This Is How Much Money You Can Make With $30K in a High-Yield Savings Account

If you have $30,000 to save, putting it in a high-yield savings account (HYSA) can be a smart move. Right now, many HYSAs offer around 4.00% APY. But how much money will that actually make you? Let's break it down.

How much will you earn over time?

Your savings grow with compound interest, which means you'll earn interest on your initial deposit and your earnings. Here's how much a $30,000 deposit would earn with an APY of 4.00% if left untouched:

• 1 year: $1,200 in interest
• 5 years: $6,500 in interest
• 10 years: $14,407 in interest
• 20 years: $35,734 in interest

Your money would more than double to $65,734 after 20 years, and all you'd need to do is let it sit safely in the account.

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Granted, savings account APYs can change at any time. You may earn a return of more or less than 4% over the years. Still, you can see the power of compound interest at work.

Is a high-yield savings account the best place for your money?

A high-yield savings account is great for short-term savings and emergency funds. They keep your deposits safe and FDIC insured, and you can withdraw funds at any time.

Beyond that, however, you may want to look to other options with higher potential returns.

Treasury bonds

Treasury bonds are government-backed and safe, and they offer high yields for those who can commit their money for a long time. The most recent interest rate on 20-year Treasury bonds was 4.625%. At that rate, a $30,000 investment would earn $44,102 in interest over two decades.

The stock market

The stock market has historically returned an average of 10% per year (before inflation), as measured by the S&P 500 Index. Even if the market doesn't perform that well over the next 20 years, you could earn returns far higher than the APY of any savings account.

If you opened a brokerage account and invested $30,000 in an S&P 500 index fund that gained an average of 7% per year, here's what you would earn:

• 1 year: $2,100
• 5 years: $12,077
• 10 years: $29,015
• 20 years: $86,091

That means your portfolio would be worth $116,091 in 20 years.

Stocks can be volatile, and short-term losses are guaranteed to happen sometimes. However, long-term investing has historically outperformed savings accounts. For big, long-term goals like retirement, investing in the stock market gives you the best chance of building wealth.

Which option is best for you?

A high-yield savings account is a great place to grow your money safely. With a 4.00% APY, you can earn thousands over time without risk.

However, if you're saving for the long haul, consider investing in stocks or bonds. Choosing the right option depends on your goals, risk tolerance, and timeline.

Whatever you decide, the most important step is to start saving and investing as early as possible.