$40,000 in Savings Can Earn $152 to $1,720 Over 1 Year
Updated
Updated · CBS New York · Aug 27
$40,000 in Savings Can Earn $152 to $1,720 Over 1 Year
1 articles · Updated · CBS New York · Aug 27
Summary
$40,000 parked for 12 months would generate $152 in a traditional savings account, $1,600 in a money market account, $1,640 in a high-yield savings account and $1,720 in a 1-year CD.
The widest gap comes from rates: 0.38% for traditional savings versus 4.00% to 4.30% for the other three account types, making low-yield accounts a major opportunity cost.
A 1-year CD offers the highest stated return but locks in funds and can trigger an early-withdrawal penalty, while money market and high-yield savings accounts carry variable rates that could change with market conditions.
The comparison lands as inflation remains above the Federal Reserve's target and rate cuts in 2024 and 2025 give way to expectations that rates could hold or even rise in coming months.
Stocks could return roughly $4,000 to $6,400 on $40,000 based on long-run averages, but unlike insured savings products they also risk losses to principal.