1-Year vs 5-Year CD Accounts

You can earn more than 5% in a high rate CD account, but which type is best?

A couple looks at their finances and savings.
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Putting your money away in a savings account is back in fashion as the Federal Reserve has been steadily raising interest rates since March 2022, and one of the most attractive options is a CD account. Though a big question many have is whether to go for a 1-year vs. a 5-year CD account. 

"One-year CDs can be good for a number of reasons — short-term savings, CD ladders, savings for a known spend in a year," Marco Rimassa, CFP at CFE Financial, told Kiplinger. "Five-year CDs are a bit more specialized as an investing tool because there is some risk of locking into a rate that doesn't adjust with interest rate changes over this time. They can be good as part of a CD ladder, but they are also good to fix payouts for those looking for 'fixed' income, such as retirees or more conservative investors." 

Guy Anker
MD, Wealth

Guy has extensive experience in personal finance journalism having joined Future (Kiplinger's parent company) after 13 years at MoneySavingExpert.com, most recently as deputy editor, and working closely alongside Martin Lewis. He has also worked at the Daily Mail as a personal finance reporter and his work has appeared in The Sun, Guardian, Observer, Mirror and other national newspapers. As a money and consumer expert, Guy is a regular guest on TV and radio – appearing on BBC News, BBC Radio 4, Sky News, ITV News and more.