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How Much Will $1,000 Make in a High-Yield Savings Account?

  • If you deposit $1,000 into a high-yield savings account with a 4.5% APY, you’ll earn just over $45 in interest after one year.
  • If you deposit $1,000 into a high-yield savings account with a 4.5% APY at age 20, you’ll earn almost $6,100 in interest by age 65.
  • You can grow your savings faster by making regular, scheduled deposits.
  • CDs and money market savings accounts are some alternatives to high-yield savings accounts.

How much will $1,000 make in a high-yield savings account?

If you deposit $1,000 into a high-yield savings account with a 4.5% annual percentage yield (APY), you’ll earn a little more than $45 in interest after one year. With an APY of 5%, your interest earnings would be about $51 after one year.

According to the FDIC, the average yield on a regular savings account is 0.45%. These high-yield APYs are significantly better than this average savings account rate, which would only earn you around $4.50 after one year.

You can compare the earnings on a $1,000 deposit with different APYs in the table below.

Earnings after one year on $1,000 in a high-yield savings account

APY Interest earned annually on $1,000 Total ending balance
0.45% $4.51 $1,004.51
4.25% $43.34 $1,043.34
4.50% $45.94 $1,045.94
5.00% $51.16 $1,051.16
5.25% $53.78 $1,053.78
5.50% $56.41 $1,056.41

The calculations shown are just a simple example. Always seek advice from a qualified professional before making important financial decisions or long-term agreements.

The calculations in the table above assume:

How much can I earn with our top banks?

Our top picks for the best savings accounts have APYs that greatly exceed those of regular savings accounts. See how much you can earn on a $1,000 deposit in one year with our top bank choices in the table below.

Earnings after one year on $1,000 with our top pick for the best savings accounts

Bank APY Interest earned annually on $1,000 Total ending balance
National average 0.45% $4.51 $1,004.51
Barclays 4.35% $44.38 $1,044.38
Continental Bank 4.41% $45.00 $1,045.00
Quontic Bank 4.50% $45.94 $1,045.94
RBMAX 5.05% $51.69 $1,051.69
Cloudbank 24/7 5.22% $53.47 $1,053.47
Western Alliance 5.27% $53.99 $1,053.99

APYs are correct as of July 2024 and may vary by location. The calculations shown are just a simple example. Always seek advice from a qualified professional before making important financial decisions or long-term agreements.

The calculations in the table above assume:

How much could I earn by 65 with $1,000 in a high-yield savings account?

If you deposit $1,000 into a high-yield savings account with a 4.5% APY at age 20, you will have earned nearly $6,100 in interest by the time you turn 65.

Each year your money stays in a high-yield savings account, the interest accrued from previous years also earns interest. This means that your money is generating more interest year after year. To maximize the power of compound interest in a high-yield saving account, start saving as early as possible.

In the table below, you can see how your total savings will increase over time based on the age at which you begin saving.

Earnings on a $1,000 deposit in a high-yield savings account with a 4.5% APY over time

Starting age Years to 65 Interest earned Total ending balance
20 45 $6,093.82 $7,093.82
25 40 $4,706.08 $5,706.08
30 35 $3,589.82 $4,589.82
35 30 $2,691.93 $3,691.93
40 25 $1,969.69 $2,969.69
45 20 $1,388.74 $2,388.74
50 15 $921.44 $1,921.44
55 10 $545.55 $1,545.55
60 5 $243.20 $1,243.20

The calculations shown are just a simple example. Always seek advice from a qualified professional before making important financial decisions or long-term agreements.

The calculations in the table above assume:

To learn more about how much you could earn over time, try using our savings calculator.

How to maximize saving $1,000 in a high-yield savings account

The advantages of keeping money in a high-yield savings versus a regular savings account are apparent. Of course, a higher APY generates more growth, but there are other ways to maximize the power of a high-yield savings account. 

Here are some ways to make your money work harder for you.

Compound interest

The table above shows that $1,000 invested at 4.5% from age 20 to 65 will generate $6,093.82. If you invest that money only from age 40 to 65, the interest generated is $1,969.69. If you wait until age 60 to invest and keep the money in your high-yield savings account for five years, you will receive $243.20 in interest.

The power of compound interest is substantial. While most high-yield savings accounts have a variable interest rate, this basic example shows how important it is to start saving as soon as possible.

You should also know the difference between an account that compounds interest daily and one that compounds interest monthly, quarterly or annually. When interest compounds more frequently, more interest accumulates over time.

Low or no fees

The APY, fees and minimum account balance requirements vary from bank to bank. Consider each of these factors before looking at how to open a high-yield savings account. Many banks with high-yield savings accounts do not have a maintenance fee. Some of those with a monthly or annual fee will waive the fee if a minimum account balance is maintained.

The fee is automatically deducted from your account balance. This means you pay the fee with the interest that your money earned. Because of this, it’s advisable to avoid HYSAs that charge monthly or annual fees.

Automate payments

Automating deposits to your high-yield savings account is another smart way to maximize growth. By setting up an automatic deposit, your HYSA receives regular infusions of additional money. There’s no possibility that you’ll overlook making a planned deposit, so the funds will consistently grow. Each deposit increases the total interest generated and boosts the power of compounded interest.

Alternatives to high-yield savings accounts

A high-yield savings account outperforms a regular savings account, but it doesn’t compare to the average yield of the S&P 500. Over the last 20 years, the annual return on the S&P 500 has averaged 7.7%. However, a high-yield savings account is a no-risk place to park your funds. While the APY will vary, your FDIC-insured balance is up to $250,000 per depositor and account. In comparison, you could potentially lose all of your funds if you make a bad stock market investment.

There are a few alternatives to high-yield savings accounts. CDs and money market accounts are also FDIC-insured.

CDs

If you buy a CD, you’ll typically choose a term from six months to five years. If you withdraw your funds before the end of the term, you are responsible for an early withdrawal fee. According to the FDIC, the average yield on a 60-month CD is 1.43%. The average yield on a 6-month CD is 1.81%.

With a high-yield savings account, you generally have a limited number of monthly withdrawals, and no fee is associated with withdrawals. Because a fee is charged when you cash out a CD early, some people may be less inclined to withdraw their funds held in a CD. This can be advantageous for people who tend to dip into their savings.

Money market accounts

The average yield on a money market account is currently 0.67%. This exceeds the APY on a regular savings account. However, it’s far lower than the APY for a CD or high-yield account.

With a money market account, there isn’t a limit on the number of monthly withdrawals you can make. You may also be able to access your funds via an ATM or write checks from the account. In these ways, a money market account can be a smart place to store cash that you don’t need at the moment but may need access to soon or at a moment’s notice.

Our top picks for the best savings accounts

FAQ: How much will $1,000 make in a high-yield savings account?

Is it worth putting money into a high-yield savings account?

A high-yield savings account has an APY of between 4% and 5% or more. This is an FDIC-insured account with a higher APY than a regular savings account, a money market account or a CD. However, the primary drawbacks are a limit on withdrawals per month and potential fees. If you want to maximize growth in a no-risk account, a high-yield savings account is worth considering.

What is the average return on a high-yield savings account?

The APY on a high-yield savings account varies from bank to bank and fluctuates over time. Currently, it is between 4% and 5% or more. However, there is some variation outside this range.

How much interest does $1,000 earn in a year in a high-yield savings account?

The interest on $1,000 in a high-yield savings account in a year is $51.01. This is based on a 5% APY with interest compounded monthly.

How much will $5,000 earn in a high-yield savings account?

A $5,000 deposit in a high-yield savings account is $255.81. This is based on 5% APY with interest compounded monthly for 12 months. After 60 months, the interest earned is $1,381.414

Is it worth putting $1,000 into a CD?

A CD has a lower APY than a high-yield savings account, so your interest earned is less than it would be in a high-yield savings account. However, you must pay an early withdrawal fee to access funds in a CD. This can discourage you from making an early withdrawal. A CD is worth considering if you need help keeping money in savings. If you want to maximize growth, other types of accounts are better.

How much will a $1,000 CD make in a year?

A $1,000 CD will earn $18.60 in a year, based on an average APY of 1.86% on a 12-month CD.

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