This Checking Account Offers an Amazing 7.5% APY -- But There's a Catch

These are good days to have money saved. It seems everywhere you look -- a billboard for a credit union, an online ad for a bank -- you'll find amazing annual percentage yield (APY) on bank accounts. Recently, in fact, I was shocked to see a bank account at Landmark Credit Union offering a 7.5% APY. Even more shocking -- it was a checking account.

Most checking accounts aren't interest-bearing. Even those that are typically pay at a rock-bottom rate, like 0.10%. So when I saw Landmark Credit Union offering the 7.5% on its Premium Checking account, I was in disbelief. And rightfully so, because when I read the fine print, it started to make sense.

The 7.5% APY has a limit on how much you can earn

Yes, Landmark Credit Union has a checking account that earns at an APY of 7.50%. But that 7.50% APY applies to balances up to $500. After your balance exceeds $500, your APY becomes 0.05%.

That fine print changes the promotion. If you only earn 7.5% on your first $500, you would get $37.50 in a 12 month period, or roughly $3.13 per month. That's not so bad if you only have $500 in your account, or if you'd like an interest-bearing checking account to earn a little extra on money that's constantly flowing through it.

But when we compare it to the best savings accounts, the Landmark Credit Union Premium Checking may not be the best value for your buck. For instance, let's say you deposit $1,000 in a savings account with a 5.30% APY. In a 12 month period, you would earn $53 -- about $15 more than the checking account.

Of course, you could deposit $500 in the Landmark Credit Union checking account and take the rest to another bank that offers no APY limits. But before you do, you should know this account is not available to everyone.

Interested? Just wait -- the Landmark Credit Union account has more restrictions

Like other credit unions, Landmark Credit Union requires membership before you can apply to its checking accounts. To join, you or your immediate family must live or work in Northeastern or Southern Wisconsin or Northeastern Illinois. Yes, that means that even if you live in Wisconsin or Illinois, you must still live in a qualifying county to join.

Additionally, this account requires direct deposits with a minimum of $250 and e-statements with a valid email address. That's an easy criteria to satisfy, unless you're self-employed and don't receive money in a way that would qualify as a direct deposit.

I don't meet the requirements. Where should I park my cash?

For those who aren't a resident of Northeastern or Southern Wisconsin or Northeastern Illinois, here are a few places you might want to park your savings.

• High-yield savings accounts: Many of the best high-yield savings accounts offer APYs over 5%. Some may come with debit or ATM cards, but many have restrictions on how many withdrawals you can make per month.
• Certificates of deposit (CD): Today's top-paying CDs are offering eye-watering APYs. CDs are great if you have savings you won't need in the near term, but might not be the best for cash you'll need on the fly, like an emergency fund.
• Money market account: Generally, money market accounts have high APYs, like high-yield savings accounts do, but often come with check-writing privileges and debit cards, like checking accounts do. They can be a great choice for cash you'll need to spend or for emergency funds.

If you do live in a qualifying county, the Landmark Credit Union Premium Checking account could be another tool to add to your mix. I would compare it with other checking accounts first, however. Even if you do get a 7.5% APY on your first $500, earning $37.50 per year is puny compared with the best bank bonuses on checking accounts.