How Much Interest Can $1.5 Million Earn Per Year?

Whether you’re saving to retire or have just received a considerable windfall, it’s important to know where to put your money so that it will grow. There are multiple ways money can build interest, but how much interest does $1.5 million earn per year? We break down several ways you can save your $1.5 million, starting with the lowest yield and lowest risk, and moving on to higher yield and higher risk. If you want to automate the asset allocation of your portfolio, consider working directly with a financial advisor.

How Much Interest $1.5 Million Can Earn Per Year

Earning interest in your investments is how most people can grow their wealth and increase their available funds during retirement. The amount that you can earn is going to depend on how much money you have to invest and what types of investments you choose. Riskier investments have a higher potential to return more interest on your money than safer investments, but the risk might be too much for some.

If you’re looking to invest $1.5 million to maximize the amount of interest you can earn, the answer to how much that will be depends on your investment choice. We’re going to cover some of the most popular choices to invest your money to earn interest and talk about how much you could earn from each. Here are five popular asset options to earn interest on $1.5 million.

1. High-Yield Savings Accounts and Money Market Accounts

High-yield savings accounts are savings products offered by some banks with an average percentage yield (APY) of 4.5% or more per year—more than 10 times the national average (0.42% in May 2025, according to the FDIC). They are incredibly safe, with the FDIC insuring them up to $250,000 per depositor, per account category, per institution. Putting the full $1.5 million in high-yield savings accounts could produce upward of $67,500 in interest.

Money market accounts are similar to high-yield savings accounts. Unlike a savings account, they come with a debit card and you can write checks. Withdrawals are usually limited to six a month, and you may have to keep an account minimum or pay account fees. Still, some accounts can generate between 3.5% and 4% yearly with hardly any risk. That means your $1.5 million could earn between $52,500 and $60,000 in annual interest.

Chances are, you could use a savings account like one of these, but if you want to grow that money mor effectively, you’ll need to put at least some of it elsewhere. A more balanced investing approach could potentially provide you with an opportunity to maximize interest without sacrificing the safety of investments like a savings account.

2. Certificates of Deposit (CDs)

The next step up the ladder in terms of risk and reward is a certificate of deposit (CD). With a CD, you deposit your money with a bank or credit union for a set term with the agreement that they will pay out at a specified APY after the term is up.

How much interest does $1.5 million earn per year on a CD? Assuming you put the money in a one-year CD that compounds daily and earns 4% per year, you’d receive more than $61,000 in total interest. That sounds like a great deal, right? Well, that depends on the market. If inflation outpaces your CD’s APY, you’re losing purchasing power.

For example, the rate of inflation in 2022 was 8%. If your money was tied up in a CD producing 4% APY, your money would have lost 4% of its value by the end of the year. While CDs are low risk, in a high-inflation environment there are better places to put your money. While inflation was only 2.7% in 2024, it’s important to understand all considerations.

3. Annuities

how much interest does $1.5 million earn per year

Annuities are long-term investments that can give you a slightly higher return on your money. They’re typically used in retirement planning. They allow you to save tax-free and only pay taxes when you withdraw. Annuities are financial contracts you sign with an insurance company, usually with the agreement that they’ll pay you out regularly.

Not all annuities are the same. Some defer payment for a long time, while others pay out almost immediately. There are a few different types of annuities, each with its level of risk and return. Here’s how $1.5 million might grow with each type of annuity.

Fixed Annuities

A fixed annuity is the most basic version of an annuity. Annuity rates change daily. For the sake of simplicity, let’s talk about an immediate fixed annuity. At the time of this article, for an annuity that pays out over five years, you can get a rate of around 6.45%.

How much interest does $1.5 million make per year with a fixed annuity? At 6.45% over five years, you would earn about $550,000 in total interest. The fixed annuity would then be worth over $2 million.

Indexed Annuities

An indexed annuity is a next notch up in terms of risk and returns of annuities. An indexed annuity is tied to the performance of a specific stock market index, like the S&P 500. This means the value of the annuity can go up if the market performs well.

There’s more risk involved, but many guarantee a minimum percentage of the principal, plus a small amount of interest. The upside is that, if the market performs well, you could see more returns. Beware though, indexed annuities come with caps that will limit your return. Each annuity has different terms. Even if the index returns 12%, you may not receive that rate of return.

Variable Annuities

Variable annuities are annuity contracts that offer the highest potential for return. However, unlike a fixed annuity, their return is not guaranteed. With a variable annuity, you will choose where the money gets invested. Depending on your choice you could see a large return, or you could lose money.

So, how much interest does $1.5 million earn per year when invested in a variable annuity? Let’s say you put your $1.5 million into a variable annuity that earns 7% annually. Over a 10-year accumulation period, you’d earn $1.45 million in interest. That’s a good return and means you picked a solid investment. However, just because you could get a 7% return doesn’t mean you will. The market can be unpredictable.

4. Funds and Stocks

Of course, you could invest your $1.5 million in the stock market. The aforementioned S&P 500 is a leading index that has shown an average annual rate of return of around 10% over the years. You can’t directly invest in the index, but an easy way to get in on the action is to invest your money in an index fund or exchange-traded fund (ETF) that tracks the S&P 500 performance.

It should go without saying that nothing is guaranteed in the stock market. A boon year with a 15% return could earn you $225,000 in interest from your $1.5 million. On the other hand, a recession could hit and the market could swing the other way, turning your $1.5 million into $1.25 million, or worse.

However, given the rule of thumb that the stock market grows around 10% on average each year, if you invest and hold, you could make out over time well despite dips along the way. Let’s say you put your $1.5 million into various funds and keep them there for 20 years. With an average annual return of 10% compounding over those 20 years, your $1.5 million will turn into over $10 million.

5. Real Estate

Real estate is another place you could put your $1.5 million. But don’t take that to mean the housing market. Specifically, an investment where you could see a decent return is what’s called a real estate investment trust (REIT). While real estate can be volatile, some REIT markets have outpaced the S&P 500.

On top of that, REITs are known for their dividend payouts, often more than double that of the S&P 500. That means that, on top of your interest return, you can get an extra annual payout of 2% to 4% on average.

For example, say that your REIT grows by 13% in a year, with a 3% dividend on top. That’s growing your $1.5 million by 16%, or an extra $240,000, in one year. Of course, if the real estate market falters, or if the REIT you invest in is mismanaged and goes belly-up, you could lose it all.

Bottom Line

How much interest does $1.5 million earn per year? It really depends on where you put it. If you stash it in a low-risk account, your return isn’t going to be high. However, if you invest it in assets, your return isn’t guaranteed. This highlights the importance of aligning your investments with your needs. The younger you are, the more risk you may be willing to take. However, if you’re already retired or nearing retirement, you want to keep that nest egg safe.

Tips for Investing

If you’re looking to maximize the interest or income that your investments are earning in retirement, you may want to consider working with a financial advisor. Your advisor can help you create the right asset allocation mix to meet your financial goals. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
It’s important to diversify your portfolio and know what your risks are. Use our asset allocation calculator to start building the right portfolio to meet your needs.