Locking In a 6.5% CD
Central-bank tightening pushed deposit yields to multi-decade highs, andsome certificate of deposit (CD) terms now advertise rates as lofty as6.5%. Yet forecasters expect the Federal Reserve to begin cutting rates as soon as May or June, meaning the current window could close quickly.
• A 6.5% annual percentage yield (APY) on a federally insured CDlocks in a fixed return until maturity even if market rates fall.• Average brick-and-mortar savings accounts pay just0.46%, so the yield spread is enormous.• Unlike high-yield savings accounts—whose variable rates can drop at any time—CDs guarantee today’s rate for the full term.
CBS News broke down the math for a one-year, 6.5% CD.
| Opening Deposit | Interest Earned in 12 mo | Ending Balance | % Return (simple) |
|---|---|---|---|
| $500 | $32.50 | $532.50 | 6.5% |
| $1,000 | $65.00 | $1,065.00 | 6.5% |
| $2,500 | $162.50 | $2,662.50 | 6.5% |
| $5,000 | $325.00 | $5,325.00 | 6.5% |
| $10,000 | $650.00 | $10,650.00 | 6.5% |
Source for figures: CBS News example calculations.
Using a Calculator
If you plan a different term or deposit, run the numbers with an online CD calculator. NerdWallet’s tool lets you input deposit, term, and APY, instantly projecting maturity value via a simple interface online CD calculator.
Who Actually Offers 6.5%?
High-street banks do not; you have to look to online institutions or credit unions willing to cap balances or restrict membership.
• Financial Partners Credit Union publishes an 8-month CD at 6.50% APY, but you must live or work in select Southern California counties and you cannot deposit more than $5,000.
• Business Insider notes that no other nationally available CD currently hits 6% , making FPCU the outlier among insured accounts that exceed the national average only credit union currently offering a 6% APY CD.
Alternatives Above 5%
If you cannot qualify for FPCU, several banks still pay north of 5 percent:
– CIBC Bank USA’s one-year CD offers 5.51% APY and is available nationwide with no balance cap.
– Signature FCU and Marcus by Goldman Sachs both field 9-month CDs over 5.3%, requiring only $500 to open competitive APYs.
Early-Withdrawal Penalties
Remember that breaking a CD early usually costs some of the interest you’ve accrued. CNBC Select explains that institutions calculate penalties based on principal, rate, and the number of days of interest forfeited penalty calculations usually depend on the CD's interest rate. No-penalty CDs trade a lower APY for the option to bail out without fees.
Strategies to Capture — and Keep — the Yield
1. Ladder Short Terms
A ladder staggers multiple maturity dates (for instance, 3-, 6-, and 9-month CDs). That technique lets you reinvest if rates rise while still locking a piece at 6.5%.
2. Split Funds for Liquidity
CBS News suggests placing emergency cash in a high-yield savings account while committing surplus dollars to a high-rate CD so you balance guaranteed returns and penalty-free access.
3. Consider Bump-Up or Step-Up CDs
Business Insider recommends bump-up or step-up products if you think rates may surge again because they embed future rate increases into the contract CDs with built-in rate increases.
Historical Context
Bankrate’s archives show that one-year CD yields averaged double-digits in the 1980s, collapsed below 1% after the Great Recession, and only rebounded after 2022’s rapid Fed hikes interest rate hikes by the Fed elevated yields. While 6.5% is not an all-time record, it is still extraordinary in the post-2000 era.
Step-by-Step: Opening a 6.5% CD
- Confirm eligibility (location, employer group, or other credit-union field of membership).
- Gather identification and funding source.
- Decide term and amount; remember FPCU’s $1,000 minimum and $5,000 maximum if aiming for the very top rate.
- Verify early-withdrawal penalty schedule.
- Open online or at a branch, and retain the deposit receipt and Truth-in-Savings disclosure.
Bottom Line
A 6.5% APY CD may not last long, but it offers a rare chance to lock in returns that outpace both headline inflation and nearly every liquid bank account on the market. Act quickly, mind the membership rules and balance caps, and you can secure high-yield, federally insured income through the next rate cycle.
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