This Savings Account Pays Over 6% APY. Is It Too Good to Be True?

Updated - First published on July 11, 2024

Emma Newbery

By: Emma Newbery

Many or all of the products here are from our partners that compensate us. It’s how we make money. But our editorial integrity ensures that our product ratings are not influenced by compensation. APY = Annual Percentage Yield.

KEY POINTS

  • The DCU Primary Savings account pays an APY of 6.17% on the first $1,000, and 0.15% after that.
  • If you have more than $1,000, you could earn more with a savings account that pays a higher rate on the whole balance.
  • Read the fine print before you open a high-yield savings account to ensure it's right for you.

If you have money in savings, you're hopefully riding today's wave of high interest rates. After years of low rates that didn't even keep up with inflation, it isn't unusual to see APYs of 4% or 5% right now. Indeed a couple of accounts, such as the Digital Federal Credit Union's (DCU) savings account, advertise rates of over 6%.

That's pretty impressive, especially since savings accounts are relatively safe and -- unlike with stock market investments -- those rates are guaranteed. However, you need to check the fine print with any high-yield savings account, and even more so with a super high-yield one.

Is the Digital Federal Credit Union Primary Savings too good to be true?

The Digital Federal Credit Union Primary Savings account pays a 6.17% APY on balances up to $1,000. There's a minimum of $5 to open the account and no minimum balance required to earn interest. Plus, it won't charge a monthly fee. If you have less than $1,000 in savings, the account could be a good choice. That's assuming you meet the credit union's eligibility requirements and are able to join.

The slight kicker is this: If your savings balance is higher than $1,000, you'll only earn an APY of 0.15% on the remaining balance. So if you have more money in the bank, you'll likely earn more interest with an account that pays a lower rate on the whole balance.

Our Picks for the Best High-Yield Savings Accounts of 2025

Product APY Min. to Earn
3.70%
Rate info Circle with letter I in it. 3.70% annual percentage yield as of March 6, 2025. Terms apply.
$0
Open Account for American Express® High Yield Savings

On American Express's Secure Website.

up to 3.80%²
Rate info Circle with letter I in it. You can earn the maximum APY by having Direct Deposit (no minimum amount required) or by making $5,000 or more in Qualifying Deposits every 30 days. See SoFi Checking and Savings rate sheet at: https://www.sofi.com/legal/banking-rate-sheet.
$0
3.70%
Rate info Circle with letter I in it. See Capital One website for most up-to-date rates. Advertised Annual Percentage Yield (APY) is variable and accurate as of Feb. 6, 2025. Rates are subject to change at any time before or after account opening.
$0
Disclaimers



SoFi disclosure:

¹ New and existing Checking and Savings members who have not previously enrolled in Direct Deposit with SoFi are eligible to earn a cash bonus of either $50 (with at least $1,000 total Direct Deposits received during the Direct Deposit Bonus Period) OR $300 (with at least $5,000 total Direct Deposits received during the Direct Deposit Bonus Period). Cash bonus will be based on the total amount of Direct Deposit. Direct Deposit Promotion begins on 12/7/2023 and will be available through 1/31/26. See full bonus and annual percentage yield (APY) terms at sofi.com/banking#1.

² SoFi members who enroll in SoFi Plus with Direct Deposit or by paying the SoFi Plus Subscription Fee every 30 days or with $5,000 or more in Qualifying Deposits during the 30-Day Evaluation Period can earn 3.80% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. Members without either SoFi Plus or Qualifying Deposits, during the 30-Day Evaluation Period will earn 1.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Only SoFi Plus members are eligible for other SoFi Plus benefits. Interest rates are variable and subject to change at any time. These rates are current as of 1/24/25. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet. See the SoFi Plus Terms and Conditions at https://www.sofi.com/terms-of-use/#plus.

³ We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Checking & Savings Fee Sheet for details at sofi.com/legal/banking-fees/.

⁴ SoFi Bank is a member FDIC and does not provide more than $250,000 of FDIC insurance per legal category of account ownership, as described in the FDIC’s regulations. Any additional

FDIC insurance is provided by the SoFi Insured Deposit Program. Deposits may be insured up to $2M through participation in the program. See full terms at SoFi.com/banking/fdic/terms

See list of participating banks at SoFi.com/banking/fdic/receivingbanks

⁵ We’ve partnered with Allpoint to provide you with ATM access at any of the 55,000+ ATMs within the Allpoint network. You will not be charged a fee when using an in-network ATM, however, third-party fees incurred when using out-of-network ATMs are not subject to reimbursement. SoFi’s ATM policies are subject to change at our discretion at any time.

⁶ Early access to direct deposit funds is based on the timing in which we receive notice of impending payment from the Federal Reserve, which is typically up to two days before the scheduled payment date, but may vary.

⁷ Overdraft Coverage is limited to $50 on debit card purchases only and is an account benefit available to customers with direct deposits of $1,000 or more during the current 30-day Evaluation Period as determined by SoFi Bank, N.A. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the“30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Members with a prior history of non-repayment of negative balances are ineligible for Overdraft Coverage.

Now, unlike a certificate of deposit (CD), the interest on a savings account is variable. Today's rates won't last forever. At some point, the Fed will start to lower interest rates and this will likely impact savings account APYs.

But for the sake of illustration, let's say you put $2,000 into the Digital Federal Credit Union Primary Savings account and it doesn't change its rates for a whole year. You'd earn $61.70 in interest on the first $1,000. But the second $1,000 would only earn you $1.50, taking your total interest to $63.20.

We can compare that to another account that pays 4.50% APY with $250+ in monthly deposits on the whole balance -- such as the LendingClub LevelUp Savings. Here's how much interest you'd earn in one year with different balances:

Balance Digital Federal Credit Union Primary Savings LendingClub LevelUp Savings
$1,000 $61.70 $50.00
$2,000 $63.20 $100.00
$5,000 $67.70 $250.00
$8,000 $72.20 $400.00
Data source: Author calculations. Assumes current rates do not change for one year.

The average American could earn over $300 more with a different savings account

The average American had $8,000 in their savings and checking accounts in 2022, according to the Federal Reserve. If that money is in a top high-yield savings account that pays an APY of 5%, it could earn $400 in interest in a year. That's $327.80 more than it would earn in the Digital Federal Credit Union Primary Savings account.

As with many financial products, there's no right or wrong answer. If you have a lower-than-average balance or plan to use other DCU products, its Primary Savings account could still be the right choice. DCU has another savings account with an APY that's as high as 3.56%, as well as a competitive checking account. Residents of New Hampshire and Massachusetts -- where DCU has branches -- will also get more out of its products.

Watch out for these savings account catches

Whenever you see a savings account or CD with a higher APY than its competitors, look closely before you sign up. Check for things like:

  • Monthly maintenance or other fees
  • Minimum deposit requirements
  • Minimum balance requirements
  • Limits on balances that earn high interest rates
  • Restrictions on withdrawals

Think about what you need and how you'll use the account. That includes things like how much you plan to save and what type of customer service you might require. If you're confident you'll meet any balance requirements to waive a fee or earn a higher interest rate, you'll have different priorities from someone who's just started to save.

Our Research Expert

Emma Newbery
Emma Newbery icon-button-linkedin-2x

Emma owns the English-language newspaper The Bogota Post. She began her editorial career at a financial website in the U.K. over 20 years ago and has been contributing to Motley Fool Money since 2019.