If you’ve seen ads promising 7% interest, you might think it’s a scam. It isn’t – but the offers are limited and come with trade‑offs. Below you’ll find the real places that can deliver that kind of return, plus the checks you need to run before you lock your cash away.
High‑yield savings accounts from challenger banks sometimes post rates near 7% for a short promotional window. They’re easy to open online, and the money stays liquid, but the rate can drop after three to six months. Make sure the bank is FCA‑protected and read the fine print about minimum balances.
Fixed‑rate bonds from specialist lenders also hit the 7% mark. These are usually 1‑ to 3‑year products where you agree not to touch the cash until the bond matures. The downside? Early withdrawal often means a penalty, and the interest you earn is taxable unless the bond is held inside an ISA.
Peer‑to‑peer lending platforms let you fund personal or small‑business loans directly. Some portals advertise 7%‑plus returns because they match borrowers with higher risk profiles. The risk of default is real, so spread your money across many loans and keep the total exposure low.
Corporate bonds from solid UK companies can sometimes offer 7% yields, especially if the bond has a longer term or a lower credit rating. These are traded on the bond market, so you can sell before maturity, but price fluctuations could eat into your return.
Finally, credit union term deposits in some regions still carry rates around 7% for a fixed term. Credit unions are member‑owned, so you’ll need to meet membership criteria, but they often provide a safe, community‑focused alternative.
High rates usually mean higher risk. Ask yourself if you can afford to lock the money away for the full term – any early pull‑out could cost you more than you’d gain. Check the FCA registration of any firm or platform. If it isn’t regulated, you have no safety net if the provider fails. Look at the tax implications. Interest earned outside an ISA is added to your taxable income, which can push you into a higher tax band. Read the fees and penalties. Some accounts charge a fee for withdrawing early or for moving the money to another product. Finally, compare the effective annual rate (EAR) rather than just the headline rate. A 7% rate with monthly compounding yields more than a simple 7% paid annually.
Bottom line: 7% interest is possible, but you need to do the homework. Use a comparison site, write down the lock‑in period, fees, and tax treatment, then match those details to your personal cash flow and risk comfort. When you line up a product that fits, you’ll feel confident that your money is working as hard as it can.
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