7% interest savings account: Is it real?

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It may be possible to find a 7% interest savings account, but an alternative might serve you better.

It may be possible to find a 7% interest savings account, but an alternative might serve you better.

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Interest rates on savings accounts have soared over the past year, reaching heights not seen in more than 15 years. In fact, the average interest rate on savings accounts has more than doubled this year alone, recently reaching 0.56%, according to Bankrate.

Online banks are offering even better rates — much better. Since online banks don’t have the overhead of brick-and-mortar institutions, it’s not unusual for them to offer an APY that tops 5.00%.

Five percent interest is excellent for a savings account. But can you find an account that offers more?

Enter the 7% interest savings account, a near-mythical offering not seen since the 1980s.

It is not impossible to get 7% interest on your deposits these days, but it’s not common either. More often than not, 7% interest rates are used as a marketing gimmick that comes with a lot of caveats.

Here’s what you need to know if you’re looking for the highest return on your savings.

Is the 7% interest savings account real?

Broadly speaking, yes, the 7% interest savings account is real. But technically — and we should get technical since we’re talking about your money — the two deposit products we know of offering 7% interest right now are not savings accounts. One is a checking account and the other a CD, and both require a little bit of caution.

Landmark Credit Union Premium checking account

  • 7.50% APY on balances up to $500
  • Must enroll in eStatements
  • Must make at least $250 in direct deposits a month

While Landmark’s premium checking account does offer 7.50% APY, it’s only on the first $500 you deposit in the account. That means you can earn a maximum of $39 in interest over the course of one year.

Every dollar counts, of course — but you could do much better with a savings account that offers 5.00% APY on balances greater than that. In fact, as long as you deposit at least $752 in an account with a 5.00% APY, your interest earnings would outpace what you’d get from Landmark.

Alpena Alcona Area Credit Union share certificate

  • 7.19% APY on 7-month share certificate (what credit unions call CDs)
  • Must deposit at least $500
  • $7,000 maximum deposit 
  • Interest compounds quarterly

Only a very limited number of people will be able to take advantage of Alpena Alcona’s 7.19% certificate offer since you must be a member of the credit union. Membership requirements include: living, working, owning real estate, going to school, or worshiping in Michigan; working at the credit union; having an immediate family member who’s part of the credit union; being a widow or widower of a former member (as long as you haven’t remarried).

In other words, very few people without a strong connection to the state of Michigan would be able to open one of these certificates. And then there’s this: If you deposit the maximum amount ($7,000) in a 1-year CD with a 5.00% APY, you will earn $61 more than you would in the 7-month CD with the higher rate.

Alternatives to a 7% interest savings account

While interest rates are high, it makes sense to consider your options for growing your money — even if a 7% interest savings account is out of reach. Some alternatives include:

High-yield savings accounts

As stated above, you can find 5.00% APY or greater at the best online banks these days. High-yield savings accounts are FDIC insured, just like their traditional counterparts, as long as you open one at an FDIC-member bank. That means your money will be protected up to $250,000 per depositor. 

High-yield savings accounts keep your savings liquid and are a great place to stash your emergency fund or save toward a short-term goal, like buying a car, going on vacation, or putting a down payment on a house.

Certificates of deposit

Rates on CDs are also some of the highest in recent memory. One-year CDs have the best rates right now, also upwards of 5.00%. As with a savings account, CDs are insured up to $250,000 per depositor.

There are a few things to consider with CDs: They guarantee a certain rate for the life of the term, but your money must stay put until the CD matures. If you take it out before then, you’ll most likely face an early withdrawal penalty equal to a portion of the interest. 

When the term is up, you’ll have about a week to decide whether you want to renew the CD, move the money to a different account, or withdraw it. If you do nothing, CDs typically renew automatically at the current rate.


Investing is the most reliable way to build wealth over time, though it’s not without risk. Unlike savings accounts or CDs, money you invest is not FDIC insured, so it’s possible you could lose some. That’s why it’s important to diversify among different types of investments.

Consider an employer-sponsored 401(k) tied to a target retirement date, and max out the company match. Brokerage accounts are also a solid gateway to investing for people who are starting to dip their toes in. 

Bottom line

It is possible to earn 7% interest on your deposits — but only in extremely limited circumstances. Instead, consider a high-yield savings account or CD for a secure way to grow your nest egg. If you have the risk tolerance, investing is the most potentially lucrative route to long-term wealth. Generally you’ll want to have a mix of deposits and investments for the greatest financial health.

Editorial Disclosure: All articles are prepared by editorial staff and contributors. Opinions expressed therein are solely those of the editorial team and have not been reviewed or approved by any advertiser. The information, including rates and fees, presented in this article is accurate as of the date of the publish. Check the lender’s website for the most current information.

This article was originally published on SFGate.com and reviewed by Lauren Williamson, who serves as the Home and Financial Services Editor for the Hearst E-Commerce team. Email her at [email protected].

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