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
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 $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.
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.
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.
Where can I get 7% interest on my money? ›
7% Interest Savings Accounts: What You Need To Know
- 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 will 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 rows
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.
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 does a 20,000 CD make in a year? ›
That said, here's how much you could expect to make by depositing $20,000 into a one-year CD now, broken down by four readily available interest rates (interest compounding annually): At 6.00%: $1,200 (for a total of $21,200 after one year) At 5.75%: $1,150 (for a total of $21,150 after one year)
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.
Is 50K in savings too much? ›
“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.
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.
Which bank gives 8% interest? ›
Top 20 Scheduled Banks offering Best FD Rates
Banks | Highest FD rate (% p.a.) | 5-year FD rate (% p.a.) |
---|
DCB Bank | 8.05 | 7.40 |
Fincare Small Finance Bank | 8.00 | 7.25 |
RBL Bank | 8.00 | 7.10 |
AU Small Finance Bank | 8.00 | 7.25 |
16 more rows
Which bank gives 7% interest on CD? ›
Currently, no U.S. banks or credit unions are offering 7% APY on CDs. During August 2023, a few credit unions were offering 7% interest on CDs, but those were limited-time offers that are no longer available.
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
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.
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.