7% interest exists, but only in specific places and only if you meet the conditions

You can get 7% interest on your money through high-yield savings accounts, money market accounts, and certificates of deposit (CDs) at certain banks and credit unions. The rate depends on where you look, how much you deposit, and how long you lock the money away. Rates change constantly—what pays 7% today may pay 5% next month—so the real question is not whether 7% exists, but where to find it right now and what you have to do to keep it.

The banks offering these rates are mostly online banks and smaller regional institutions, not the Chase or Bank of America branches you see on the street. Online banks have lower overhead costs, so they pass higher rates to depositors. Credit unions sometimes offer better rates to members than banks do, but you have to join first and meet their membership rules.

Key Takeaways

  • High-yield savings accounts at online banks currently offer rates between 4% and 5.3%, while some money market accounts and CDs reach 5% to 5.5%, depending on the bank and deposit term.
  • Rates change weekly or monthly based on Federal Reserve decisions, so a rate that is 7% today may drop to 4% within months.
  • You need to compare rates across multiple banks because the difference between 4% and 5.5% on $10,000 is $150 per year in actual money.
  • CDs lock your money for a set period—three months to five years—and charge a penalty if you withdraw early, so only use them for money you will not need.
  • Credit unions sometimes pay higher rates than banks, but you must meet membership requirements and keep a minimum balance.

High-yield savings accounts that currently pay 4% to 5.3%

A high-yield savings account (HYSA) is a regular savings account at an online bank that pays much more interest than a traditional bank. You can deposit money, withdraw it whenever you want, and the interest compounds daily. The catch is that the rate is not fixed—it moves up or down based on what the Federal Reserve does with interest rates.

Banks like Marcus by Goldman Sachs, Ally Bank, American Express Personal Savings, and Discover Bank have historically offered rates in the 4% to 5.3% range. These rates are real and available to anyone with a Social Security number and a way to fund the account. You do not need a minimum balance at most of them, though some require $25,000 or more to get the highest rate.

The rate you see advertised is the Annual Percentage Yield (APY), which includes compounding. On $10,000 at 5%, you earn about $500 per year. The money stays liquid—you can move it to another bank or withdraw it without penalty, though transfers take one to three business days.

Money market accounts that pay 5% to 5.5%

A money market account is a hybrid between a savings account and a checking account. You earn interest like a savings account, but you can write checks or use a debit card like a checking account. The interest rates are often slightly higher than savings accounts because the bank can use the money more flexibly.

Money market accounts at online banks like Ally, Marcus, and Vanguard have paid rates between 5% and 5.5% in recent months. The rules vary by bank: some let you write unlimited checks, others limit you to six withdrawals per month. Some require a higher minimum balance—$2,500 to $25,000—to earn the advertised rate.

The advantage over a savings account is flexibility. The disadvantage is that rates on money market accounts sometimes lag behind savings account rates, and the withdrawal limits can be annoying if you need to access your money frequently. Check the specific bank's rules before you open one.

Certificates of deposit (CDs) that lock in 5% to 5.5%

A CD is a time deposit. You give the bank your money for a fixed period—three months, six months, one year, three years, or five years—and the bank pays you a set interest rate for that entire period. The rate does not change, even if the Federal Reserve cuts rates the next month. That stability is the main reason to use a CD.

CDs at online banks have paid 5% to 5.5% for one-year and two-year terms in recent months. A five-year CD might pay slightly less, around 4.5% to 5%, because the bank is locking in a lower rate for longer. The interest compounds daily and is added to your account at maturity.

The critical rule: if you withdraw money before the CD matures, you pay an early withdrawal penalty. The penalty is usually three to six months of interest, which can wipe out your gains if you pull the money out early. Only put money in a CD if you are certain you will not need it for the full term.

Credit unions that sometimes pay higher rates

Credit unions are member-owned financial institutions that sometimes pay higher interest rates than banks because they do not have shareholders demanding profits. Some credit unions offer savings accounts or money market accounts that pay 6% to 7% or higher, especially on smaller balances.

The catch is membership. You have to join the credit union first, which usually means living in a certain area, working for a certain employer, or belonging to a certain organization. Some credit unions have opened membership to anyone, but most still have restrictions. You also typically have to keep a minimum balance—often $500 to $1,000—to earn the advertised rate.

To find credit unions near you, search the CO-OP Network or Alliant Credit Union's website. Call and ask what rates they currently pay and what the membership requirements are. If you can join and meet the minimum balance, a credit union account might be your best option for 7% or close to it.

Why 7% is rare and what changed

In 2023 and early 2024, some credit unions and online banks did pay 7% or higher on savings accounts, usually on balances under $5,000. Those rates have mostly disappeared as the Federal Reserve has held interest rates steady and banks have competed less aggressively for deposits. The highest rates you will find now are typically 5% to 5.5%.

Interest rates move based on Federal Reserve policy. When the Fed raises its benchmark rate, banks raise the rates they pay on savings. When the Fed cuts rates or holds them steady, banks lower what they pay. You cannot control this, but you can watch the Fed's announcements and move your money to a higher-paying bank when rates drop—there is no penalty for moving money out of a savings account or money market account.

If you want to chase the highest available rate, use a rate-tracking website like DepositAccounts.com or BankRate.com to see what banks are paying right now. Rates change weekly, so what is highest today may not be highest next week. The difference between 4.5% and 5.5% on $50,000 is $500 per year, so it is worth checking.

How to compare and move your money

Start by listing the banks and credit unions you are considering. Write down the APY, the minimum balance required, any fees, and the withdrawal rules. Then calculate what you would earn in one year on your actual balance. On $25,000 at 5%, you earn $1,250. On the same amount at 4%, you earn $1,000. That $250 difference is real money.

Once you choose a bank, opening an account takes 10 to 15 minutes online. You will need your Social Security number, a government ID, and a way to fund the account—usually a bank transfer from another account. The bank will ask you to verify your identity, which may involve answering security questions or confirming a small deposit.

Moving money between banks is free and takes one to three business days. You can set up an external transfer through your new bank's website, or ask your old bank to send the money. There is no penalty for closing an old account or moving your money, so do not feel locked in. If a better rate appears at another bank next month, move it.

Frequently Asked Questions

Is 7% interest may provide to stay at 7%?

No. Interest rates on savings accounts and money market accounts change whenever the bank decides to change them, usually based on Federal Reserve policy. A CD locks in a rate for the full term, so 7% on a one-year CD stays 7% for that year. But savings accounts and money market accounts can drop to 4% or lower within months.

Do I have to pay taxes on the interest I earn?

Yes. Interest earned on savings accounts, money market accounts, and CDs is taxable income. The bank will send you a 1099-INT form at the end of the year showing how much interest you earned. You report this on your tax return. If you earn more than $10 in interest, the bank must report it to the IRS.

What happens if the bank fails and I lose my money?

Deposits at banks insured by the FDIC (Federal Deposit Insurance Corporation) are protected up to $250,000 per account holder per bank. Deposits at credit unions insured by the NCUA (National Credit Union Administration) are also protected up to $250,000. If the bank or credit union fails, the FDIC or NCUA pays you back. This protection is automatic—you do not have to do anything.

Can I earn 7% without locking my money away?

Probably not right now. The highest rates on liquid savings accounts and money market accounts are currently 5% to 5.5%. Some credit unions still offer 6% to 7% on savings accounts, but usually only on balances under $5,000 and only if you meet their membership requirements. Check your local credit unions to see what they offer.

What is the difference between APY and APR?

APY (Annual Percentage Yield) includes the effect of compounding—interest earned on interest. APR (Annual Percentage Rate) does not. For savings accounts, always look at APY because that is what you actually earn. APR is used for loans and credit cards, not savings.