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 | 4.90% | 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
The best 1-year CDs could earn $2,625 in interest on $50,000. The best 2- to 5-year CDs could earn between $2,250 and $2,375 in interest on $50,000 per year.
How much interest does $50,000 earn in a year? ›
4.25% APY: If you invest your $50,000 in a CD or high-yield savings account with a 4.25% interest rate, you will earn $2,125 in interest in one year. 4.5% APY: A 4.5% CD or high-yield savings account will yield $2,250 in interest on your $50,000 investment in one year.
How much does $10,000 in CDs make in a year? ›
The national average APY for a one-year CD is 1.74 percent, based on Bankrate research, which shows this average has increased or remained the same since March 2022. If you deposited $10,000 into a one-year CD that pays this national average rate of 1.74 percent, in one year it would be worth a total of around $10,174.
How much will $25,000 make in a CD? ›
That being said, here's what you can expect to earn with varying rates for a 1-year (short-term) CD: 7.00% APY: $1,750 for a total of $26,750 after 12 months. 6.50% APY: $1,625 for a total of $26,125 after 12 months. 5.75% APY: $1,437.50 for a total of $26,437.50 after 12 months.
Where can I get 7% interest on my money? ›
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 $50,000 CD make in a year? ›
The best 1-year CDs could earn $2,625 in interest on $50,000. The best 2- to 5-year CDs could earn between $2,250 and $2,375 in interest on $50,000 per year.
How much interest will I earn on an $50,000 fixed deposit? ›
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 rowsThe interest is significant and predictable
Let's say you put $10,000 into a 5-year CD with the rate discussed above – 4.75%. After the 5-year term is up you'll have earned $2,611 in interest for a total account balance of $12,611. That is a good rate of return for an option that comes with essentially zero risk.
Who has the highest paying CD right now? ›
Best 1-Year CD Rates
- Abound Credit Union – 5.25% APY.
- Mountain America Credit Union – 5.25% APY.
- KS State Bank – 5.25% APY.
- Forbright Bank – 5.25% APY.
- Merchants Bank of Indiana – 5.25% APY.
- Seattle Bank – 5.25% APY.
- Bread Savings – 5.25% APY.
- Utah First Credit Union – 5.25% APY.
You can find 6% CD rates at a few financial institutions, but chances are those rates are only available on CDs with maturities of 12 months or less. Financial institutions offer high rates to compete for business, but they don't want to pay customers ultra-high rates over many years.
While longer-term CDs may tie up your funds for years, a 6-month CD allows you to access your money relatively quickly. If you suddenly need your $5,000 for an emergency or a more lucrative investment opportunity arises, you won't have to wait years to access your funds without incurring hefty penalties.
Should I put a million dollars in a CD? ›
However, federally insured banks and credit unions only insure up to $250,000 per depositor per account ownership category. If you put more than this amount in a single CD, some of your money will be at risk. You can still safely invest more than $250,000 in CDs by opening accounts at multiple financial institutions.
How to avoid tax on CD interest? ›
If the CD is placed in a tax-deferred 401(k) or individual retirement account (IRA), any interest earned on the CD may be exempt from paying taxes in the year it was earned. 2 Instead, you will pay taxes on that money when it is withdrawn from the 401(k) or IRA after you retire.
Where can I make 10% interest on my money? ›
Where can I get 10 percent return on investment?
- Invest in stocks for the short term. ...
- Real estate. ...
- Investing in fine art. ...
- Starting your own business. ...
- Investing in wine. ...
- Peer-to-peer lending. ...
- Invest in REITs. ...
- Invest in gold, silver, and other precious metals.
Many investment experts recommend a 60/40 mix. That is an investment portfolio invested 60% in equities (company shares) and 40% in bonds. For higher returns, an attractive investment for £10,000 could be shares or equity funds (which are made up of shares).
Where can I get 12% interest on my money? ›
Where can I find a 12% interest savings account?
| Bank name | Account name | APY |
|---|
| Khan Bank | 365-day, 18-month and 24-month Ordinary Term Savings Account | 12.3% to 12.8% |
| Khan Bank | 12-month, 18-month and 24-month Online Term Deposit Account | 12.4% to 12.9% |
| Yield | N/A | Up to 12% |
| Crypto.com | Crypto.com Earn | Up to 14.5% |
6 more rowsJun 1, 2023
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
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.
Is having $50,000 in savings good? ›
If you're nearing retirement with just $50,000 in savings, the reality is that you're frankly not in the best shape. The average 60-something has a retirement savings balance of $112,500, according to Northwestern Mutual. Even that, frankly, isn't a ton of money.
How much money do you need to make 100k in interest? ›
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.
