earn more interest than a one-month CD right now.
If you prefer a CD, you can earn more in interest if you’re willing to commit to a longer term. Upping your term to even a three-month CD instead will raise your APY by a few percentage points. You can even lock in a higher rate with a no-penalty CD that will allow you fee-free access to your money if you need your funds before the CD term ends. But one-year CDs are the sweet spot for the highest rates right now.
Despite low rates, a one-month CD can make sense if you want to lock up your money for exactly a month. For example, maybe you’re saving up for a big expense next month and you want to make sure you don’t accidentally spend the money in the meantime. In that case, a one-month CD might be the psychological tool you need, and sacrificing a bit of yield might be worthwhile if it helps you reach your goal.
How to open a 1-month CD
You can open a one-month CD just like you would open any CD. To get started, follow these steps:
- Compare rates to find the right bank and CD for you. When opening any bank account, it’s best to review the terms -- especially if you’re earning interest. Aside from the best interest rate, make sure you feel comfortable with the bank’s customer service, account features and early withdrawal penalty in case you need to withdraw funds.
- Apply for a CD account. Once you’ve decided on the bank and CD type you want to go with, it’s time to submit an application to open an account. Different banks have different application processes, but most banks let you open the CD online. The application will require your personal information, such as your email, physical address and Social Security number. Your bank may also require you to upload documents to verify your identity.
- Fund your CD. After you open your CD, you’ll need to fund the account. Keep in mind that unlike with savings accounts, you can only make a one-time deposit to fund your CD -- meaning you can’t add more money until your CD matures and you open another CD. So make sure you have the correct amount you want to fund before opening the account.
FAQs
Most CDs automatically renew, but you have a grace period that’s usually 10 days. This gives you time to withdraw the funds before a new term starts. You may decide to keep the money in for another month or withdraw it to use it toward a goal or a better savings option.
Fees and early withdrawal penalties for one-month CDs vary depending on your bank or credit union. In most cases, you’ll wind up forfeiting the full month’s interest if you take out your deposit before the term ends.
CDs come with insurance protection from either the Federal Deposit Insurance Corporation or the National Credit Union Administration that protects your principal investment even if the bank or credit union somehow fails in the next 30 days. The only way you could lose money is if you withdraw the funds before the CD term ends.
If you don’t want to lock up your money for one month, a high-yield savings or money market account typically offers higher yields and more flexibility. Unlike most CDs, you’ll be able to access your money without accruing a penalty (though some banks might limit how many withdrawals or transfers you can make each month). But instead of locking in a rate, you’ll have a variable interest rate that fluctuates with the market.
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Methodology
CNET reviews CD rates based on the latest APY information from issuer websites. We evaluated CD rates from more than 50 banks, credit unions and financial companies. We selected the CDs with the highest APY for six-month terms from among the organizations we surveyed.
Banks surveyed include: Alliant Credit Union, Ally Bank, America First Credit Union, American Express National Bank, Axos Bank, Bank of America, Bank of the West, Bank5 Connect, Barclays, BMO Harris, Bread Savings, BrioDirect, Capital One, CFG Community Bank, Chase, Citizens Access, Colorado Federal Savings Bank, Connexus Credit Union, Consumers Credit Union, Discover Bank, First Internet Bank of Indiana, First Tech Federal Credit Union, FNBO Direct, GO2bank, Golden 1 Credit Union, HSBC Bank, Huntington Bank, Lake Michigan Credit Union, LendingClub Bank, Live Oak Bank, M&T Bank, Marcus by Goldman Sachs, Merrick Bank, Nationwide (by Axos), Navy Federal Credit Union, NBKC, OneUnited Bank, Pentagon Federal Credit Union, PNC, Popular Direct, PurePoint Financial, Quontic Bank, Regions Bank, Rising Bank, Salem Five Direct, Sallie Mae Bank, Santander Bank, Synchrony Bank, TAB Bank, TD Bank, TIAA Bank, Truist Bank, U.S. Bank, UFB Direct, Union Bank, USAA Bank, Vio Bank and Wells Fargo.
