How much interest will I get if I put $10000 in a savings account?
If you have $10,000 to invest, here's what your earnings would be at different interest rates: After one year with a regular account at 0.42%: $10,042.00. After one year with a high-yield account at 4.50%: $10,450.00. After one year with a high-yield account at 5.00%: $10,500.00.
If you have $10,000 to invest, here's what your earnings would be at different interest rates: After one year with a regular account at 0.42%: $10,042.00. After one year with a high-yield account at 4.50%: $10,450.00. After one year with a high-yield account at 5.00%: $10,500.00.
How much interest can you earn on $10,000? In a savings account earning 0.01%, your balance after a year would be $10,001. Put that $10,000 in a high-yield savings account that earns 5% APY for the same amount of time, and you'll earn about $500.
The rate environment is favorable
On a $10,000 deposit, that would equate to $500 after one year. That's a substantial amount of interest, and it dwarfs the minimal 0.46% that most savers are currently getting with their regular savings accounts.
You want to know your total interest payment for the entire loan. To start, you'd multiply your principal by your annual interest rate, or $10,000 × 0.05 = $500. Then, you'd multiply this value by the number of years on the loan, or $500 × 5 = $2,500.
Year | Return | Ending balance |
---|---|---|
1 | $800 | $10,800 |
5 | $4,693 | $14,693 |
10 | $11,589 | $21,589 |
20 | $36,610 | $46,610 |
Top Nationwide Rate (APY) | Balance at Maturity | |
---|---|---|
1 year | 6.18% | $ 10,618 |
18 months | 5.80% | $ 10,887 |
2 year | 5.60% | $ 11,151 |
3 year | 5.50% | $ 11,742 |
Having extra cash in the bank is an excellent way to plan ahead for unexpected financial concerns. For many people, $10,000 is a solid amount of money to have in their emergency fund. If you're saving for emergencies, you should keep your money in a high-yield savings account to maximize the interest you earn.
“With a nest egg of $100,000, that would only cover two years of expenses without considering any additional income sources like Social Security,” Ross explained. “So, while it's not impossible, it would likely require a very frugal lifestyle and additional income streams to be comfortable.”
A stocks and shares ISA is likely to be most suitable. That is unless you will turn 55 within 30 years, in which case a pension might be a better tax wrapper for you. If you're unsure about the time horizon, you could invest in both a pension and a stocks and shares ISA.
Can you ever lose your money with high-yield savings account?
Safety: As noted, most high-yield savings accounts are either FDIC or NCUA insured for up to $250,000. Moreover, as deposit accounts, they're not susceptible to the ebbs and flows of the market, so there's little to no chance you'll lose the money you deposit into one.
Putting $10,000 into a short-term CD right offers solid – if perhaps not spectacular – returns for virtually no risk. If you have money you don't think you'll need to access imminently, a short-term CD is a great choice.
The cons of high-yield savings accounts
Interest rates on high-yield savings accounts are variable and can fluctuate at any time, so while a bank may advertise a high annual percentage yield (APY) when you apply, it likely won't last forever.
18, 2023, the average interest rate for a 1-year CD is 1.76%, more than double the 0.45% average rate reported for savings accounts. The best CD rates, as you'll see below, are considerably higher, with some APRs exceeding 5%. Here's a closer look at how CD accounts work and how much you can earn from a CD investment.
Interest can compound annually, quarterly, monthly, or even daily—the more often interest compounds, the faster your balance grows. For example, say you deposited $10,000 in a high-yield savings account with a 3% APY that compounds annually. At the end of a year, you'd have $10,300.00 in your account.
That's up to each issuer. In practice, however, most CDs compound either daily or monthly. The more frequent the compounding, the more interest your interest will earn. The frequency with which your CD compounds is reflected in the annual percentage yield (APY) that the CD's issuer promises you when you buy a CD.
Imagine you wish to amass $3000 monthly from your investments, amounting to $36,000 annually. If you park your funds in a savings account offering a 2% annual interest rate, you'd need to inject roughly $1.8 million into the account.
Historically, the stock market has an average annual rate of return between 10–12%. So if your $1 million is invested in good growth stock mutual funds, that means you could potentially live off of $100,000 to $120,000 each year without ever touching your one-million-dollar goose.
Plus, you can often earn more in a six-month CD than you would in a high-yield savings account. Six-month CDs are worth it if you know you need to make a major purchase within the year and want to earn as much interest as possible on your money without putting it at risk.
That said, here's how much you could expect to make by depositing $20,000 into a one-year CD now, broken down by four readily available interest rates (interest compounding annually): At 6.00%: $1,200 (for a total of $21,200 after one year) At 5.75%: $1,150 (for a total of $21,150 after one year)
Why you should put $15,000 into a 1 year CD now?
With such high interest rates, the earnings on CDs are impressive. You'll earn $850.50 for a total of $15,850.50 after one year when you open a $15,000 1-year CD with Popular Direct when calculating the returns at current rates.
- Open a high-yield savings account. Vitalii Vodolazskyi/Adobe. ...
- Convert your spare room into an Airbnb rental. ...
- Invest with a real estate investment trust (REIT) ...
- Invest in dividend-paying stocks. ...
- Open an individual retirement account (IRA) ...
- Look into U.S. Treasury bonds. ...
- Put some money into a CD. ...
- Pay off your student loans.
You can pretty easily piece together a diversified portfolio of low-cost index funds or exchange-traded funds with $10,000. Index funds, a type of mutual fund, typically have an investment minimum, but $10,000 is more than enough to buy into several. ETFs are a kind of index fund that trades like a stock.
Most financial experts suggest you need a cash stash equal to six months of expenses: If you need $5,000 to survive every month, save $30,000. Personal finance guru Suze Orman advises an eight-month emergency fund because that's about how long it takes the average person to find a job.
For an interest-only retirement, you'll need to have a large nest egg. How big a nest egg depends on your target income and the interest rate. For example, an annual income of $48,000 would require a nest egg of $1.6 million, assuming a 3% interest rate.
References
- https://www.thetimes.co.uk/money-mentor/investing/investing-basics/how-to-invest-10k
- https://www.investopedia.com/ask/answers/020515/how-are-yields-taxed-certificate-deposit-cd.asp
- https://www.cbsnews.com/news/how-much-100000-earns-in-a-high-yield-savings-account/
- https://www.nolo.com/legal-encyclopedia/financial-institution-fails-acquired-29945.html
- https://www.investopedia.com/ask/answers/what-is-the-rule-72/
- https://www.bankrate.com/banking/mma/money-market-account-guide/
- https://www.cusocal.org/Learn/Financial-Guidance/Blog/Money-market-account-pros-and-cons
- https://www.cuemath.com/questions/what-is-the-future-value-of-10000-on-deposit-for-5-years-at-6-simple-interest/
- https://www.forbes.com/advisor/banking/cds/best-6-month-cd-rates/
- https://am.jpmorgan.com/us/en/asset-management/liq/resources/investment-academy/evaluating-risk/Money-market-fund-risks/
- https://www.investopedia.com/ask/answers/12/safest-place-for-money.asp
- https://time.com/personal-finance/article/money-market-vs-savings-account/
- https://www.fool.com/the-ascent/banks/articles/heres-how-much-interest-can-you-earn-on-10000-in-savings/
- https://www.unfcu.org/financial-wellness/50-30-20-rule/
- https://www.cusocal.org/Learn/Financial-Guidance/Blog/Can-money-market-accounts-lose-money
- https://www.centier.com/resources/articles/is-your-money-stuck-in-a-money-market-account
- https://medium.com/@dontworkanotherday/how-to-turn-50k-into-100k-tips-to-double-50k-cac46fbf5558
- https://www.cuemath.com/questions/if-you-invest-10000-today-at-10-interest-how-much-will-you-have-in-10-years/
- https://www.cbsnews.com/news/why-you-should-deposit-10000-into-a-high-yield-savings-account-now/
- https://talkmarkets.com/content/how-much-money-do-i-need-to-invest-to-make-3000-a-month?post=431352
- https://www.visualcapitalist.com/visualizing-the-investments-of-the-ultra-wealthy/
- https://www.screener.in/screens/797657/stock-doubling-every-3-years/
- https://www.physicianonfire.com/how-to-invest-100k/
- https://www.forbes.com/advisor/banking/money-market-account/are-money-market-accounts-safe/
- https://www.cnn.com/cnn-underscored/money/are-money-market-accounts-safe
- https://www.ramseysolutions.com/retirement/can-you-retire-on-1-million
- https://www.nerdwallet.com/article/banking/how-much-interest-can-i-earn-on-100-1k-or-10k
- https://www.experian.com/blogs/ask-experian/can-you-lose-money-in-money-market-account/
- https://www.fool.com/the-ascent/buying-stocks/articles/heres-how-much-money-you-could-have-if-you-invested-1000-a-month-for-20-years/
- https://www.nerdwallet.com/article/banking/money-market-vs-cd
- https://homework.study.com/explanation/how-long-would-it-take-1-000-to-double-if-it-were-invested-in-a-bank-that-pays-6-per-year.html
- https://www.consumerfinance.gov/ask-cfpb/what-is-a-money-market-account-en-1007/
- https://www.businessinsider.com/personal-finance/5-percent-interest-savings-accounts
- https://finance.yahoo.com/news/income-level-considered-rich-140003986.html
- https://www.cnbc.com/select/rule-of-72-what-it-is-how-to-calculate-it/
- https://www.nerdwallet.com/calculator/compound-interest-calculator
- https://www.fool.com/investing/2021/10/26/how-the-stock-market-could-turn-25000-into-436235/
- https://www.bankrate.com/banking/cds/how-much-100000-could-earn-you-1-year-cd/
- https://www.livemint.com/money/personal-finance/how-fast-can-you-double-your-money-with-ppf-mutual-funds-bank-fixed-deposits-rule-of-72-explains-11695454734074.html
- https://www.helloplaybook.com/learn/how-much-money-do-you-need-to-live-off-interest
- https://www.synchronybank.com/blog/how-does-a-money-market-account-work/
- https://www.thebalancemoney.com/how-much-cash-should-i-keep-in-my-portfolio-357127
- https://money.usnews.com/investing/articles/the-rule-of-72
- https://smartasset.com/investing/how-much-interest-does-10000-earn-in-a-year
- https://www.investopedia.com/financial-edge/0711/how-to-double-your-money-every-6-years.aspx
- https://finance.yahoo.com/news/much-cash-keep-home-times-180337690.html
- https://fortune.com/recommends/banking/savings-account-calculator/
- https://www.cbsnews.com/news/why-you-should-put-10000-into-a-short-term-cd-right-away/
- https://www.cnbc.com/2023/12/01/money-market-funds-may-deliver-a-surprise-tax-bill-amid-higher-yields.html
- https://smartasset.com/financial-advisor/where-do-millionaires-keep-their-money
- https://www.schwab.com/legal/account-protection
- https://www.etftrends.com/monthly-income-channel/money-market-funds-great-until-tax-time/
- https://www.unbiased.com/discover/retirement/retire-on-700k
- https://www.cnn.com/cnn-underscored/money/best-money-market-mutual-funds
- https://www.fool.com/the-ascent/banks/articles/this-is-how-much-money-you-can-make-with-10k-in-a-high-yield-savings-account/
- https://www.cbsnews.com/news/how-much-is-too-much-money-for-a-high-yield-savings-account/
- https://www.investopedia.com/articles/personal-finance/040915/how-much-cash-should-i-keep-bank.asp
- https://www.nerdwallet.com/article/banking/money-market-account-vs-savings-account-which-should-you-choose
- https://www.latimes.com/compare-deals/banking/savings/7-percent-interest-savings-accounts
- https://smartasset.com/investing/how-much-interest-can-50000-earn-per-year
- https://www.math.uni.edu/~campbell/mdm/comp.html
- https://www.debtfreedr.com/how-to-turn-100k-into-a-million/
- https://www.nerdwallet.com/article/investing/best-ways-invest-10000
- https://moneytalkwitht.com/blog/how-to-turn-10k-into-100k/
- https://www.calculator.net/simple-interest-calculator.html
- https://www.imf.org/external/pubs/ft/fandd/2012/06/basics.htm
- https://www.investopedia.com/best-high-yield-savings-accounts-4770633
- https://www.investopedia.com/articles/mutualfund/08/recession-proof-mutual-funds.asp
- https://www.fool.com/the-ascent/buying-stocks/articles/this-is-how-much-money-you-can-make-by-investing-10k/
- https://www.cnbc.com/2023/09/06/money-market-funds-vs-high-yield-savings-accounts-4-key-differences.html
- https://finance.yahoo.com/news/comfortably-retire-100-000-know-110152178.html
- https://tools.carboncollective.co/future-value/10000-in-20-years/
- https://finance.yahoo.com/news/genius-ways-1-000-month-105500970.html
- https://www.bankrate.com/banking/savings/how-much-100000-could-earn-you-one-year-savings/
- https://www.bankrate.com/investing/what-is-the-rule-of-72/
- https://www.quora.com/I-want-to-earn-1-000-USD-every-month-from-dividends-How-much-do-I-have-to-invest-and-where
- https://www.fool.com/the-ascent/banks/articles/heres-why-a-20000-emergency-fund-might-fail-you/
- https://financebuzz.com/turn-10k-into-passive-income
- https://www.experian.com/blogs/ask-experian/do-you-pay-taxes-on-money-market-account/
- https://www.nasdaq.com/articles/4-ways-to-grow-%24100000-into-%241-million-for-retirement-savings-13
- https://www.education.ne.gov/wp-content/uploads/2017/07/Mindi-Reardon_Genoa-Twin-River-HS_Who-Wants-To-Be-Millionair-Lesson-Plan.pdf
- https://money.usnews.com/money/retirement/articles/what-is-a-good-monthly-retirement-income
- https://www.cbsnews.com/news/how-much-you-can-make-depositing-10000-into-high-yield-savings-account/
- https://www.bankrate.com/banking/savings/money-market-vs-savings-accounts-vs-cds/
- https://www.investopedia.com/do-cds-pay-compound-interest-5248340
- https://homework.study.com/explanation/how-quickly-will-money-double-if-it-is-invested-at-an-annual-interest-rate-of-6-compounded-continuously.html
- https://www.cbsnews.com/news/how-much-will-a-20000-cd-make-in-a-year/
- https://www.investopedia.com/articles/mutualfund/08/money-market.asp
- https://www.cnbc.com/select/pros-and-cons-high-yield-savings-accounts/
- https://www.forbes.com/advisor/banking/savings/millionaire-calculator/
- https://smartasset.com/retirement/how-long-will-100000-last-in-retirement
- https://lyonswealth.com/blog-details/how-to-invest-500k
- https://smartasset.com/investing/how-to-make-100k-a-year-in-passive-income
- https://www.fool.com/the-ascent/buying-stocks/articles/when-will-you-make-your-first-100000-in-your-investment-account/
- https://corporate.vanguard.com/content/corporatesite/us/en/corp/articles/tried-true-money-markets-get-boost.html
- https://www.unbiased.com/discover/retirement/retire-on-900k
- https://time.com/personal-finance/article/how-much-can-cds-earn/
- https://www.chegg.com/homework-help/questions-and-answers/1-000-invested-today-6-interest-would-worth-one-year-q129946347
- https://brainly.com/question/31270354
- https://www.investopedia.com/articles/personal-finance/111516/5-mistakes-youre-making-money-market-accounts.asp
- https://www.bankrate.com/banking/cds/paying-tax-on-cd-interest/
- https://www.investopedia.com/articles/mutualfund/08/money-market-break-buck.asp
- https://finance.yahoo.com/news/20-000-good-amount-savings-160036732.html
- https://www.investopedia.com/what-can-i-earn-with-10k-in-a-cd-8400034
- https://fortune.com/recommends/banking/pros-and-cons-of-money-market-accounts/
- https://finance.yahoo.com/news/may-surprised-long-750-000-130036930.html
- https://homework.study.com/explanation/an-investment-grows-from-100-00-to-150-00-or-50-over-five-years-what-annual-increase-gives-a-50-increase-over-five-years.html
- https://smartasset.com/retirement/living-off-interest
- https://brainly.com/question/26701911
- https://www.goodreads.com/quotes/6646740-i-suggest-a-money-market-account-with-no-penalties-and
- https://nesteggcare.com/does-the-math-of-doubling-of-stocks-every-ten-years-still-work/
- https://www.gsam.com/content/gsam/che/en/advisers/market-insights/gsam-connect/2022/Weighing_the_Options_MMF_vs_Bank_Deposits.html
- https://www.forbes.com/advisor/banking/money-market-account/money-market-account-vs-savings-account/
- https://www.bankrate.com/banking/mma/why-get-a-money-market-account/
- https://www.investopedia.com/best-money-market-accounts-5096917
- https://www.cbsnews.com/news/why-you-should-put-15000-into-a-1-year-cd-now/
- https://www.forbes.com/advisor/banking/savings/7-percent-interest-savings-account/
- https://www.usbank.com/investing/financial-perspectives/investing-insights/percentage-of-cash-in-my-portfolio.html
- https://www.fool.com/the-ascent/buying-stocks/articles/heres-what-happens-when-you-retire-with-just-100000/
- https://www.forbes.com/advisor/banking/money-market-account/what-is-a-money-market-account/