If you have $20,000 in cash, putting it in a low APY savings account could be costing you a thousand dollars or more each year. The best certificates of deposit (CDs) and savings accounts are paying well above 5.00% APY. Earning 5.00% APY on $20,000 in savings would generate $1,000 in interest within a year.
Since many of the best savings accounts are earning more than 5.00%, you could get slightly more for your money. Let's look at how much interest you can earn with $20,000 in today's leading savings accounts and CDs.
Earn $1,072 on a high-yield savings account
Savings accounts are an excellent choice for money that you've earmarked for emergency expenses and near-term goals, like saving for a car, vacation, or house. The only downside is that they have variable APYs. That means, your bank could change your savings rate at any time. With interest rates expected to drop in the near future, these might not be the best accounts for long-term savings.
Even so, many of the best high-yield savings accounts have attractive rates. For example, the Western Alliance Bank High-Yield Savings Premier account currently sports a 5.31% APY. At that rate, you could generate $1,072 in interest if you kept $20,000 saved for a year. This account has no monthly service fee and requires a $500 minimum deposit to open.
Our Picks for the Best High-Yield Savings Accounts of 2024
Capital One 360 Performance Savings 
APY 4.25% Rate infoSee Capital One website for most up-to-date rates. Advertised Annual Percentage Yield (APY)is variable and accurate as of April 11, 2024. Rates are subject to change at any time before or after account opening. Open Account for Capital One 360 Performance Savings OnCapital One'sSecure Website. Member FDIC. | APY 4.25% Rate infoSee Capital One website for most up-to-date rates. Advertised Annual Percentage Yield (APY)is variable and accurate as of April 11, 2024. Rates are subject to change at any time before or after account opening. | Min. to earn $0 |
CIT Platinum Savings
APY 4.85% APY for balances of $5,000 or more Rate info4.85% APY for balances of $5,000 or more; otherwise, 0.25% APY Min. to earn $100 to open account, $5,000 for max APY Open Account for CIT Platinum Savings OnCIT'sSecure Website. Member FDIC. | APY 4.85% APY for balances of $5,000 or more Rate info4.85% APY for balances of $5,000 or more; otherwise, 0.25% APY | Min. to earn $100 to open account, $5,000 for max APY |
American Express® High Yield Savings
APY 4.25% Rate info4.25% annual percentage yield as of September 13, 2024 Open Account for American Express® High Yield Savings OnAmerican Express'sSecure Website. Member FDIC. | APY 4.25% Rate info4.25% annual percentage yield as of September 13, 2024 | Min. to earn $0 |
While this account has a stellar rate, it doesn't allow ATM access and lets you link only one external account at a time. For more flexibility on your savings -- plus, industry-leading APYs -- you can check out other opportunities on our list of best high-yield savings accounts.
Earn between $500 and $4,700 on a CD
Certificates of deposit (CDs) are better suited for savings you won't touch in the near future. Unlike savings accounts, CDs have fixed interest rates that generate predictable returns on your deposit. In exchange for this fixed rate, however, you agree to leave your money in your CD for the duration of your term. Attempting to withdraw money before your CD matures will likely result in a severe early withdrawal penalty.
How much interest can you earn in a CD with a $20,000 deposit? Here's how much you could earn in different CD terms.
| Term Length | Top APY Offering | CD Provider | Minimum Deposit | Interest on $20,000 |
|---|
| 6-month CD | 5.13% APY | Western Alliance Bank via Raisin | $1 | $507 |
| 1-year CD | 5.25% APY | Bread Financial | $1,500 | $1,050 |
| 18 month CD | 5.00% APY | LendingClub | $2,500 | $1,519 |
| 2-year CD | 4.75% APY | Bask Bank | $1,000 | $1,945 |
| 3-year CD | 4.40% APY | Quontic | $500 | $2,758 |
| 4-year CD | 4.05% APY | Tab Bank | $1,000 | $3,442 |
| 5-year CD | 4.30% APY | Quontic | $500 | $4,685 |
Data source: Author's calculations.
As you can see, putting $20,000 in a CD could earn a decent amount of interest on any term. Just be diligent with your CD shopping, as you don't want to lock in a rate that's lower than others for the same term. Take a look at our list of the best CDs to see which rates are competitive and look into one before they start to drop.
All told, today's high rate environment has created several excellent opportunities for those with $20,000 in savings. Weigh the pros and cons of savings accounts and CDs carefully, then move your money to capture high interest rates before it's too late.
FAQs
If you have $20,000 in cash, putting it in a low APY savings account could be costing you a thousand dollars or more each year. The best certificates of deposit (CDs) and savings accounts are paying well above 5.00% APY. Earning 5.00% APY on $20,000 in savings would generate $1,000 in interest within a year.
Is $20 K good amount of savings? ›
Depositing $20,000 in a savings account is wise when you have a plan for the money, such as a near-term expense or rainy day fund. For long-term goals, like retirement, you might be better served by opening a brokerage account or certificate of deposit (CD).
How much will $10,000 make in a high-yield savings account? ›
If you put $10,000 into a high-yield savings account with a 5.00% APY, you'll make $500 in interest in a year. If you deposit $10,000 into a high-yield savings account with a 5.00% APY at age 20, you'll earn nearly $80,000 in interest by the time you turn 65.
How much will $50,000 make 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 interest will I get on $1000 a year in a savings account? ›
Earnings after one year on $1,000 with some of our top picks for the best savings accounts
| Bank | APY | Interest earned annually on $1,000 |
|---|
| CIT Bank | 5.00% | $51.16 |
| American Express | 4.25% | $43.34 |
| SoFi | 4.50% | $45.94 |
| Chase | 0.01% | $0.10 |
4 more rowsAPY = Annual Percentage Yield. APYs are subject to change at any time without notice. In one year, the top high-yield savings accounts could earn roughly $1,000 in interest on a $20,000 deposit. A 6-month CD could earn $500 in interest, while a 5-year CD could earn almost $4,700.
What percent of Americans have 20k in savings? ›
Other answers revealed that 15 percent had between $1,000 to $5,000, 10 percent with savings of $5,000 to $10,000, 13 percent boasted $10,000 to $20,000 of cash in their bank accounts while 20 percent had more than $20,000.
Can you ever lose your money with high-yield savings account? ›
As long as you're banking with an FDIC-protected bank, you're not risking losing your money when you deposit it into a high-yield savings account. However, the rate of inflation can be higher than your APY, resulting in a negative real return, or the return after taxes and inflation are taken into account.
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 it smart to keep money in a high-yield savings account? ›
While you can grow your money with a high-yield savings account, it's not the best way to generate long-term wealth for retirement because the yield often doesn't keep up with inflation. As a result, working with a broker or robo-advisor to develop an investment portfolio is better for long-range plans.
As of September 2024, no banks are offering 7% interest rates on savings accounts. Two credit unions offer high-interest checking accounts: Landmark Credit Union Premium Checking with a 7.50% APY and OnPath Credit Union High Yield Checking with a 7.00% APY.
Is having 100k in savings rich? ›
Having $100,000 in your savings account is an impressive achievement, and it's far more than what most people have saved. The median savings account balance is $1,200, according to a study last year by The Motley Fool Ascent.
How much does a $50,000 CD make in a year? ›
As reported by the FDIC, the average annual percentage yield (APY) for a one-year certificate of deposit (CD) is 1.85%. If you invest $50,000 in a one-year CD with this APY, you will earn $925 in interest by the end of the term. However, you can find financial institutions offering CDs with as much as 6.00% APY.
What are the downsides to a high-yield savings account? ›
What are the disadvantages 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. But for most people, these aren't major issues.
Can I live off the interest of $100,000? ›
Interest on $100,000
If you only have $100,000, it is not likely you will be able to live off interest by itself. Even with a well-diversified portfolio and minimal living expenses, this amount is not high enough to provide for most people.
How many people have $100 thousand in savings? ›
Most Americans are not saving enough for retirement. According to the survey, only 14% of Americans have $100,000 or more saved in their retirement accounts. In fact, about 78% of Americans have $50,000 or less saved for retirement.
Can I put $20,000 in a savings account? ›
The amount you can put in an ISA is set by your ISA allowance. This is the most you can save in an ISA in each tax year. For 2024/25, the allowance is £20,000. Like other savings accounts, cash ISAs can also offer different options for accessing your money.
Is 20k a good emergency savings? ›
While $20,000 may be more than what many Americans have in savings, it's not guaranteed to be an adequate emergency fund for you. Your emergency fund should be set up to cover at least three full months of essential bills. If your monthly expenses are high, you may need to save more than $20,000.
Is $25,000 in savings good? ›
When it's prudent to keep $25,000 in your savings account. Two words: emergency savings. If $25,000 equals three to six months of emergency expenses, a savings account is one of the best places for it. It doesn't matter if the stock market is bullish or there are opportunities in real estate to grow it 10-fold.
What's a good amount of money to have in savings? ›
As soon as you're able, you should consider opening a savings account specifically as an emergency fund. A good rule of thumb is to have three to six months' worth of expenses tucked away in a savings account as an emergency fund.
