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- The highest CD rate available right now is 6.50% APY.
- Plenty of CDs pay over 5% APY on your total balance and are available nationwide.
- Seetoday's best CD rates»
Banks have been increasing their CD interest rates for well over a year now. The average interest rate on a 6-month CD is 1.36% APY (Annual Percentage Yield), and the average rate for a 1-year term is 1.76% APY. Many institutions are paying significantly higher rates.
Is a 7% CD rate worth it? Learn more about how a 7% interest rate works on a CD, and whether you should bother opening an account with such a high rate.
Which bank gives 7% interest on a CD?
Right now, there aren't any financial institutions offering 7% interest on a CD. Alpena Alcona Area Credit Union, a local financial institution in Michigan, previously offered a 7.19% APY on a 7-month CD special, but that offer has ended.
There are a few financial institutions with CDs paying 6% APY or more, though. You may need to meet certain eligibility requirements to qualify for these CDs.
Alternative high-yield CD options
While there aren't any financial institutions paying 7% on a CD right now, there are other banks that pay high CD rates.
What does a 7% interest rate on a CD mean?
When a CD pays 7% APY, it means you would earn 7% on your balance over one year. Most banks compound interest, which means they pay interest both on the amount you've deposited and the interest you've earned on top of it.
Banks and credit unions can compound interest daily, monthly, quarterly, or annually — and the more often they compound interest, the more you'll earn in the long run. It's common for banks to compound interest daily and pay it into your account monthly, while credit unions typically compound interest monthly.
A 7% APY CD may come with certain rules about earning interest. Before opening a CD for its high interest rate, be sure you understand the bank's rules.
What to look for in a CD
Selecting a CD is an important decision. Here are factors to consider when making your choice:
- Interest rate: Look at the CD's interest rate and how often the bank compounds interest. Find out whether you have to meet criteria to earn the highest rate each month.
- Term length: How long are you comfortable parting with your money? For example, you don't want to open a 5-year CD if you think you'll need the money in one year. Choose a term that matches your financial goals.
- Minimum opening deposit: Some banks don't require any money to open a CD, while others require thousands. Regardless of the amount, make sure you can afford the opening deposit. And as with Alpena Alcona Area Credit Union, some institutions may limit how much you can deposit.
- Early withdrawal penalties: If you take out money before your CD term ends, you'll likely have to pay a penalty. Find out what the bank's penalties are and decide whether you're comfortable with that risk. If you're worried about early withdrawal penalties, you might prefer a no-penalty CD.
7% APY CDs: FAQs
Where can I get 7% interest on my money?
What is the highest-interest paying CD?
The highest-yield CD right now is the Financial Partners Credit Union 8 Month CD Special. You may earn 6.50% APY on the limited-time CD special.
Can you get 6% on a CD?
Yes, several credit unions pay 6% or more on a CD right now. Check out our best CD rates guide to find the highest rates out there.
Is there a CD that pays 5%?
Yes, many of the best 3-month CDs, 6-month CDs, 1-year CDs, 18-month CDs, and 2-year CDs pay at least 5% right now. For example, Signature Federal Credit Union pays over 5% on all of its CDs with terms of 2 years or less.
Personal Finance Reviews Editor
Laura Grace Tarpley (she/her) is a senior editor at Personal Finance Insider. She oversees coverage about mortgage rates, refinance rates, lenders, bank accounts, and borrowing and savings tips for Personal Finance Insider. She was a writer and editor for Business Insider's "The Road to Home" series, which won a Silver award from the National Associate of Real Estate Editors. She is also a Certified Educator in Personal Finance (CEPF).She has written about personal finance for over seven years. Before joining the Business Insider team, she was a freelance finance writer for companies like SoFi and The Penny Hoarder, as well as an editor at FluentU. You can reach Laura Grace at ltarpley@businessinsider.com.Learn more about how Personal Finance Insider chooses, rates, and covers financial products and services »
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In the article you provided, the key concepts revolve around Certificate of Deposit (CD) interest rates, specifically the highest available rates and considerations when choosing a CD. Here's a breakdown of the concepts used:
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CD Interest Rates Overview:
- The article discusses how banks have been increasing their CD interest rates over the past year.
- It provides average interest rates for 6-month and 1-year CDs, highlighting that many institutions offer higher rates.
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7% CD Rate Inquiry:
- The article poses a question about the worthiness of a 7% CD rate and explores whether any financial institutions are currently offering such rates.
- It mentions a local credit union in Michigan that previously offered a 7.19% APY on a 7-month CD special but notes that the offer has ended.
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Alternative High-Yield CD Options:
- While there are no current 7% CD rates mentioned, the article suggests that there are other banks offering high CD rates, potentially reaching 6% APY or more.
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Understanding a 7% Interest Rate on a CD:
- The article explains that a 7% APY on a CD means earning 7% on the balance over one year.
- It touches on the concept of compounding interest, with variations in how banks and credit unions compound interest.
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What to Look for in a CD:
- Factors to consider when selecting a CD are highlighted, including interest rate, term length, minimum opening deposit, and early withdrawal penalties.
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FAQs on CD Rates:
- The article addresses common questions, such as where to get 7% interest, the highest-interest paying CD, whether you can get 6% on a CD, and if there are CDs that pay 5%.
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Expert Author and Personal Finance Insider:
- The article concludes with information about the author, Laura Grace Tarpley, who is the Personal Finance Reviews Editor at Business Insider.
- Laura Grace Tarpley's credentials, including being a Certified Educator in Personal Finance (CEPF), are highlighted, adding credibility to the content.
In summary, the article provides a comprehensive guide for readers interested in maximizing their returns through CDs, offering insights into current rates, potential alternatives, and crucial factors to consider when choosing a CD.
