If you have a large sum of money you're not quite sure what to do with, you're in luck. Many high-yield savings accounts are paying annual percentage yields (APYs) of 5.00% or higher right now, and there are lots of different banks to choose from.
These high rates were unheard of several years ago, but their prevalence now means you can earn significant interest on large sums of money. Here's how much $10,000 could become in just one year and why a savings account is a great choice, no matter how much money you have.
How much $10,000 becomes in one year
Putting $10,000 into a savings account with an APY of 5.00% means you could have about $10,511 just one year later. That's more than $500 of free money in just 12 months!
Not everyone has $10,000 to put in a savings account, but that doesn't mean you can't still earn impressive interest. Here are a few more examples of smaller sums earning a 5.00% rate over one year:
Our Picks for the Best High-Yield Savings Accounts of 2024
SoFi Checking and Savings 
APY up to 4.60% Rate infoYou can earn the maximum APY by having Direct Deposit (no minimum amount required) or by making $5,000 or more in Qualifying Deposits every 30 days. See SoFi Checking and Savings rate sheet at: https://www.sofi.com/legal/banking-rate-sheet. Open Account for SoFi Checking and Savings Member FDIC. | APY up to 4.60% Rate infoYou can earn the maximum APY by having Direct Deposit (no minimum amount required) or by making $5,000 or more in Qualifying Deposits every 30 days. See SoFi Checking and Savings rate sheet at: https://www.sofi.com/legal/banking-rate-sheet. | Min. to earn $0 |
Barclays Online Savings
Open Account for Barclays Online Savings Member FDIC. | | Min. to earn $0 |
American Express® High Yield Savings
APY 4.25% Rate info4.25% annual percentage yield as of May 29, 2024 Open Account for American Express® High Yield Savings Member FDIC. | APY 4.25% Rate info4.25% annual percentage yield as of May 29, 2024 | Min. to earn $1 |
- $5,000 earns about $255
- $2,500 earns about $128
- $1,000 earns about $51
- $500 earns about $25
Of course, you'd have to leave your money in the savings account and not take any of it out for your initial sum to reach these amounts.
Why high-yield savings accounts are a great option
Many people already have savings accounts, but you're missing out if you don't have one paying a high APY right now. Here are just a few of their benefits.
1. They pay a high yield
As I mentioned above, it's not difficult to find savings accounts with rates from 4.00% to 5.00%, and some are even higher. This makes it easy for your cash to grow quickly without you having to do anything. This is an example of passive income.
2. There aren't many fees
Most high-yield savings accounts don't charge fees. That's because many of them are available from online banks that don't have the same expensive overhead costs -- like running physical branches -- that brick-and-mortar banks have. But before you open an account, check for any fees, like for monthly maintenance or not maintaining a minimum balance.
3. Low or no minimum deposit amount
There are plenty of savings accounts that have a minimum deposit of $0 or just $1. This gives you the option to open a high-yield account and then fund it when you can.
4. They're safe
Just like other bank accounts, the best high-yield savings accounts are FDIC insured, up to $250,000 per depositor per bank. If, for some reason, your bank goes out of business, you're guaranteed to get your money back. Just check that your bank has this vital coverage.
5. You have easy access to your money
You can take your money out of a high-yield savings account whenever you want. This makes them a great place to keep your emergency fund without worrying about your money being tied up in investments -- or potentially losing value.
One downside to high-yield savings accounts
The only downside to high-yield savings accounts is that the interest rate isn't guaranteed. For example, if the Federal Reserve cuts interest rates later this year, your savings account APY will likely decrease to some extent.
Still, high APYs won't disappear overnight. Even if rates drop, your money in a high-yield savings account will still earn a much higher rate than it would in a traditional savings account. This means that whether you have $10,000 to put into a high-yield savings account or $100, now is a great time to open one.
These savings accounts are FDIC insured and could earn you 11x your bank
Many people are missing out on guaranteed returns as their money languishes in a big bank savings account earning next to no interest. Our picks of the best online savings accounts could earn you 11x the national average savings account rate. Click here to uncover the best-in-class accounts that landed a spot on our short list of the best savings accounts for 2024.
FAQs
Putting $10,000 into a savings account with an APY of 5.00% means you could have about $10,511 just one year later. That's more than $500 of free money in just 12 months!
What happens if I put $10,000 in a high-yield savings account? ›
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.
How much interest will $10 000 earn 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. You can browse the best high-yield savings account rates to explore your earning potential.
How much will $5000 make in 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.
Can you lose money in a 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.
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.
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.
Where to put $10,000 for best interest? ›
The best way to invest 10K in individual stocks, ETFs, mutual and index funds, and stocks and shares ISAs. You can also use a robo-advisor to invest in stocks. How to invest 10k for the short term? You can invest the 100k in a high-interest savings account or a cash ISA for short-term goals.
How much is $10000 for 5 years at 6 interest? ›
Summary: An investment of $10000 today invested at 6% for five years at simple interest will be $13,000.
How much will $10,000 make in a money market account? ›
How much you can make in the best money market accounts
| Account | National average money market account | Sallie Mae Money Market |
|---|
| Deposit amount | $10,000 | $10,000 |
| APY | 0.68% APY | 4.65% APY |
| Earnings after six months | $33.94 | $229.86 |
| Earnings after 1 year | $68 | $465 |
4 days ago
How much interest would you make on a $5,000 CD? We estimate that a $5,000 CD deposit can make roughly $25 to $275 in interest after one year. In comparison, a $10,000 CD deposit makes around $50 to $550 in interest after a year, depending on the bank.
Which bank gives 7% interest on savings accounts? ›
As of May 2024, no banks are offering 7% interest rates on savings accounts. Two credit unions have high-interest checking accounts: Landmark Credit Union Premium Checking with 7.50% APY and OnPath Credit Union High Yield Checking with 7.00% APY.
How much does a 10k high-yield savings account make? ›
Putting $10,000 into a savings account with an APY of 5.00% means you could have about $10,511 just one year later. That's more than $500 of free money in just 12 months! Not everyone has $10,000 to put in a savings account, but that doesn't mean you can't still earn impressive interest.
How much cash is too much in savings? ›
Gaines reiterates that even most high-yield savings accounts lose value to inflation over time. “More than two months' worth of living expenses in a savings account is too much given the ability to earn around 5% from easily accessible money market accounts that should not fluctuate in price.”
Are CDs worth it? ›
The bottom line
CDs are a safe investment that can net you a higher return than most savings and money market accounts. Since rates have increased over the past year, they're more appealing to some savers. But with some banks already dropping rates, it's best to lock in a rate soon.
What is better, a CD or high-yield savings account? ›
If your goal is to lock in a high rate of interest on funds you don't need to access for a period of time, a CD might be your best option. However, a high-yield savings account may be the better choice if you want to earn solid interest on your savings while still keeping the money relatively accessible.
How much interest will I get on $1000 a year in a high-yield savings account? ›
Let's look at how much you could make by depositing $1,000 into accounts with various ranges: After one year with a regular account at 0.43%: $1,004.30. After one year with a high-yield account at 4.50%: $1,045.00. After one year with a high-yield account at 5.00%: $1,050.00.
Do you get penalized for taking money out of a high-yield savings account? ›
Flexibility; you can deposit and withdraw as needed. Typically, no monthly fees. No penalties for withdrawals.
How much will $20,000 make in a high-yield savings account? ›
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.
