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
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FAQs
The magic of high yields for your cash
Your savings account could generate hundreds or even thousands of dollars a year in earnings. Here are a few examples: $10,000 in a 5% savings account becomes $10,511 in 12 months. $20,000 in a 5% savings account becomes $21,023 in 12 months.
Is $30 000 in savings good? ›
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 money can you make with 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. Able to save more than that?
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 rowsYou 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.
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 interest will $30,000 earn in a 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 double 30,000 dollars? ›
A balanced approach that involves investing in a diversified portfolio of stocks and bonds works for most people. However, those with higher risk appetites might prefer dabbling in more speculative stuff like small-cap stocks or cryptocurrencies. Others may prefer to double their money through real estate investments.
How much do you need to invest to make $30,000 a year? ›
If you are good at investing you can expect an annual return of about 10%. Some say less and some more but around 10% before inflation (and taxes). So you will have to invest $300,000 to make an average annual return of $30,000.
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.
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 30k enough in savings? ›
How much do you need? Everybody has a different opinion. Most financial experts suggest you need a cash stash equal to six months of expenses: If you need $5,000 to survive every month, save $30,000.
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.
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 interest can you make on $10,000 dollars? ›
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 money can you make investing 10,000 dollars? ›
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.
How much will 50000 make in a high-yield savings account? ›
5.5% APY: Choosing a 5.5% CD or high-yield savings account will result in $2,750 in interest on your $50,000 investment annually. 5.75% APY: A 5.75% CD or high-yield savings account will earn you $2,875 in interest in one year.
