Here's How Much Interest You Can Earn on $20,000 in Savings
KEY POINTS
- 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.
- Savings accounts are ideal for emergency cash and short-term goals, while CDs are perfect for locking in high rates over longer periods.
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 4.46% 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
| Product | APY | Min. to Earn | |
American Express® High Yield Savings
Member FDIC.
APY
3.80%
Rate info
3.80% annual percentage yield as of December 29, 2024. Terms apply.
Min. to earn
$0
Open Account for American Express® High Yield Savings
On American Express's Secure Website. |
3.80%
Rate info
3.80% annual percentage yield as of December 29, 2024. Terms apply.
|
$0
|
Open Account for American Express® High Yield Savings
On American Express's Secure Website. |
Capital One 360 Performance Savings
Member FDIC.
APY
3.80%
Rate info
See Capital One website for most up-to-date rates. Advertised Annual Percentage Yield (APY) is variable and accurate as of Dec. 6, 2024. Rates are subject to change at any time before or after account opening.
Min. to earn
$0
Open Account for Capital One 360 Performance Savings
On Capital One's Secure Website. |
3.80%
Rate info
See Capital One website for most up-to-date rates. Advertised Annual Percentage Yield (APY) is variable and accurate as of Dec. 6, 2024. Rates are subject to change at any time before or after account opening.
|
$0
|
Open Account for Capital One 360 Performance Savings
On Capital One's Secure Website. |
Western Alliance Bank High-Yield Savings Premier
Member FDIC.
APY
4.46%
Rate info
The annual percentage yield (APY) is accurate as of November 7, 2024 and subject to change at the Bank’s discretion. Refer to product’s website for latest APY rate. Minimum deposit required to open an account is $500 and a minimum balance of $0.01 is required to earn the advertised APY.
Min. to earn
$500 to open, $0.01 for max APY
Open Account for Western Alliance Bank High-Yield Savings Premier
On Western Alliance Bank's Secure Website. |
4.46%
Rate info
The annual percentage yield (APY) is accurate as of November 7, 2024 and subject to change at the Bank’s discretion. Refer to product’s website for latest APY rate. Minimum deposit required to open an account is $500 and a minimum balance of $0.01 is required to earn the advertised APY.
|
$500 to open, $0.01 for max APY
|
Open Account for Western Alliance Bank High-Yield Savings Premier
On Western Alliance Bank's Secure Website. |
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 |
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.
Our Research Expert
Steven Porrello writes about personal finances topics ranging from credit card offers to Costco deals to choosing the best places to park your cash.
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