How much interest will a $35,000 high-yield savings account earn over the next year?
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Saving any sizable amount of money in today’s inflationary economic environment can be challenging, even for strategic savers. So, once you’ve built up your funds to a large, five-figure amount such as $35,000, giving up full access to that much money may not be particularly appealing. And that’s what will be required if you elect to move it into a high-rate certificate of deposit (CD) account, for example. While returns here will be substantial, you’ll need to freeze the money in the account to earn that interest.
Fortunately, that’s not a concern with a high-yield savings account. Interest rates on this account are competitive with the top CD rates. And you won’t need to sacrifice access to your funds to earn a big return. While these rates are variable and subject to change based on market developments, that’s less of a concern now that the Federal Reserve has continued to keep interest rates frozen. If an interest rate hike occurs later this year, savers may even earn more than they had anticipated should their account’s rate rise alongside it. So, if you’re looking for a smart and profitable home for your hard-earned $35,000, this could be the account for you.
Before transferring any money, however, it helps to know the interest-earning potential associated with a high-yield savings account of this size. Below, we’ll do the math.
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How much interest will a $35,000 high-yield savings account earn over the next year?
While calculating the interest-earning potential of a high-yield savings account will require some speculation, with today’s rates forecast to hold steady for the foreseeable future, savers can still gain an approximate idea of how much interest they stand to earn over the next 12 months.
Here’s how much interest a $35,000 high-yield savings account will generate over the next three, six, nine and 12 months, then, using today’s top rate and the assumptions that it stays constant and that no withdrawals or deposits are made during this period:
- $35,000 high-yield savings account at 4.10% after three months: $353.36
- $35,000 high-yield savings account at 4.10% after six months: $710.29
- $35,000 high-yield savings account at 4.10% after nine months: $1,070.83
- $35,000 high-yield savings account at 4.10% after 12 months: $1,435.00
Savers stand to earn hundreds of dollars with a high-yield savings account of this size in just three months (or more than $100 per month) or close to $1,500 over the next year. That said, if rates rise here, even slightly, these returns could increase, too.
A variable rate works both ways, however, so returns could also decline if the rate climate eventually cools. With that appearing unlikely now, however, this could be a viable savings account worth exploring for those looking to earn a competitive rate on their money without having to give up access to their funds to earn it.
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How much interest will a $35,000 CD account earn instead?
Savers can find a 1-year CD with a top rate of 4.15% if they take the time to shop around online now. At that rate, savers will grow their $35,000 by another $1,452.50 when the account matures in July 2027. And that return will be guaranteed in a way the high-yield savings account returns outlined above will not be.
Still, savers will need to feel comfortable leaving this much money frozen over the next year, as an early withdrawal fee levied against the account can potentially negate all of the interest earned to the point of withdrawal. For some savers, that may not be a risk worth taking when the difference between the two accounts over the next year is less than $20.
The bottom line
Savers stand to earn hundreds of dollars with a $35,000 high-yield savings account in just a few months or more than $1,400 in total over the next year – assuming today’s interest rates remain steady. If savers prefer a fixed rate and guaranteed return, however, they can secure both with a CD. So both are worth serious consideration now. After all, it likely took time and effort to secure a five-figure amount in your savings account, so it makes sense to grow and protect it as best you can both now and into the future.
