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
$10,000 in savings generates this much in interest
| Account type | Interest earned after one year |
|---|
| Savings Account, 0.01% APY | $1.00 |
| High-Yield Savings Account, 4.50% APY | $450 |
Aug 9, 2023
Generally, having at least three to six months of living expenses can offer a safety net if you experience job loss or a medical emergency. For example, if you have monthly expenses of $5,000, aim to save $15,000 to $30,000 in your emergency fund.
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 long does it take to save $30 K? ›
How long will it take to save?
| Savings Goal | If You Saved $200/month | If You Saved $400/month |
|---|
| $30,000 | 150 months | 75 months |
| $40,000 | 200 months | 100 months |
| $50,000 | 250 months | 125 months |
| $60,000 | 300 months | 150 months |
7 more rowsLosing money in an HYSA is rare, but it can happen.
This type of deposit account is available through many banks and credit unions, particularly online financial institutions. An HYSA works like a traditional savings account, except it offers a much higher annual percentage yield (APY).
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.
How much will $30,000 make 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 to flip 30k? ›
Here are nine great ways to invest $30k wisely:
- Real Estate Investments.
- Index Fund Investments.
- Stock and ETF Investments.
- REIT Investments.
- Mutual Fund Investments.
- Alternative Asset Investments.
- A Fixed-Income Investment.
- Robo Advisor Investments.
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.
Do you pay taxes on a high-yield savings account? ›
If you plan to take advantage of high interest rates this year, you might be wondering if your high-yield savings account interest is taxable. The answer is yes, but these types of accounts can offer the potential for significant savings, so don't let that discourage you from opening one.
It's possible, but it isn't realistic for everyone. Living off of interest relies on having a large enough balance invested that your regular interest earnings meet your salary needs. Rest assured that you don't need to earn a million dollar paycheck to reach your goal.
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.
Is saving $600 a month good? ›
But when it comes to what they need to be saving, it depends. So, if we're starting with a 30-year-old, they should be probably saving close to $580, $600, at least, a month. And that's if they're going to earn a high rate of return. So it depends on how aggressive and risky that they're looking to be.
How much will I have if I invest $300 a month? ›
If you invest $300 each month, that comes out to $3,600 over the course of a full year. And after 30 years of investing, that would total $108,000. But with the power of compounding, your portfolio's value could rise far higher than that.
How much interest can you make off of $10,000? ›
Here's what your returns on a $10,000 balance could look like
| 0.46% APY | 5.30% APY |
|---|
| After 1 Year | $46.00 | $530.00 |
| After 5 Years | $232.13 | $2,946.19 |
| After 10 Years | $469.64 | $6,760.37 |
Dec 30, 2023
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.
How much will $20,000 make in a high-yield savings account? ›
How much $20,000 earns you in a savings account
| APY | Interest earned in one year |
|---|
| 3.50% | $700 |
| 4.00% | $800 |
| 4.50% | $900 |
| 4.75% | $950 |
3 more rowsMar 31, 2023
If you invest $10,000 and make an 8% annual return, you'll have $100,627 after 30 years. By also investing $500 per month over that timeframe, your ending balance would be $780,326. Exchange-traded funds (ETFs) and mutual funds are both excellent investment options.
