Many Americans are saving up so they're prepared for future life expenses. Anyone with an emergency fund should consider where they keep their extra savings. By opening a high-yield savings account, you can maximize the interest you earn from your savings. Are you wondering how much money you can make with $30,000 in the bank? Let's take a look at how much you can earn with this much money in a high-yield savings account.
Earn more money with a high-yield savings account
Many banks offer savings accounts, but they're not all created equally. Banks with savings accounts that earn interest use an annual percentage yield (APY) to describe the returns a customer can expect if they keep their money in their savings account for one year.
If you have a savings account, it's essential to review the APY so you know what to expect. It's common for brick-and-mortar banks to offer low APYs for their savings accounts. Your small, local bank may offer as little as 0.01% APY. At that meager rate, you won't earn much.
But the good news is a high-yield savings account could offer much more. Many banks offer 4.00% APY or higher for these accounts.
$30,000 in savings accumulates this much interest
To determine how much interest you'll earn, multiply your initial deposit ($30,000) by the APY your bank account offers. Doing this will show you how much you'd make if you kept your cash in the bank for one year.
For the below calculations, I used a 0.01% APY for a standard savings account and a 4.50% APY for a high-yield savings account. The bank accounts on our list of the best high-yield savings accounts have APYs ranging from 4.15% to 5.05% -- so I chose a rate in between.
The following calculations assume a $30,000 deposit with no additional deposits made to your account:
I don't know about you, but I'd rather earn $1,350 than $3. Beyond opening a bank account with a higher APY, boosting your earnings potential takes no additional work. Talk about a win!
Compound interest is on your side
As you can see, you can earn a significant amount of cash by keeping $30,000 in the bank for one year. But you can earn even more thanks to compound interest, which is interest that you earn on interest. The longer you keep your cash in your bank account, the more you'll earn.
To give you an idea how you can benefit from compound interest when you have a savings account, here's how much money you'll make if you keep $30,000 in a high-yield savings account for anywhere from one to five years.
Again, the calculations below assume you make no additional contributions beyond the initial deposit. You'll earn even more if you continue to make deposits into your account.
Here's a breakdown of the potential earnings:
Wow! That's $7,385.45 earned in five years, assuming the APY doesn't change. Keep in mind that APYs can change over time, so your APY likely won't stay the same rate forever.
Do this to earn more interest
If you have $30,000 saved up, congratulations! That's a massive accomplishment. But make sure you're keeping it in an account that earns interest. Check the APY so you feel confident that you're earning as much interest as possible. If you're not earning at a great rate, consider opening a high-yield savings account to boost your bank account balance without doing any extra work. Money earned from interest can be a win for your personal finances.
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
You can earn more interest and boost your bank account balance by keeping extra savings in a high-yield savings account. If you keep $30,000 in a high-yield savings account for one year at 4.50% APY, you can make $1,350 in interest. The longer you let your extra cash sit in your account, the more interest you'll earn.
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.
How much does a 10k high-yield savings account make? ›
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 money do you make from a high-yield savings account? ›
You could earn anywhere from $60 to $1,500 or more in a year with a high-yield savings account that offers 6% annual returns. That is, as long as the variable interest rate on the account doesn't adjust downward during that year.
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.
How much interest will $30,000 earn in a savings account? ›
$30,000 in savings accumulates this much interest
| Account type | Interest earned after one year |
|---|
| Savings Account, 0.01% APY | $3.00 |
| High-Yield Savings Account, 4.50% APY | $1,350 |
Aug 28, 2023
Like regular savings accounts, high-yield savings accounts at banks protected by the Federal Deposit Insurance Corp. (FDIC) insure bank deposits up to $250,000 per depositor. That means you won't lose your money if the bank suddenly collapses.
What is the downside of a high-yield savings account? ›
Potential Drawbacks of High-Yield Savings Accounts
They are savings accounts, so they can prove limited in how much they earn over time. They may not be a substitute for riskier investment accounts or relied on solely for larger goals like retirement.
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.
What happens if you put 50000 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.
If you need $40,000 to live off of and you have a $1 million portfolio that earns a 4 percent yield, which is about what you'd expect without getting into higher risk investments, it'll work. But if your portfolio is not of the magnitude to produce that income, or your expenses are too high, then it won't.”
Is there a catch with high-yield savings? ›
Pros and cons of a high-yield savings account
A high-yield savings account offers a higher rate of return on your money compared to standard savings accounts. But some of these accounts charge fees, have minimum balances requirements, and offer variable interest rates that can go up and down over time.
Which bank gives 8% interest on savings accounts? ›
Currently, no banks offer an interest rate of 8% on savings accounts. However, some banks provide a 7% APY on checking accounts. These include Landmark Credit Union Premium checking account with an APY of 7.50%, and OnPath Credit Union High Yield checking account with an APY of 7.00%.
Who has the highest paying high-yield savings account? ›
Best High-Yield Online Savings Accounts of July 2024
- BrioDirect High Yield Savings Account: 5.30% APY.
- Ivy Bank High-Yield Savings Account: 5.30% APY.
- TAB Bank High Yield Savings: 5.27% APY.
- UFB Secure Savings: Up to 5.25% APY.
- Laurel Road High Yield Savings®: 5.15% APY.
- Bask Interest Savings Account: 5.10% APY.
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.
Do you pay taxes on Hysa? ›
Do I have to pay taxes on HYSA? Yes, you have to pay taxes on the interest earned from a savings account. If you earn more than $10 in interest on your savings account, the bank holding your account will send you a Form 1099-T to include in your tax return.
Why should you deposit $5000 into a high-yield savings account? ›
A $5,000 balance could earn as much as $268 in a year with the highest-yield savings account on our radar -- and over $200 even with a slightly lower rate. Also consider customer service, FDIC insurance, and accessibility when you pick an account.
Is it good to have $5000 in savings? ›
Saving $5,000 in an emergency fund can be enough for some people, but it is unlikely sufficient for a family. The amount you need in your emergency fund depends on your unique financial situation.
What is the average return on a high-yield savings account? ›
Our picks at a glance
| APY | Estimated earnings |
|---|
| TAB Bank High Yield Savings | 5.27% | $527.40 |
| Salem Five Direct eOne Savings | 5.01% | $501.12 |
| Popular Direct High-yield Savings Account | 5.05% | $505.32 |
| First Foundation Online Savings Account | 4.90% | $489.58 |
6 more rowsShould I put all my money in a high-yield savings account? Most HYSAs limit withdrawals to six per month, which could make it hard to access funds. And while the return is better than a traditional savings account, it won't provide the growth necessary for long-term wealth compared to stocks and bonds.
