How much will $100,000 earn in a high-yield savings account? (2024)

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MoneyWatch: Managing Your Money

By Angelica Leicht

Edited By Matt Richardson

/ CBS News

How much will $100,000 earn in a high-yield savings account? (2)

Having a solid savings plan in place is a smart idea in any economy, but it's especially important in an uncertain one. And, right now, we're in the midst of uncertainty due to persistent inflation, elevated interest rates and other unusual economic circ*mstances — so it's time to shore up any loose ends with your savings.

For example, if you're keeping your money in a regular savings account, you should consider moving it to another type of account instead. One smart option is a high-yield savings account. Right now, regular savings accounts offer an average rate ofjust 0.45%. High-yield savings accounts, on the other hand, typically provide significantly higher interest rates.

And, due to the elevated rate environment, high-yield savings account rates can beas high as 5% or morecurrently. This means your money works harder for you, increasing your wealth over time. But how much will you earn per year with a high-yield savings account if you deposit $100,000?

Explore the top savings rates available to you here and crunch the numbers.

How much will $100,000 earn in a high-yield savings account?

The earnings you can make on a $100,000 deposit into a high-yield savings account can vary, sometimes drastically, depending on small changes to the interest rate — and whether the interest compounds monthly or annually. Let's take a look.

Example 1: $100,000 at 4.25%

At a 4.25% annual interest rate, your $100,000 deposit would earn a total of $4,250 in interest over the course of a year if interest compounds annually.

  • Annual total: $104,250.

But let's say interest compounds monthly instead. With monthly compound interest, you would earn a total of $4,334 over the course of a year.

  • Annual total: $104,334

Example 2: $100,000 at 4.50%

With a 4.50% interest rate, your $100,000 would generate $4,500 if the interest compounds annually.

  • Annual total: $104,500

Now let's look at the difference in earnings if interest is compounding monthly. With monthly compound interest, the total earnings for the year would be $4,594.

  • Annual total: $104,594

As you can see, the slight increase in interest from 4.25% to 4.50% can make a big difference in your savings over time — and so can the addition of monthly compound interest.

Example 3: $100,000 at 4.75%

At this interest rate, your $100,000 could earn you an impressive $4,750 in interest if it compounds annually.

  • Annual total: $104,750

Now let's factor in monthly compound interest instead. At the 4.75% rate, the total earnings for the year would be $4,855 — a difference of over $100 over the course of 12 months.

  • Annual total: $104,855

Keep in mind that rates this high may be less common and can be associated with certain restrictions or requirements.

Example 4: $100,000 at 5.00%

A 5.00% interest rate can significantly boost your savings. At this rate, your initial $100,000 would accrue $5,000 in interest each year.

  • Annual total: $105,000

But monthly compound interest would boost that total even further. At the same 5.00% rate, monthly compound interest would result in a total of $5,116 at the end of the first year.

  • Annual total: $105,116

This rate is an attractive option for those who want their money to work harder for them — especially when monthly compound interest is factored in.

Find out how much you could earn with a high-yield savings account.

Comparison of earnings

Let's compare the earnings at these different interest rates over time. Keep in mind that these calculations assume that you don't add or withdraw any money.

Annual compound interest earnings:

  • At 4.25%, your $100,000 would earn $4,250 per year
  • At 4.50%, your $100,000 would earn $4,500 per year
  • At 4.75%, your $100,000 would earn $4,750 per year
  • At 5.00%, your $100,000 would earn $5,000 per year

Monthly compound interest earnings:

  • At 4.25%, your $100,000 would earn $104,334 per year
  • At 4.50%, your $100,000 would earn $104,594 per year
  • At 4.75%, your $100,000 would earn $104,855 per year
  • At 5.00%, your $100,000 would earn $105,116 per year

Over a 1-year period, the differences in earnings might not seem significant, but over time, the impact can be substantial. The power of compounding means that your initial $100,000 investment can grow even more when the interest is reinvested.

Variable nature of high-yield savings account rates

While the earnings with a high-yield savings account can be substantial, it's crucial to understand that high-yield savings accounts havevariable interest rates. Unlike CDs, which offer fixed interest rates for a set term, high-yield savings account rates can change at any time.

These rates are often influenced by factors such as economic conditions, inflation and the decisions of the individual financial institution. Therefore, the interest you earn on your savings can go up or down over time.

To maximize your earnings in a high-yield savings account, stay informed about interest rate changes and consider periodically reviewing and possibly switching to an account with a better rate if available.

The bottom line

High-yield savings accounts provide an excellent option for individuals looking to earn more on their savings while maintaining easy access to their funds. The amount your $100,000 can earn in such an account depends on the interest rate, with rates ranging from 4.25% to 5.00% or even higher. But while a higher interest rate can significantly impact your savings, remember that these rates are subject to change.

And, when choosing a high-yield savings account, consider factors beyond just the interest rate, such as account fees, minimum balance requirements and the financial institution's reputation. Diversifying your savings strategy with other investment options, such as stocks or bonds, can also help you achieve your long-term financial goals.

Angelica Leicht

Angelica Leicht is senior editor for CBS' Moneywatch: Managing Your Money, where she writes and edits articles on a range of personal finance topics. Angelica previously held editing roles at The Simple Dollar, Interest, HousingWire and other financial publications.

How much will $100,000 earn in a high-yield savings account? (2024)


How much will $100,000 earn in a high-yield savings account? ›

At a 4.25% annual interest rate, your $100,000 deposit would earn a total of $4,250 in interest over the course of a year if interest compounds annually. Annual total: $104,250.

How much will $100,000 make in high-yield savings account? ›

Competitive savings account rates

The best widely available high-yield savings accounts currently earn an APY of around 4.85 percent. An amount of $100,000 in an account earning this rate will earn around $4,850 after a year, for a total of $104,850. Online banks are where you're likely to find such high rates.

How much monthly income will 100k generate? ›

For example, suppose you invest in a money market account offering a 5% annual interest rate. In that case, you can expect your 100k to generate around $5,000 in passive income annually, or approximately $416.67 per month.

How much money can you make on a high-yield savings account? ›

Shopping around for a top APY means you can earn 10 to 12 times more than the national average rate, which is less than half a percent. $5,000 in one of today's best high-yield savings accounts could earn as much as $136 in just six months—compared to about $11 with an average rate.

What happens if you put 10000 in a high-yield savings account? ›

The rate environment is favorable

In fact, rates on high-yield savings accounts are currently hovering around 5%, and you may be able to find something even higher if you shop around for an online bank. On a $10,000 deposit, that would equate to $500 after one year.

How to get best return on $100,000? ›

Best Investments for Your $100,000
  1. Index Funds, Mutual Funds and ETFs.
  2. Individual Company Stocks.
  3. Real Estate.
  4. Savings Accounts, MMAs and CDs.
  5. Pay Down Your Debt.
  6. Create an Emergency Fund.
  7. Account for the Capital Gains Tax.
  8. Employ Diversification in Your Portfolio.
Dec 14, 2023

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.

How much should I invest to make 100k a year? ›

To cut to the chase, if you want your interest to earn $50,000, $70,000 or $100,000 per year, you'll need to have approximately $1.25 million to $2.5 million in savings or retirement accounts. If you're aiming for somewhere in the middle, like $70,000, you'd want to have $1.75 million saved.

Can I retire at 62 with $400,000 in 401k? ›

If you have $400,000 in the bank you can retire early at age 62, but it will be tight. The good news is that if you can keep working for just five more years, you are on track for a potentially quite comfortable retirement by full retirement age.

How much to invest to get $4,000 a month? ›

Too many people are paid a lot of money to tell investors that yields like that are impossible. But the truth is you can get a 9.5% yield today--and even more. But even at 9.5%, we're talking about a middle-class income of $4,000 per month on an investment of just a touch over $500K.

Do millionaires use high-yield savings accounts? ›

Millionaires Like High-Yield Savings, but Not as Much as Other Accounts. Usually offering significantly more interest than a traditional savings account, high-yield savings accounts have blown up in popularity among everyone, including millionaires.

Is it worth putting money into a high-yield savings account? ›

While you can grow your money daily and take on zero risk with high-yield savings, they are not the best way to grow your wealth long-term. The rate of inflation can be higher than the yield you earn over time, so it's better to not keep piling cash into your savings and instead invest your money.

How long should you keep money in high-yield savings account? ›

There's no rule on the exact amount to have in your high-yield savings account. The amount of money you should store in these accounts depends on various factors. However, the general rule of thumb is that you should have liquid access to enough cash to cover between three and six months of your expenses.

What is the bad side of a high-yield savings account? ›

Not a good fit for long-term savings

High-yield savings accounts earn you more money than brick-and-mortar bank accounts do. But often, you still won't earn enough to keep up with inflation. Even though your account balance rises, your buying power decreases.

How much will 50000 make in a high-yield savings account? ›

If you deposit $50,000 into a traditional savings account with a 0.46%, you'll earn just $230 in total interest after one year. But if you deposit that amount into a high-yield savings account with a 5.32% APY,* your one-year interest soars to over $2,660.

What is the best investment for $100,000 dollars? ›

You can invest in the stock market

This means you get a decent return with low-risk, especially short-term, government bonds right now, even for long-term retirement savings,” says Escamilla. Exchange traded funds (ETFs), which are typically a mix of stocks and bonds can also add diversification to your portfolio.

How to invest $100 000 to make $1 million? ›

4 Ways to Grow $100,000 Into $1 Million for Retirement Savings
  1. Index funds. ...
  2. Dividend-paying stocks. ...
  3. Growth stocks. ...
  4. Value stocks.
Feb 17, 2024

How much of my money should be in a high-yield savings account? ›

For savings, aim to keep three to six months' worth of expenses in a high-yield savings account, but note that any amount can be beneficial in a financial emergency. For checking, an ideal amount is generally one to two months' worth of living expenses plus a 30% buffer.

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