Here’s How Much You Could Earn in Interest With These 4 Different Investments
Written by
Karen Doyle
Edited by
Rebekah Evans
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Everyone wants to get the best possible return on their investments, but it can be challenging to know what that is. Some investments are very safe, but don’t offer a very high return. Others have the potential for great returns, but they may be more volatile. The key to successful investing is to weigh the possible risk with the potential return and find a combination you can live with.
Here are four investments that range from very conservative to much more volatile and how much you might earn if you put your money in each of them.
High-Yield Savings Accounts
A high-yield savings account can pay a good rate of interest when interest rates generally are relatively high. While the interest rate is a specific percentage, it can vary over time, so it’s important to keep an eye on your rate, particularly if the Federal Reserve Board of Governors votes to lower rates.
Some high-yield savings accounts currently pay 4% APR or more. Openbank, for example, offers 4.75% APY in most areas of the country (except the northeast, but they’re expanding there soon). A $10,000 investment at this rate would be worth $10,486.43 after a year.
Treasury Bills
Treasury bills are a very safe investment, as they are backed by the full faith and credit of the U.S. government. Treasury bills are sold at a discount to face value and when the bills mature, you receive the face value. The difference between the face value and the price you pay is your return. As of Feb. 27, 2024, the rate for a one-year treasury was 4.122%. If you purchase $10,000 in one year treasury bills at that rate, you would earn $434.91 in interest in a year, bringing your total investment to $10,434.91.
Stocks
Investing in stocks carries more risk than most investments on this list, so it also has the potential for a higher return. Since predicting future returns for stocks is impossible, we looked at last year’s return for the S&P 500. If you had invested $10,000 in January 2024 and had reinvested all your dividends and interest, you would have had $12,632.60 at the end of the year. This represents a 29.02% nominal total return, according to Of Dollars and Data.
Gold
The price of gold is somewhat unpredictable, so you can’t say for sure what your return would be over the next year. But we can look at its recent historical performance.
Gold had a very strong year in 2024. According to the World Gold Council, if you had invested $10,000 in gold on Jan. 3, 2024, your investment would have been worth $12,776.55 by Dec. 31, 2024.
No one has a crystal ball when it comes to investing and the return on even conservative investments like savings accounts can vary over time. Some investments have more predictable returns than others, but every investment carries some kind of risk. Doing your research and investing in a portfolio that has a variety of different investments is your best long term strategy.
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