How Much Interest Can $50,000 Earn Per Year?

If you have $10,000 to invest in interest-producing assets, understanding how much each asset earns per year in interest is key. Let’s break down how much interest $10,000 can earn in a year, depending on what type of investment you’re considering. A financial advisor could help you identify the best interest income opportunities for your financial plan.

Liquidity and Risk Tolerance Considerations

$10,000 is a significant sum. But the amount of interest you can earn on this money varies widely. Two major factors impacting your returns are liquidity and risk tolerance.

Liquidity indicates how easily accessible your funds are. On one side of the liquidity scale are savings accounts which give you access to your funds at any time. On the other side, you’ll find certificates of deposit (CDs) that lock up your funds for a specified period of time.

The amount of liquidity you need varies based on your financial situation. If you have a robust emergency fund, then illiquid investments can fit into your long-term plans. If you don’t have emergency savings to tap into immediately, then a more liquidity opportunity is likely the right move.

In addition to liquidity, your risk tolerance will impact your interest-earning choices. Typically, investments that produce more interest come with more risk attached. You’ll have to weigh the lost potential earnings against the safety of the opportunity.

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

If you want to invest $10,000 into an interest-earning opportunity, then you have plenty of options. As a general rule, you can earn more in interest by taking on more risk. Let’s take a look at six ways you can earn interest and how much you can with $10,000 a year:

High-yield savings account: A savings account at a financial institution can offer you extreme liquidity. Safety is also included since bank savings accounts are guaranteed for up to $250,000 by the Federal Deposit Insurance Corporation (FDIC) and credit union savings accounts are guaranteed for up to $250,000 through the National Credit Union Administration (NCUA). The interest you can earn depends on whether your money is in a brick-and-mortar bank or an online bank. As of July 2025, you could earn up to 4.66% with a high-yield savings account.
Money market account: Generally, a money market account pays more than a traditional savings account. Since money market accounts were paying well over 4%, with some institutions between 1% to 1.60% in interest, you can earn between $100 to $160 per year with $10,000.
Money market funds: A money market fund is a mutual fund that invests in short-term debts. Currently, many money market funds pay between 3.9% and 4.1% in interest. With that, you can earn between $390 to $410 in interest on $10,000 each year.
Certificates of deposit (CDs): CDs are offered by financial institutions for set periods of time. The lack of liquidity translates into higher interest payments. You can earn between 3.9% and 4.45% depending on the CD’s duration. Typically, a longer term means a higher interest rate. So, you can earn between $390 to $445 per year on a CD.
Treasury securities: Treasury securities, like bonds, notes and bills, issued by the federal government are considered extremely safe investments. Bills have a maturity of less than a year, notes have maturities from two, five and 10 years and bonds are for 20 and 30 years. The amount you can earn varies based on market conditions. But current rates range from about 4.04% for a bill to 4.29% for a 10-year note. So, as of now, you could earn between $404 and $429in interest for the year.
Series I savings bonds: iBonds are also issued by the federal government. As of July 2025 they are paying 3.98%.
Corporate and municipal bonds: Local governments issue municipal bonds to pay for major projects and corporate bonds are sold by large companies to borrow funds. Neither of these options is as safe as a U.S. treasury bond. But both tend to offer higher interest payments. How much interest you can earn in a year will depend on the vehicle you choose. As an example, a $10,000 corporate bond could earn $539 in one year based on a 5.39% May 2025 rate. You should keep in mind, however, that interest rates fluctuate. The price goes up when interest rates fall and decreases when interest rates go up.

You may want to work with a financial advisor who can help advise you on the best place to put your money within your investment portfolio that will help you reach your long-term goals.

Investment Tips to Help You Earn Interest

A man reviews how much interest $50,000 earns per year.

Investing can be a powerful way to grow your wealth over time, but knowing where to start can be daunting. By understanding some key investment tips, you can make informed decisions that help you earn interest and achieve your financial goals. Here are some essential strategies to consider.

Diversify your portfolio: Diversification involves spreading your investments across various asset classes, such as stocks, bonds and real estate. This strategy helps mitigate risk because if one investment performs poorly, others may perform well, balancing your overall returns.
Understand compound interest: Compound interest is the process where the interest you earn on an investment is reinvested to generate additional earnings over time. By starting early and opening a compound interest account, you can significantly increase your wealth in the long run.
Set clear financial goals: Having specific financial goals can guide your investment strategy and help you stay focused. Whether you’re saving for retirement, a home, or education, knowing your objectives will influence your risk tolerance and investment choices.
Stay informed about market trends: Keeping up with market trends and economic news can help you make timely investment decisions. Understanding how different factors affect the market can provide insights into when to buy or sell assets.

By implementing these investment tips, you can enhance your ability to earn interest and build a robust financial future. Remember, investing is a long-term endeavor, and patience, along with informed decision-making, is key to achieving your financial aspirations.

Taxes on Interest Income

When evaluating how much interest your $10,000 can earn in a year, it’s important to account for taxes. Most interest income is taxed as ordinary income, which means it’s subject to your regular federal (and possibly state) income tax rate.

For example, if you invest in a CD yielding 5%, you’d earn $500 in interest over the year. However, if you’re in the 24% federal tax bracket, you’d owe $120 in taxes, bringing your net return down to just $380. Higher earners in the 32% or 37% brackets could see even more of their interest income go to taxes.

To reduce your tax burden, consider using tax-advantaged accounts, such as a Roth IRA, where qualified interest earnings grow tax-free. Alternatively, municipal bonds often offer tax-free interest at the federal level, and sometimes at the state level if issued in your home state, making them attractive for investors in higher tax brackets.

Bottom Line

A group of investors drafting an investment plan.

If you have $10,000 to invest in a fixed-income security you have many choices, including savings accounts, bonds and more. Although the amount of interest you can earn varies, you’ll likely find a level of liquidity that works well for your finances. Consider working with a financial advisor to help you with your long-term investments.

Tips for Investing

A financial advisor can help you generate the maximum interest that is compatible with your objectives and requirements. 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.
A certificate of deposit ladder that splits funds between a number of CDs with varying maturities is an easy and effective way to get a good rate of interest without taking much risk. As shorter-term CDs mature, the funds can be reinvested in new CDs, which reduces interest rate risk in an environment when rates are rising.