A savings account is often the best place to set aside funds for emergencies and short-term financial goals. It provides easy access to your money, and some savings accounts even earn interest rates these days that outpace inflation.
Standard savings accounts typically earn a variable annual percentage yield (APY), which can fluctuate over time based on economic conditions and whether the Federal Reserve raises or lowers rates.
Not all savings accounts are created equal, however, as rates often vary starkly among banks. Here we’ll show what a large sum of $100,000 can earn you in a year right now in a high-yield savings account, compared with lower-yielding accounts.
For illustrative purposes, our example rates remain the same, although in the real world many banks change their savings account rates once or more in a year. Our examples also assume no funds are added to or withdrawn from the account over the year.
| Type of savings account | Typical APY | Interest on $100,000 after 1 year | Total amount in savings account after 1 year |
|---|
| Savings account paying competitive rates | 4.85% | $4,850 | $104,850 |
| Savings account paying the national average | 0.58% | $580 | $100,580 |
| Savings accounts from various big brick-and-mortar banks | 0.01% | $10 | $100,010 |
National average savings account rates
The national average APY for savings accounts is currently 0.58 percent, according to Bankrate’s July 3 survey of financial institutions. Having $100,000 in a savings account with this rate will earn you around $580 after a year, for a total of $100,580.
Type of account: Savings account
Total amount deposited: $100,000
APY: 0.58%
Total interest after one year: $580
Total account balance after one year: $100,580
While this average APY of 0.58 percent is 58 times greater than the 0.01 percent often paid by large brick-and-mortar banks, it’s still less than eight times what you could earn with a highly competitive 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.
Type of account: Savings account
Total amount deposited: $100,000
APY: 4.85%
Total interest after one year: $4,850
Total account balance after one year: $104,850
Online banks are where you’re likely to find such high rates. A few highly competitive accounts even earn 5 percent APY or higher.
Savings account rates from big banks
Big banks with a considerable branch footprint tend to offer lackluster rates that are often near 0 percent. Keeping a significant sum of money in such a savings account will provide you with a mere fraction of the interest you’ll get from a competitive account.
A sum of $100,000 in an account that earns an APY of just 0.01 percent will provide you with only around $10 in interest after a year’s time.
Type of account: Savings account
Total amount deposited: $100,000
APY: 0.01%
Total interest after one year: $10
Total account balance after one year: $100,010
Examples of banks with savings accounts that currently earn a 0.01 percent APY include Chase Bank and Bank of America. A competitive yield of 4.85 percent is 485 times greater than such a rock-bottom yield.
Where to find the best high-yield savings account
It pays to shop around to find an account that pays the best yield — especially if you’re depositing a sum as large as $100,000. Accounts that earn high APYs can often be found at online banks such as Bask Bank, CIT Bank and Citizens Access.
Other features you may find important in a bank include fee-free ATM access, 24/7 customer phone support and a highly rated mobile banking app. Don’t forget to make sure your money’s with a federally insured bank or credit union.
Other accounts that are beating inflation
It’s not difficult these days to find a savings account that outpaces the annual inflation rate, which is currently at 3 percent. Certificates of deposit (CDs) are another type of account that may also earn yields greater than the inflation rate. The best one-year CDs, for instance, currently earn APYs of up to 5.5 percent.
Keep in mind, however, that paying taxes on savings account interest and CD interest will eat into your earnings, putting a dent in your overall return.
Bottom line
Depositing $100,000 into a competitive savings account can earn you enough interest in a year to take a nice vacation, whereas putting it into an account with a lackluster rate won’t even generate enough to pay for a single dinner out. You’ll thank yourself in a year for having shopped around for the best rate.
FAQs
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 100000 make in a 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 is $10,000 in a high-yield savings account? ›
How much you can make in the best savings accounts
| Account | National average savings account | NexBank High-Yield Savings Account from Raisin |
|---|
| Deposit amount | $10,000 | $10,000 |
| APY | 0.45% APY | 5.26% APY |
| Earnings after six months | $22.47 | $259.63 |
| Earnings after one year | $45 | $526 |
5 days ago
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. Able to save more than that?
How much will $10,000 make in a savings account? ›
The interest that $10,000 would earn over a year depends on the annual percentage yield and frequency of compounding. For example, a 4% APY that's compounded daily would result in $408.08 in annual interest earnings.
Can I turn 100k into 1 million? ›
If you keep saving, you can get there even faster. If you invest just $500 per month into the fund on top of the initial $100,000, you'll get there in less than 20 years on average. Adding $1,000 per month will get you to $1 million within 17 years.
How much interest can 100k earn in a year? ›
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.
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.
Can you ever lose your money with high-yield savings account? ›
You can't lose your money because, just like your regular checking and savings accounts, the money is insured by the Federal Deposit Insurance Corporation up to $250,000.
Is there a catch with high-yield savings? ›
What are the cons of a high-yield savings account? Variable rates. Interest rates on these accounts can and do fluctuate, which means the APY you started with could potentially drop. Keep your eye on such changes and remember that the money is yours; at any time, you can move it to a bank that offers a higher rate.
There's no one-size-fits-all number in your bank or investment account that means you've achieved this stability, but $100,000 is a good amount to aim for. For most people, it's not anywhere near enough to retire on, but accumulating that much cash is usually a sign that something's going right with your finances.
What is the downside of a high-yield savings account? ›
Some disadvantages of a high-yield savings account include few withdrawal options, limitations on how many monthly withdrawals you can make, and no access to a branch network if you need it.
What happens if I deposit $100,000 in my bank account? ›
“If you deposit over $100,000 into your savings account, your financial institution will probably have to report that to the IRS,” said David Kemmerer, CEO of CoinLedger.
How many people have over $100 K in savings? ›
Sources: Federal Reserve
But only about 12% have more than $100,000 in checking and savings. About 45 percent of the households nearing retirement age have that amount of financial assets, including checking and savings accounts,retirement accounts, stocks, bonds, and certificates of deposit.
How many Americans have $10,000 in savings? ›
Majority of Americans Have Less Than $1K in Their Savings Now
| How Much Do Americans Have in Their Savings Accounts? | | |
|---|
| $1,001-$2,000 | 10.60% | 9.81% |
| $2,001-$5,000 | 10.60% | 10.64% |
| $5,001-$10,000 | 9.20% | 9.51% |
| $10,000+ | 12.60% | 13.48% |
4 more rowsMar 27, 2023
By keeping your extra savings in a high-yield savings account, you may be able to earn more interest. If you keep $20,000 in a high-yield savings account for one year at 4.50% APY, you can make $900 from interest. The longer you allow your savings to sit in your account, the more interest you'll earn.
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 does a $100,000 CD make in a year? ›
1-year CD returns on $100,000
At 5.0%: $5,000, for in a total balance of $105,000 at the end of the term. At 5.5%: $5,500, for in a total balance of $105,500 at the end of the term.
How much will 50000 make in a high-yield savings account? ›
5% APY: With a 5% CD or high-yield savings account, your $50,000 will accumulate $2,500 in interest in one year. 5.25% APY: A 5.25% CD or high-yield savings account will bring you $2,625 in interest within a year.
