Banking / Interest Rates

5 min Read

Written by Andrea Norris

Edited by Melanie Grafil

shapecharge / Getty Images

Perhaps you recently moved $10,000 out of the stock market or away from an underperforming investment, or maybe you tucked that money into anemergency fund. Either way, you need that money to keep earning more for you.

Consider putting that $10,000 in an interest-paying account. How much you earn depends on the financial asset and institution that you choose. There are four financial assets to consider when determining how much interest $10,000 can earn in one year: Series I savings bonds, certificates of deposit, high-yield savings accounts and money market accounts.

## How Much Interest Does $10,000 Earn in a Year?

If you have $10,000 to leave in a CD,high-yield savings account, money market account or Series I savings bond this year and interest rates remain high — 3.00% to 6.89% annual percentage yield — you can earn from $300 to almost $700 in interest over the next 12 months. Here’s a look at the current interest rates of these assets.

## Series I Savings Bonds

Series I savings bonds, issued by the U.S. Government, are financial securities that earn a variable inflation rate set twice each year and a fixed rate of interest. The combined rate is currently 5.27% for bonds issued between Nov. 1, 2023 and April 30, 2024.

Put $10,000 into I bonds and you can earn about $527 this year — assuming the bond’s variable inflation rate remains roughly the same.

## CDs

Many financial institutions are currently offering attractiveCD rates. If you invest $10,000 in a 1-year CD, you can earn between 4.15% and 5.00% — the equivalent of $415 to $500 — depending on the bank or credit union.

The advantage of CDs is that your APY is guaranteed for a fixed term — unlike with other accounts and bonds, which change their rates as the fed rate rises and falls.

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## High-Yield Savings Accounts

If you put $10,000 into a high-yield savings account, you can earn from $300 to $420 in a year — assuming your variable high-yield savings rate remains above 3.00%. Several banks are offering rates between 4.35% to 5.27% APY.

## Money Market Accounts

Money market accounts are earning slightly less than high-yield savings accounts. However, some currently have an interest rate from from 3.25% up to 5.46%. So, your $10,000 can earn as much as $325 to $546 in interest this year.

## How To Calculate Yearly Interest

Calculating yearly interest is a straightforward process, especially when you start with a specific amount, like $10,000. The key is to understand the interest rate and the basic formula for calculating simple interest. Here’s how you can do it:

**Know your principal amount**. This is the initial sum of money you’re starting with. In this case, it’s $10,000.**Understand the interest rate**. Interest rates are usually given as an annual percentage. For example, if a bank offers a 3% interest rate on a savings account, it means that for every $100, you’ll earn $3 in interest per year.**Use the simple interest formula**. The formula to calculate interest is: Interest = Principal ?– Rate ?– Time.

In this formula, the Principal is the amount you’re starting with ($10,000), the Rate is the annual interest rate (expressed as a decimal), and Time is the duration in years.

**Calculate the interest**. For example, if you have $10,000 at a 3% interest rate for one year, you would calculate the interest as follows: $10,000 ?– 0.03 ?– 1 = $30. This means you would earn $300 in interest over one year.**Adjust for different scenarios**. You can use this formula to calculate the interest for different rates and time periods. Just plug in the new rate or change the time period to get your answer.

Remember, this method calculates simple interest, which is interest earned only on the principal amount. Some investments might use compound interest, where you earn interest on both the principal and the previously earned interest, leading to potentially higher returns over time.

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## Takeaway

The good news is that you have several options for earning at least 3.00% in interest. You’ll have easier access to your funds with a money market or high-yield savings account, but you’ll typically earn less than if you put your money into CDs or I bonds. Before choosing a financial asset or institution, consider fees, withdrawal limitations, penalties and interest rates.

### Explore More on Interest Rates

- What’s the Average Interest Rate for Savings Accounts?
- APR vs. Interest Rates: What’s The Difference?
- Can You Earn 7% Interest On Savings Accounts? What You Need To Know
- How Much Interest Would You Earn on a Million Dollars?

### FAQ

- What is the interest on $10,000 per month?
- With a money market or high-yield savings account, a 3.00% to 3.75% interest rate on $10,000 will earn you about $25 to $30 monthly until you withdraw your money.

- How much interest can $100,000 earn in a year?
- If you put $100,000 in CDs, high-yield savings or a money market account for a year, you could earn anywhere from $3,000 to $5,000 based on current interest rates.
- However, you cannot purchase $100,000 per year in I bonds.

- How do you earn 10% interest in a year?
- While you cannot currently earn 10% interest on a bank account in the U.S., you might see 10% returns investing in the or other blue chip stocks. However, these returns aren't guaranteed – you might end up losing money if the market turns down.

*Information is accurate as of Jan. 15, 2024, and is subject to change.*

*The article above was refined via automated technology and then fine-tuned and verified for accuracy by a member of our editorial team.*

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