A 770 savings account is an account that is claimed to earn between 30 and 40 percent more interest than other bank accounts, and allegedly withdrawals are tax free, according to Fox Business. The 770 account takes its name from the IRS code pertaining to life insurance contracts.
Essentially, a 770 account is a life insurance policy that is used as a savings account. When money is taken out of the account, it is, in effect, a loan that must be paid back to the account. Money taken out on loan is not taxable, but any interest made on the account is.