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 will $50,000 earn in a year? ›
A sum of $50,000 in cash can earn about $195 a year in an average bank savings account or as much as $2,300 if you put it into a high-quality corporate bond fund. Other options include money market accounts, money market funds, certificate of deposits and government and corporate bonds.
How much will $50,000 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.
Where can I get 7% interest on my money? ›
Why Trust Us? As of June 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 is 5% interest on $50,000? ›
The calculation yields an average amount of approximately $51,271.10 when rounded to the nearest cent. Thus, the average amount in the account over one year, with $50,000 invested at 5% interest compounded continuously, is approximately $51,271.10.
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 rows1. High-Yield Cash Account. Considered one of the safest investments, a high-yield cash account can potentially keep your money safe. For example, savings and checking accounts, money market accounts and certificates of deposits (CDs) are considered cash accounts.
Is a CD better than a high-yield savings account? ›
If your goal is to lock in a high rate of interest on funds you don't need to access for a period of time, a CD might be your best option. However, a high-yield savings account may be the better choice if you want to earn solid interest on your savings while still keeping the money relatively accessible.
How to turn 50K into 100K? ›
How To Turn 50K Into 100K – 10 Realistic Methods To Try!
- 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.
What banks are offering 7% interest on CDs? 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.
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
Top 20 Scheduled Banks offering Best FD Rates
| Banks | Highest FD rate (% p.a.) | Additional interest rate for senior citizens (% p.a.) |
|---|
| RBL Bank | 8.00 | 0.50 |
| AU Small Finance Bank | 8.00 | 0.50 |
| Induslnd Bank | 7.99 | 0.26-0.50 |
| IDFC First Bank | 7.90 | 0.50 |
16 more rowsA sum of $50,000 in cash can earn about $65 a year in an average bank savings account or as much as $2,250 if you put it into a high-quality corporate bond fund.
What happens if you put $500 in a CD for 5 years? ›
For example, if you deposit $500 in a five-year CD that earns a 5.15% APY, your balance by the end of five years will be $642.71, earning you $142.71 in interest. However, if the interest rate is 3.25%, your earnings will only be $586.71, a difference of $56 in interest earnings.
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.
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
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.
Should I put $50,000 in a CD? ›
For example, U.S. Bank says a general rule of thumb is for cash and cash equivalents (including CDs) to make up 2% to 10% of your portfolio. Let's assume you have a total of $50,000 of investments and cash. In this scenario, you may want to put $2,500 -- 5% of your $50,000 -- into a CD.
How much will $50,000 grow in 20 years? ›
Assuming an annual return rate of 7%, investing $50,000 for 20 years can lead to a substantial increase in wealth. If you invest the money in a diversified portfolio of stocks, bonds, and other securities, you could potentially earn a return of $159,411.11 after 20 years.
