If you have $200,000 readily available in your bank account currently, it can be tempting to invest it strategically. Or you can use it to buy real estate. Or, right now, it may even be more tempting to just simply sit still and let today’s economic volatility play out before making any quick moves. But that could be a costly mistake, especially when there remain multiple, viable and secure ways in which you can take advantage of today’s elevated interest rate climate to boost your bottom line. 

Traditional savings, high-yield savings, money market and certificates of deposit (CD) accounts all offer different ways to do just that. Because of the way they operate, however, and the rates and structures that they employ, your interest-earning capacity will look much different when compared to one another. That’s critical information to have no matter your deposit amount but it’s even more important to understand when there’s a large, six-figure amount such as $200,000 at play. 

So, how much interest can you actually earn with this much money deposited over the next year? Below, we’ll break down the returns on four separate account options.

See how much interest you can be earning with a high-yield savings account now.

How much interest can $200,000 earn over the next year?

Interest rates will vary considerably based on the account type, the bank in question and, if it’s a CD account, the term length. Here’s how much interest each can generate over the next year, calculated using the top rates for each account, the assumption that the variable rate accounts don’t change and the understanding that no additional deposits or withdrawals are made where applicable:

• $200,000 traditional savings account at 0.38% (variable rate): $760.00
• $200,000 money market account at 4.00% (variable rate): $8,000.00
• $200,000 high-yield savings account at 4.10% (variable rate): $8,200.00
• $200,000 1-year CD account at 4.40% (fixed rate): $8,800.00

Savers are positioned to earn between $760 and $8,800 in interest with their $200,000 by August 2027. And with three of these accounts employing variable rates well-positioned to increase should the Federal Reserve raise interest rates again, these estimates could grow to be even higher. 

That said, the CD rate you lock in now will remain the same until the account has matured so it’s important to weigh the possibility of an interest rate hike against what can actually be secured with the CD to better determine your next steps.

Learn more about your savings account options online today.

Why a traditional savings account is worth skipping now

As can be seen with the interest earnings outlined above, whether you have $200,000 to work with or just $200, keeping it in a traditional savings account with a rate comfortably under 1% isn’t the best approach. Not only are you not maximizing your funds by keeping the money there, you’re also virtually losing money by not taking advantage of one of the higher-rate alternatives. Just be sure of your ability to keep the funds locked away for the full term, should you ultimately decide on the CD account, as an early withdrawal fee will be costly, especially on a deposit of this size.

The bottom line

A $200,000 deposit made into a savings account now can generate a return worth less than $800 or more than $8,800 over the next year and potentially even more if rates rise in the interim. While you may be able to generate more by investing this money instead of depositing, you can also lose it much more rapidly with that alternative. Evaluate all of your options carefully, then, but don’t wait too long to act either. With multiple, viable ways to earn more on your money now, it makes sense to start the process as soon as possible.