A certificate of deposit of CD is a deposit against a fixed set of time in return for a dividend or interest. The interest is usually fixed, and at maturity, both principal and interest are returned to the investor.
CDs are competitive instruments and have always fared well against regular savings and other money market investments. Credit unions and banks usually offer a competitive interest rate on 1-year CD rates.
While banks offer several CDs, one needs to choose which one serves the needs of the investors. As a depositor, one must lookout for a few things such as minimum deposit requirements, maturity terms, annual percentage yield (APY), premature withdrawal penalties, and access to mobile banking.
Here we look at the 5 best 1-year cd rates for May 2022.
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Communitywide Federal Credit Union
Community-wide is a trustworthy credit union. The 1-year CW certificate pays a competitive APY of 1.10% with a modest account opening amount of $5.00. The CD tenor ranges from six months to 5 years, and the interest rate varies, with the 2-year term giving the highest rate of 1.80%.
An investor needs to be a member of the credit union to invest. Here the CD does not automatically renew on maturity like other banks and credit union CDs
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Sallie Mae Bank
Sallie Mae bank CD is worth looking at. The 1 -year CD rates are 1.00 % APY. An investor needs to deposit $2500 to open the CD and maintain a balance of $2500 to earn APY. The interest rates are cumulative and are paid along with the principal on maturity. Interest withdrawals from the CD will reduce the annual yield.
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Bethpage Federal Credit Union
A certificate account with Bethpage can be opened with $50, and a minimum balance of $50 is required to earn interest. The 1 -year CD rate is 1.00 % APY, with various rates offered to different tenors. This CD is one to consider. An investor can manage their CD account online via a mobile app.
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PenFed Credit Union
The money market certificate or CD offered by PenFed is quite attractive for tenors ranging from six months to five years. The CD interest rate on a 1 -year deposit is 1.25% APR which is quite competitive. An investor can open the account with $1000 only. Here the Dividend is compounded daily, giving a good yield. It offers the customers to operate their account on the mobile app and also provides flexibility to change the maturity option before the end of the original tenor chosen.
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Connexus Credit Union
The Connexus Credit Union certificate of deposit is a share certificate that gives competitive rates for various tenors. The 1 -year share certificate offers a 1.25% APR and an investor needs to deposit a minimum of $5,000. The account offers a highly rated mobile app to its customers who first need to become a member of Connexus.
Conclusion
A 1- year CD is the most popular investment instrument as the tenor gives a decent return and liquidity during maturity. Though longer tenors like five years offer better returns, the liquidity gets affected, and the risk increases.
