If you only need to lock money away for a few weeks, a one-month certificate of deposit, or CD, can be helpful. But while most savings options have competitive annual percentage yields for savings, checking and money market accounts, that’s not necessarily true for one-month CDs.
As things stand, there aren’t a lot of reasons to get a one-month CD over a different term or a different product altogether. Some high-yield savings accounts, for example, offer APYs as high as 5.00%, and you’ll have more flexibility to withdraw and deposit funds. But if your financial goals can benefit from locking up your cash for precisely one month -- for example, if you want to prevent yourself from accidentally spending your savings -- then a one-month CD is a good low-risk savings vehicle, despite the lower return.
Here are the best one-month CD rates right now and a few alternatives to consider.
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-term horizon also means that banks and credit unions aren’t going to offer a high APY compared to one-year CDs.
Even though the Federal Reserve raised the federal funds rate to 5.00% to 5.025% last week, the best one-month CD rates haven’t broken 1.00% APY yet. Because of this, one-month CDs are in a weird spot. You can get better yields at the cost of less flexibility with a longer CD term, such as one-year CDs. You may also get better yields with a high-yield savings account or money market account with some rates as high as 4.00% to 5.00% APY. And, since the terms of one-month CDs are so short, they don’t do a lot to hedge against the risk of falling rates -- one of the main benefits of 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. Additionally, not every bank offers one-month CDs, so you’ll want to shop around.
Best 1-month CD rates
|Bank/credit union||APY||Minimum deposit|
|Huntington National Bank*||0.05%||$1,000|
APYs as of May 13, 2023. Rates may vary by region for some products.
*Rates vary by state.
More details on the best 1-month CD rates
- Min. deposit to open
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.)
- Min. deposit to open
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.)
- Min. deposit to open
Huntington National Bank* offers a wide range of CD terms ranging from one month to six years. However, the standard rates are fairly low -- 0.05%.. The six-year CD only pays a slightly higher APY, which is a paltry sum for keeping your money locked up for 72 months. However, you’ll need to open a CD at a local branch, where you’ll need to provide funds for your initial deposit.
Early withdrawal penalty: Yes, but the amount is not disclosed online.
Pros and cons of a 1-month CD
Only requires 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
CDs are federally insured bank or credit union for up to $250,000, per depositor, per account category
You can earn a much higher rate of return with longer term CDs, high-yield savings accounts and money market accounts
Less liquidity compared to checking, savings and money market accounts
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 three months, there’s technically nothing wrong with a one-month CD. Assuming your bank or credit union is insured by the Federal Deposit Insurance Corporation or National Credit Union Administration, your money will be safe and you can earn a guaranteed return.
But there are better options.
High-yield savings accounts can pay up to 5.00% APY, with 3.00% to 5.00% being the typical range for a good rate. You’ll have greater flexibility to withdraw and deposit funds than even a one-year CD, as you can withdraw your money at any time without penalty. Money market accounts, which work like savings accounts with some checking account features, have similar rates to high-yield savings accounts.
If you’re specifically looking for a CD, you’ll get much better rates 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. But CD terms between one and two years will typically be the sweet spot for the highest rates right now.
If APY is your primary concern, there’s really no good reason to choose a one-month CD over a high-yield savings account, money market account or longer-term CD -- at least, given the current rates.
But it 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 in one 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 product and bank for you. When choosing any banking product, you should compare rates and banks to find the best place to store your money and earn interst. You might also consider other options, such as high-yield savings accounts or longer-term CDs, both of which are likely to offer better rates than one-month CDs.
- Apply to open a CD account. Once you’ve decided on the bank and CD type you want to go with, you’ll have to open a CD account. Different banks have different application processes. Some may allow you to apply online and open a CD instantly, while others may require you to call or visit a branch to open an account through a customer service representative. You’ll need personal information, such as your email, physical address and Social Security number. You may also have to upload some documents to verify your identity, if your bank requires it.
- Fund your CD with an initial deposit. After you open your CD, you’ll need to fund it. 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.
If you have a specific short-term savings goal in mind, a one-month CD might be able to help you achieve it. Another reason to consider a one-month CD is to establish some financial discipline. Since there’s an early withdrawal penalty if you take out your money, you’ll be less likely to try to access the funds.
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.
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, 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, 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.