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- Landmark Credit Union pays 7.50% APY on its high-yield checking account right now.
- But the credit union only pays a high rate on balances up to $500, and you have to meet certain criteria to qualify.
- Plenty of high-yield savings accounts pay over 5% APY on your total balance without making you jump through hoops.
- See the best saving account rates »
Banks have been increasing their savings rates for well over a year now. The average interest rate on a savings account is 0.42% APY (Annual Percentage Yield), but many institutions are paying significantly higher rates — and one is even paying over 7% interest.
Is a 7% APY rate worth it? Learn more about how a 7% interest rate savings account works, and whether you should bother opening an account with such a high rate.
Which bank gives 7% interest on a savings account?
Right now, only one financial institution is paying at least 7% APY: Landmark Credit Union. Landmark pays 7.50% on its Premium Checking Account — however, there are some major caveats to consider.
First, keep in mind that this is a checking account, not a savings account. Second, you have to enroll in e-statements and receive $250 in direct deposits each month to qualify for the 7.50% interest rate.
Finally, you'll only earn 7.50% on balances up to $500. As Landmark compounds interest monthly, this means you'll only earn a little under $40 on $500 in an entire year. Balances over $500 only earn 0.11% APY, well under the national average.
Overall, the 7.50% APY account with Landmark Credit Union probably isn't worth opening. You'll earn more with an account that pays a slightly lower rate, but on higher balances — maybe even on your entire account balance.
Note that as of August, there is also a CD paying over 7% APY: Michigan-based Alpena Alcona Area Credit Union is offering members a 7-month CD special paying 7.19% APY.
What does a 7% interest rate on a savings account mean?
When an account pays 7% APY, you'll earn 7% on your balance over a 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 can compound interest daily, monthly, quarterly, or annually — and the more often it compounds 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.
A 7% APY savings account may pay interest on all of the money in your account. Or you might earn 7% on just a portion of your balance, or only earn interest if you meet certain requirements. Before opening a savings account for its high interest rate, be sure you understand the bank's rules.
Alternative high-yield savings account options
Although no savings accounts pay 7% right now, there are plenty that pay high rates on your entire balance. The following accounts are great alternatives to Landmark's checking account, and they don't make you meet requirements every month to earn their high rates.
- Betterment Cash Reserve: 5.50% APY for new customers; 4.75% APY standard rate
- Milli Savings Account: 5.25% APY on Savings Account and Jars
- UFB High Yield Savings: 5.25% APY
- Western Alliance Bank High Yield Savings Account, powered by Raisin: 5.25% APY
What to look for in a high-interest savings account
Selecting a high-yield savings account is an important decision. Here are factors to consider when making your choice:
- Interest rate: Look at the account'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, and if you earn interest on your total balance.
- Fees: Monthly service fees can easily cancel out any interest you earn on your savings account. The best online banks don't charge monthly fees.
- Minimum opening deposit: Some banks don't require any money to open a savings account, while others require thousands. Regardless of the amount, make sure you can afford the opening deposit.
7% APY savings accounts: FAQs
No, there is not a savings account that pays 7% APY right now. The Landmark Credit Union Premium Checking Account pays 7.50% APY, but only on balances up to $500. If you keep more than $500 in your account, you're better off opening a high-yield savings account that pays a slightly lower rate on your total balance.
Yes, some CDs pay 7% APY. The top CD rates change frequently and sometimes may pay 7% APY. We check rates daily to find the best CD rates for a variety of terms.
Betterment Cash Reserve currently pays the highest interest rate, which is 5.50% APY for new customers through the end of 2023.
Yes, you must declare interest earned in any bank account when you file taxes.
You won't earn 10% interest in any bank account. You might be able to earn 10% by investing in assets such as stocks or real estate, but the markets are unpredictable and there's no guarantee.
Products in this post: Landmark Credit Union Premium Checking Account, Alpena Alcona Area Credit Union 7-month certificate Betterment Cash Reserve Account,Milli Savings AccountUFB High Yield Savings,Western Alliance Bank High Yield Savings Account,Bask Bank Interest Savings Account,CIT Bank Platinum SavingsVio Bank Cornerstone Money Market Savings Account
