If you have $50,000 just sitting in a savings account, you're in luck. The median savings balance in the U.S. is $1,200, meaning your savings balance is more than 41 times above the middle. Yeah -- good job.
But unless you've earmarked that $50,000 for an emergency or some immediate goal, leaving it in a savings account may not be the savviest decision. While many high-yield savings accounts have high APYs right now, those rates are likely going to change later this year. You might be reluctant to put your money in high-risk investments, like stocks. However, for potentially higher returns over a longer period, a certificate of deposit (CD) could be a great place to put your $50,000.
How much would $50,000 yield in today's best CDs? Let's take a look at some terms and find out.
A short-term CD could yield $2,625 per year (for a 1-year CD)
A short-term CD is generally considered one with a term between one and 12 months. Currently, these CD terms offer the highest APYs, which is typically not the case. Normally, banks offer higher APYs on longer terms, as they want to give an incentive to keep your money stored in their vaults for longer periods. This trend was reversed during the Fed's latest round of interest rate hikes, which elevated all CD rates, but especially those that mature in the near term.
Investing $50,000 in a short-term CD could produce $2,625 annually, but your yield will depend on the term you choose. For perspective, here's how much you could earn from today's top short-term CDs.
| Term | APY (current | Bank | Yield on $50,000 |
|---|
| 3 months | 5.26% | Western Alliance Bank (via Raisin) | $682.50 |
| 6 months | 5.00% | LendingClub | $1,250 |
| 9 months | 5.55% | NASA Federal Credit Union | $2,081 |
| 1 year | 5.00% | Marcus by Goldman Sachs | $2,625 |
Data source: CD issuers. CD rates are current as of Feb. 1, 2024.
With a 1-year CD, you could earn around $2,625, assuming you locked in at an APY of 5.25%. Shorter terms would yield slightly less overall, but they'd mature faster, giving you access to your money sooner. These yields also assume you won't withdraw early (incurring a penalty) or withdraw your interest monthly or quarterly, which would reduce your earnings overall.
A long-term CD could yield $2,375 per year (for a 3-year CD)
If short-term CDs are those with terms 12 months or below, then long-term CDs are those with terms longer than 12 months. These CDs have slightly smaller APYs, but they let you lock in today's best rates for a longer period. For perspective, here's how much the top long-term CDs could earn.
| Term | APY | Bank | Yield on $50,000 (per year) |
|---|
| 2 years | 4.50% | Bask Bank | $2,250 |
| 3 years | 4.66% | First Internet Bank of Indiana | $2,375 |
| 4 years | 4.45% | Popular Direct | $2,225 |
| 5 years | 4.30% | Quontic | $2,150 |
Data source: CD issuers. CD rates are current as of Feb. 1, 2024.
Earning more than $2,000 in a fixed income investment is a good deal -- especially if inflation remains below your APY. Of course, you'd also pay taxes on your CD interest, thus reducing your rate. But for little to no risk, you could get a guaranteed return for a long period.
Consider a CD ladder
You don't have to invest $50,000 in a single CD. Instead, you could divide your money into both short and long CD terms, otherwise known as CD laddering. This lets you lock in high rates for longer periods, while also giving you more frequent access to your savings. You might even want to throw in a few no-penalty CDs, just to give yourself a risk-free escape in case you need cash fast.
All in all, today's best CD terms present a rare opportunity to get decent returns with little risks. Weigh the pros and cons of CDs carefully, but if you have $50,000 in a savings account, moving it into a CD might be a savvy move to make in 2024.
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FAQs
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.
How much interest will $50,000 earn in a year? ›
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.
What happens if you put $50,000 in a high yield savings account? ›
How much of a difference does this make? 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 current CD rate on $100,000? ›
Best Jumbo CD Rates for June 2024
| BEST NATIONAL JUMBO CDs | | |
|---|
| State Department Federal Credit Union | 5.41% APY | $100,000 |
| Credit One Bank | 5.35% APY | $100,000 |
| Grow Financial Federal Credit Union | 5.12% APY | $100,000 |
| Best non-Jumbo option: NASA Federal Credit Union | 5.40% APY | $10,000 |
46 more rowsThat understood, here's what the account will earn based off of some common 6-month CDs rates available online now: 5.35%: $264.01 in interest for a total amount of $10,264.01 after six months. 5.30%: $261.58 in interest for a total amount of $10,261.58 after six months.
How much can $50,000 make in a CD? ›
A long-term CD could yield $2,375 per year (for a 3-year CD)
| Term | APY | Yield on $50,000 (per year) |
|---|
| 2 years | 4.50% | $2,250 |
| 3 years | 4.66% | $2,375 |
| 4 years | 4.45% | $2,225 |
| 5 years | 4.30% | $2,150 |
Feb 10, 2024
How much interest can you earn on a Rs. 50,000 FD
| Amount | Interest rate (p.a.) | Interest per month |
|---|
| Rs. 50,000 | 8.50% | Rs. 354.17 |
| Rs. 50,000 | 9% | Rs. 375.00 |
| Rs. 50,000 | 9.50% | Rs. 395.83 |
| Rs. 50,000 | 10.00% | Rs. 416.67 |
5 more rows“In today's times, $50,000 should really be looked at as an emergency fund, rather than something to spend on improving one standard of living,” Jania added. “Further, because inflation is still rampant, if one chooses to increase their standard of living, the cost of that will likely go up even more over time.”
How much interest on $50,000 for 5 years? ›
For example, Shriram Finance FD offers its depositor a 7.86% annual rate of returns. Hence, if a depositor paid INR 50,000 FD for 5 years, he is likely to accumulate a significant interest of INR 23,976. Therefore, if the funds are deposited in Shriram Finance FD, the depositor is expected to receive INR 73,976.
How to turn 50K into 100K? ›
How To Turn 50K Into 100K – The Best Methods To Double Your Money
- Start An Online Business. ...
- Invest In Real Estate. ...
- Invest In Stocks & ETFs. ...
- Invest In A Blog. ...
- Retail Arbitrage. ...
- Invest In Alternative Assets. ...
- Create A Rental Business. ...
- Invest In Small Businesses.
Highest current CD rates (overall)
| Institution name | APY | Term length |
|---|
| Morgan Stanley | 5.05% | 2 years |
| LendingClub Bank | 5.00% | 18 months |
| TAB Bank | 5.00% | 18 months |
| My eBanc | 5.00% | 18 months |
31 more rowsCan You Get a 7% CD Account? There was a lot of excitement in August 2023 about a few credit unions offering 7% APYs on certificates. But those rates were offered for a limited time only and are no longer available. However, the nation's best CD rates are still well above 5%, with some pushing toward 6%.
Can you get 6% on a CD? ›
According to the FDIC, the average rate for a 12-month CD is 1.80% as of May 2024. So, yes, 6% CD rates are excellent. If you can get reliable 6% CD rates over a long period, then you should lock the rate in as long as possible.
How much interest does $50,000 earn in a year? ›
A sum of $50,000 in cash can earn about $195 a year in an average bank savings account or as much as $2,300 if you put it into a high-quality corporate bond fund. Other options include money market accounts, money market funds, certificate of deposits and government and corporate bonds.
Why should you deposit $10,000 in CD now? ›
A one-year CD with a $10,000 opening deposit that earns the Bankrate partner average yield of 4.94 percent would be worth around $10,494 when it matures in 12 months' time. This high-yielding one-year CD would earn you around $320 more in total interest than a CD earning the national average rate.
How to avoid tax on CD interest? ›
Open your CD as part of a retirement account
So, your income taxes will be deferred until you tap into your IRA in retirement. If you opt for a Roth IRA, your money grows tax-free.
How much return on a 50k investment? ›
1. Start immediately
| Starting amount | Annual return | After 20 years |
|---|
| $50,000 | 6% | $160,357 |
| $50,000 | 8% | $233,048 |
| $50,000 | 10% | $336,375 |
Apr 12, 2024
Basically, if you decide to follow this rule, you just multiply the amount of income you hope your retirement accounts produce for you each year by 25 -- and that's how big your account balance needs to be. If you want $100,000, therefore, you'd multiply that amount by 25 to find out you need $2.5 million saved.
How much money do I need to invest to make $3,000 a month? ›
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.
