7% interest savings accounts: The fact and fiction of high APYs (2024)

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• Two credit unions pay over 7% APY on accounts right now: Landmark Credit Union and OnPath Rewards High-Yield Checking. However, these are both checking accounts with limitations on eligible balances.
• Plenty of high-yield savings accounts pay over 5% APY on your total balance without making you jump through hoops.
• Seethe 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 0.43% APY (Annual Percentage Yield), but many institutions are paying significantly higher rates — and two are even paying over 7% interest.

Is a 7% savings account 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?

There are not any banks offering 7% interest on a savings account right now. However, two financial institutions are paying at least 7% APY on checking accounts: Landmark Credit Union Premium Checking Account, and OnPath Rewards High-Yield Checking.

OnPath Credit Union High Yield Checking

OnPath Credit Union is offering up to 7.00% * APY on its OnPath Rewards High-Yield Checking Account. You'll earn the up to 7.00% * APY on balances up to $10,000 (balances above $10,000 will earn 0.50%).

You'll need to meet a few qualifications to be eligible. For one, you must log into your OnPath online or mobile banking account one or more times per statement cycle. You also need to enroll in e-statements and receive them for the eligible statement cycles. Finally, you must make 15 or more debit card purchases that post and settle during the statement cycle.

There's a minimum of $25 required to open a checking account.

To join OnPath Credit Union, you must live, work, worship, volunteer, or go to school in an eligible field of membership community in Louisiana; be an immediate relative of someone who is eligible to become a remember; work for or have retired from a company that partners with OnPath Rewards High-Yield Checking; or donate $5 to the OnPath Foundation.

Landmark Credit Union Premium Checking

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 may earn 0.06% to 7.50% APY.

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.

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.

• CloudBank 247 High Yield Savings Account: 5.26% APY
• UFB Secure Savings: 5.25% APY
• Valley Direct High Yield Savings Account: 4.80% 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