The one-year certificate is the reference product. It is the term every rate table leads with, the term most people mean when they say "a CD", and the term at which the question what am I giving up is most worth asking — because from twelve months onward, the things the lock costs stop being small.
This page prints no bank's rate. The hub page for this cluster explains why: a rate table is a snapshot with its assumptions stripped out, and the number is the part that has already moved. What a one-year page can do instead is show you the official baseline for the term, whether a longer lock buys anything, and the four specific things a twelve-month commitment costs you — priced, not described.
The reference row
The FDIC publishes national deposit rates by term each month. On the table effective 17 August 2026, the national average 12-month CD paid 1.71%, and the 12-month Treasury yield on the same table was 4.08%. The average one-year certificate in the country paid less than half the yield on a one-year Treasury.
The average is deposit-weighted, so it is dominated by the largest branch banks and understates what a competitive institution offers — the hub sets that out in full. But it fixes the two numbers a one-year offer should be measured against: the national average tells you whether a rate is competitive at all, and the 52-week bill, auctioned every four weeks from a $100 minimum with interest exempt from state and local tax, tells you whether a certificate is the right vehicle for the year. That second comparison, with the after-tax arithmetic, is on HYSA vs CD vs T-bills.
Does a longer lock buy anything? Check, don't assume
The intuition is that banks pay more for longer commitments. On the national average in August 2026, they did not:
| Term | National average CD rate (%) |
|---|---|
| 3 months | 1.14 |
| 6 months | 1.41 |
| 12 months | 1.71 |
| 24 months | 1.57 |
| 36 months | 1.34 |
Twelve months was the top of the curve. Committing for two years bought 0.14 points less than committing for one, and three years less still. That is the average, and competitive institutions shape their ladders differently — but it means the term premium is a thing to verify at the institution in front of you, not a law of nature. Read its 12- and 24-month APYs side by side. If the second is not meaningfully higher, the longer lock is all cost and no reward.
The curve also shows what the short rungs give up. On the same table the six-month average paid 0.30 points less than the one-year, and the three-month 0.57 points less. That is the price of access, and it is the trade a ladder makes deliberately.
What you give up, item by item
1. The exit, priced
Every fixed-term certificate carries an early-withdrawal penalty. On a one-year term the common shape is a fixed number of days' or months' interest: at the three large online banks whose schedules were checked in September 2026, the penalty steps up at either twelve or twenty-four months, and a one-year certificate sat on the lower step — 60 to 90 days' interest.
On an illustrative 4.00% certificate holding $10,000, the year's interest is $400. Leave at month five and you have earned $166.67; a 90-day penalty takes $98.63 of it, leaving $68.04, which is 1.63% annualised on the five months — worse than any savings account you would have used instead. With a 60-day penalty the net is $100.91, or 2.42% annualised. The penalty, not the rate, decided what that money earned. The penalty page works this through across terms and explains why some schedules can reach into principal.
2. The option to move
If rates rise during the year, you are locked below the market and can only leave by paying the penalty above. If they fall, you are locked above it, and a savings account — whose rate follows the market down within weeks — will pay less than your certificate for the rest of the term. The lock is a symmetrical bet on something nobody knows, and the honest way to treat it is to buy the certificate for the date, not for a view on rates. Money with a real deadline is one-year money whatever rates do.
3. The renewal you did not choose
Most certificates renew automatically at maturity, into the same term, at whatever rate the institution offers that day. Truth in Savings requires an advance notice before maturity, but the strong form of the rule — at least 30 calendar days' notice, or 20 days before the end of a grace period of at least five days — applies to certificates longer than one year. A twelve-month certificate is "one year or less" and gets the lighter alternative rules. The grace period in which you can withdraw without penalty was 10 to 14 days at the institutions checked.
The advertised APY was for the first year. What the money earns in year two depends entirely on whether you noticed the maturity date, so put it in your own calendar, two weeks early, the day you open the account.
4. The interest you take out
Many one-year certificates let you have interest paid out monthly instead of compounding. That is a legitimate choice for income, and it means you will not earn the APY on the table: the regulation requires the disclosure to say so, in the words that the annual percentage yield "assumes interest remains on deposit until maturity and that a withdrawal will reduce earnings". Compare APYs, not interest rates — APR vs APY explains the difference — and know which one you are actually going to receive.
The 13-month problem
The one-year row of any table is where promotional terms cluster: 10-, 11-, 13- and 14-month "specials" at rates above the institution's standard ladder. The rate is real for the special's term. Usually it then renews into a standard term at the standard rate, and because the special's maturity does not land on a round anniversary, it is exactly the date people forget.
A 13-month special is not a one-year certificate if the money is needed in twelve months, and it is not a good certificate at all if you do not know what it becomes in month fourteen. Read the renewal clause before the rate.
Taxes on a one-year certificate
Certificate interest is ordinary income, federal and state. For a certificate of one year or less that pays its interest at maturity, the interest generally goes into income in the year you receive it or can take it without a substantial penalty — so a one-year certificate opened in July and paying at maturity is next year's tax return, not this year's. For certificates longer than one year that defer interest to maturity, the original-issue-discount rules require part of the interest to be reported each year even though none of it has been paid. That is one more genuine difference between a one-year lock and a longer one, and it is general treatment rather than advice about your return.
The state-tax point runs the other way: Treasury interest is exempt from state and local tax and bank interest is not, which is why a lower-yielding one-year bill can net more than a higher-rate certificate in an income-tax state. The arithmetic is on the comparison page.
One certificate or four rungs
The alternative to one twelve-month certificate is four: three-, six-, nine- and twelve-month rungs, each rolled into a new twelve-month certificate as it matures. After the first cycle every dollar is earning the one-year rate, yet a quarter of the money is never more than three months from free, with no penalty and no forecasting. The cost is the yield foregone on the short rungs in the first cycle — on the August 2026 averages, 0.57 points on the three-month rung and 0.30 on the six-month, for three months and six months respectively.
For a single known expense on a known date, one certificate is simpler and correct. For money whose date is real but not exact, the ladder is the boring answer, and boring is the compliment.
What one-year money is for
A one-year certificate is for money with a date about a year out — a sinking fund for a known annual cost, a tuition payment, a planned purchase — and for the last rung of a ladder. It is not for an emergency fund, whose whole job is availability (where to keep one covers that), and it is not for money whose date might move, because the penalty does not care why the date moved.
If the balance is large, the comparison changes shape again: the jumbo page covers what a six-figure certificate does and does not buy you.
What to actually do
Buy the date, not the rate. If the money has a real deadline about a year out, a one-year certificate is the right shape. If it does not, the rate table is answering a question you should not be asking.
Measure the offer against two published numbers. The FDIC national 12-month average tells you whether the rate is competitive at all; the 52-week Treasury yield, after your state tax, tells you whether a certificate is the right vehicle.
Check whether the term premium exists at that institution. Compare its 12- and 24-month APYs. If the longer lock is not paying you for the extra year, do not give it one.
Read the penalty schedule and the renewal clause before the rate. Between two one-year certificates a tenth of a point apart, the milder penalty and the longer grace period decide.
Know which number you will actually earn. If you take interest monthly, it is not the APY.
Write the maturity date in your own calendar, two weeks early. For a twelve-month certificate the advance-notice rules are the lighter ones and the grace period is short. The habit costs nothing and is worth more than any spread in the table.
If the date is uncertain, look at a no-penalty CD instead — and read what it gives up before assuming it is free.
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