How much could $1,000 earn in a 1-year CD?

After the Federal Reserve raised its benchmark rate in September, some top CDs have risen to 5.00% annual percentage yield, or APY, and may go even higher if there is another increase.

One-year certificates of deposit are one of the most popular options, offering the highest average yields without tying up your money for a long period.

But how much can $1,000 actually earn over the course of a year?

The national average yield for one-year CDs in October 2026 is 1.76%, according to the Federal Deposit Insurance Corporation, or FDIC.

A CD with a 1.76% APY would only earn about $17.60 in one year, delivering a final balance of $1,017.60. But the banks, credit unions and online fintechs on our best CD lists offer much higher rates.

Currently, the highest return on a one-year CD we’ve found is with USAlliance Financial, which has a 5.00% APY and only requires a $500 deposit to open.

USAlliance is a credit union, but joining just requires a free membership with the American Consumer Council and at least $1 in a USAlliance Financial savings account.

You can also earn a healthy 4.55% APY with E*TRADE. And, if you’re flexible on the maturity date, Happen Bank is offering 4.65% APY on an 11-month CD.

Other competitive rates on one-year CDs that allow $1,000 deposits include;

A traditional CD pays a fixed rate of interest for a set term, usually between three months and 10 years — although some institutions offer terms as short as one month or as long as 20 years (or longer).

Your money accrues interest according to the CD’s terms, and can compound monthly, quarterly or at maturity.

With a traditional CD, you can’t access the funds before maturity without paying an early withdrawal penalty. For some savers, that’s a benefit rather than a drawback, because it provides an incentive to leave money untouched and stay focused on saving.

How much interest a CD will earn depends on the annual percentage yield, the length of the term and how much money you deposit.

It can also vary by the type of CD: Traditional CDs have a fixed return that remains in place until maturity. If your bank raises interest rates, though, a bump-up CD allows you to request the higher rate during your term.

With step-up CDs, the bank automatically raises your interest rate to the new, higher yield at specific intervals.

According to the FDIC’s National Rates report from October 2026, one-year CDs currently offer the highest average return.

But national deposit rates skew low because big brick-and-mortar banks have large reserves of customer deposits and don’t need to offer attractive rates to keep money on hand. Smaller banks, credit unions and institutions offer much higher returns.

• Nuvision Credit Union offers 5.00% APY on a seven-month CD, with a $1,000 minimum and a $5,000 maximum deposit.

• Popular Direct is also offering a 5.00% APY on its 60-month CD, with a $10,000 minimum.

Choosing any CD comes down to understanding how much flexibility you want and how much you have to deposit. When shopping for a one-year CD, factors to consider include:

APYs and terms: Shop for the best yield. Online banks and credit unions usually have more competitive rates than brick-and-mortar institutions.

Minimum deposit: CD minimum deposits can range from$0 to $1,000, with $500 being the most common amount. Jumbo CDs can require as much as $100,000.

Early withdrawal penalty: Withdrawing funds before a CD matures typically incurs a penalty that can reduce your earnings. There are no-penalty CDs, but they often have lower rates.

Interest rate environment: If the Fed is expected to lower its benchmark rate, it makes sense to lock in a competitive rate now. If rates are forecast to rise, however, a shorter-term CD or a laddering strategy would offer more flexibility.

• Earns a higher return than a standard savings account.
• Fixed interest rate means predictable earnings, regardless of market changes.
• Early withdrawal penalties discourage spending money meant for savings.
• A CD ladder can let you periodically access cash while enjoying higher rates.

Cons

• Earns a lower return than stocks and other investments.
• May have a minimum deposit requirement.
• Early withdrawal penalty means CDs have limited liquidity.
• The value of your CD could decline if inflation rises above your APY.
• Can’t deposit additional money once the account is open, unless you use an add-on CD

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