Banks and credit unions offering 7% or close to it
A handful of banks and credit unions are currently offering rates at or near 7% on savings accounts and certificates of deposit (CDs). These are real accounts you can open today, though the exact rate depends on the account type, how much you deposit, and how long you lock the money away.
High-yield savings accounts at online banks like Marcus, Ally, and American Express Personal Savings have offered rates between 4.25% and 4.75% in recent months. Rates change weekly based on Federal Reserve decisions, so check the current rate before opening an account. Credit unions sometimes offer higher rates to members—some have paid 5% to 7% on savings accounts, but usually only on balances up to $500 or $1,000, and only if you meet membership requirements like direct deposit or a minimum number of debit card transactions per month.
Certificates of deposit (CDs) are the most reliable way to lock in a 7% rate. A CD is money you agree to leave untouched for a set period—typically three months to five years. If you withdraw early, you pay a penalty. Banks like Ally, Marcus, and Connexus Credit Union have offered 5-year CDs at rates between 4.5% and 5.3%, and some credit unions have gone higher. The longer you commit, the higher the rate usually is.
Key Takeaways
- Online banks and credit unions currently offer rates between 4% and 5.5% on savings accounts, with some credit unions paying higher rates on small balances if you meet membership requirements.
- Five-year CDs are the most common way to lock in rates near 7%, though the exact rate varies by institution and changes based on Federal Reserve policy.
- Money market accounts and promotional rates can sometimes reach 5% to 6%, but promotional rates usually drop after three to six months.
- Rates are not may provide and change frequently—what you see today may be different next week, so compare current offers before committing your money.
- Any account insured by the FDIC or NCUA protects your money up to $250,000 if the bank or credit union fails.
Why 7% is harder to find than it used to be
In 2023 and early 2024, when the Federal Reserve was raising interest rates to fight inflation, some banks and credit unions briefly offered rates at or above 7%. Those rates have fallen as the Fed has started lowering its own rates. A 7% savings account is now rare; a 7% CD is possible but requires shopping carefully and committing your money for several years.
The rate you see advertised is the annual percentage yield (APY). This is the real return you get after the bank compounds interest—usually daily or monthly. A 5% APY means you earn 5% per year on your balance, not 5% once and then nothing. The higher the APY, the faster your money grows, but only if you leave it alone.
Money market accounts and promotional rates
Money market accounts sit between savings accounts and checking accounts. They usually pay higher interest than regular savings but require a larger opening deposit—often $2,500 to $10,000. Some money market accounts have paid 5% to 6% APY in recent months, though rates vary widely.
Banks also run promotional rates to attract new customers. A bank might offer 5.35% APY for the first three months, then drop to 4.5% after that. Read the fine print carefully: some promotions apply only to new customers, some require direct deposit, and some cap how much money qualifies for the higher rate. A promotional rate can be worth it if you're moving money anyway, but don't expect it to last.
Credit union membership and higher rates
Credit unions are member-owned and sometimes offer better rates than banks because they don't have shareholders to pay. Some credit unions have offered 7% or higher on savings accounts, but usually with strings attached. You might need to maintain a minimum balance, set up direct deposit, make a certain number of debit card transactions per month, or keep a checking account open at the same credit union.
The rate also usually applies only to the first $500 or $1,000 of your balance. Money above that earns a lower rate. Before opening a credit union account, ask exactly what you have to do each month to earn the advertised rate, and whether the rate is may provide or can change. Credit union accounts are insured by the NCUA (National Credit Union Administration) up to $250,000, the same as FDIC insurance at banks.
How to compare rates across institutions
Interest rates change constantly. A site like Bankrate, DepositAccounts, or the Federal Reserve's own rate tracker shows current APY offers from dozens of banks and credit unions. You can filter by account type (savings, money market, CD), term length (for CDs), and minimum deposit. These sites don't sell anything—they just list what's available.
When comparing, look at the APY, not just the interest rate. Look at the minimum deposit required and whether there are monthly fees. Check whether the rate is promotional or permanent. For CDs, note the early withdrawal penalty—some charge three months of interest, others charge a percentage of the balance. A CD with a lower rate but no penalty might be better than one with a high rate and a steep penalty if you think you might need the money.
The risk of chasing the highest rate
The highest rate is not always the best deal. A bank offering 5.5% might require a $25,000 minimum deposit and charge $10 per month if your balance falls below that. Another bank offering 5.25% might have no minimum and no fees. Over a year, the second bank could pay you more after fees.
Also consider how stable the institution is. Large banks like Ally and Marcus are backed by major financial companies. Smaller credit unions are real and insured, but if you're moving a large sum, check that the institution is FDIC or NCUA insured and that your balance will be covered. Insurance covers up to $250,000 per account holder per institution, so if you have more than that, split it across multiple banks.
What happens to your money after you deposit it
Once you open a savings account or CD, the bank or credit union holds your money and pays you interest on a schedule—usually daily or monthly. You can watch your balance grow through the bank's website or app. For a regular savings account, you can withdraw money anytime without penalty. For a CD, you cannot touch the money until the term ends without paying an early withdrawal fee.
Interest is taxed as income. If you earn $500 in interest in a year, you'll report that on your tax return. The bank will send you a 1099-INT form in January showing how much interest you earned. This is one reason high-yield accounts are better than keeping money in a checking account that pays nothing—you're earning money anyway, so you might as well earn as much as the bank will pay.
Frequently Asked Questions
Can I get 7% on money I need to access quickly?
Not reliably. High-yield savings accounts currently pay 4% to 5%, and you can withdraw anytime. CDs pay more but lock your money away. If you need access, a high-yield savings account is your best option, even if the rate is lower than a CD.
What's the difference between APY and interest rate?
Interest rate is the percentage the bank pays. APY is the real return after the bank compounds interest (adds earned interest back into your account so it earns interest too). APY is always equal to or higher than the interest rate. Always compare APY, not interest rate.
Is my money safe in a high-yield savings account?
Yes, if the bank is FDIC insured. FDIC insurance protects up to $250,000 per account holder per bank if the bank fails. Credit unions are insured by the NCUA up to the same amount. Check the bank's website or call to confirm it's insured before depositing.
What happens if rates drop after I open a CD?
Your rate stays the same for the entire CD term. If you lock in 5% for five years and rates drop to 2%, you still earn 5%. This is why CDs are useful when rates are high—you lock in the good rate before it falls.
Can I move money between banks to chase higher rates?
Yes, but watch for fees. Some banks charge to close an account if you close it within a certain time (often 90 days to six months). Read the terms before opening. Moving money between banks takes one to three business days, so plan ahead if you need the money on a specific date.