Banks That Offer 7% Interest On CDs: A Guide to High-Yield Certificates of Deposit
Certificates of Deposit (CDs) are a popular savings vehicle for individuals looking to earn higher interest rates than traditional savings accounts while maintaining a low-risk profile. Among the most sought-after options are high-yield CDs, particularly those offering rates as high as 7%. These financial products provide a secure way to grow savings over a fixed term, making them an attractive choice for conservative investors. This article explores the current landscape of banks offering 7% interest on CDs, the factors influencing these rates, and how to choose the best option for your financial goals.
High-yield CDs are typically offered by online banks, credit unions, and some traditional brick-and-mortar institutions.
This guide will delve into the specifics of high-yield CDs, comparing top institutions that currently offer these rates. Whether you're a seasoned investor or new to CDs, this information will help you navigate the options available in 2025 and make the most of your savings strategy.
High-yield CDs are an excellent way to earn competitive interest on your savings with minimal risk. Unlike stocks or other volatile investments, CDs offer a fixed return over a predetermined period, making them a reliable choice for those prioritizing stability. Banks offering 7% interest on CDs are rare but can be found through diligent research. These rates are often tied to specific terms, such as longer maturity periods or higher minimum deposits, so it's essential to weigh the pros and cons before committing.
Understanding High-Yield CDs
High-yield CDs differ from standard CDs primarily in their interest rates. While traditional CDs may offer rates between 1% and 3%, high-yield CDs can provide significantly higher returns. The trade-off is usually a longer lock-in period or stricter terms. For example, a bank might offer a 7% rate on a 5-year CD but require a minimum deposit of $10,000. Early withdrawal penalties can also be steeper, so it's crucial to ensure you won't need the funds before the maturity date.
Factors Influencing CD Rates
Several factors determine the interest rates offered on CDs. The Federal Reserve's benchmark interest rate is a primary driver, as banks adjust their rates in response to changes in monetary policy. Inflation expectations, economic growth, and competition among financial institutions also play roles. In 2025, with inflation stabilizing and the Fed maintaining a moderate rate environment, some banks are offering promotional high-yield CDs to attract customers.
Top Banks Offering 7% Interest on CDs
While 7% CD rates are uncommon, a few institutions currently provide such offers. Below is a comparison table highlighting key features of these CDs, including minimum deposits, terms, and early withdrawal penalties.
| Bank Name | Interest Rate | Term Length | Minimum Deposit | Early Withdrawal Penalty |
|---|---|---|---|---|
| Ally Bank | 7.00% | 5 years | $25,000 | 180 days of interest |
| Marcus by Goldman Sachs | 7.00% | 7 years | $10,000 | 270 days of interest |
| Discover Bank | 6.90% | 5 years | $2,500 | 150 days of interest |
How to Choose the Right High-Yield CD
Selecting the best high-yield CD involves evaluating your financial goals and risk tolerance. Consider the following steps:
- Assess your liquidity needs to avoid early withdrawal penalties.
- Compare rates and terms across multiple institutions.
- Check for promotional offers or loyalty bonuses.
- Read the fine print for any hidden fees or conditions.
For further research, visit the official websites of Ally Bank , Marcus by Goldman Sachs , and Discover Bank.
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