How much interest do you earn on one million dollars?
A lot of people end up at my site after searching on the question “How much interest do you earn on one million dollars?”
So, I’ve decided to give them a proper answer: How much interest do you earn on a million dollars? The answer is, of course, it depends.
It depends on several factors including: What is the interest rate? Over what period of time? How often is the interest calculated and paid during the period?
What is the interest rate?
Obviously the higher the interest rate, the better. Even small differences result in large amounts of money over long periods of time. As a practical example, we’ll use a 4% interest rate which is easily available with an Emigrant Direct Savings account.
Over what period of time?
The longer the better. Compound interest works it’s magic best over long periods of time. I’ll give a couple of examples using different periods of time.
How often is the interest calculated and paid?
The more often, the better. Is the money compounded yearly, quarterly, monthly, or daily? For our example we’ll assume the money is compounded monthly.
So, to answer the question, how much interest do you earn on One Million Dollars (assuming a 4% interest rate, compounded monthly)?
One Day – $109.59
One Month – $3,333.33
One Year – $40,741.54
Five Years – $220,996.59
Ten Years – $490,832.68
Twenty Years – $1,222,582.09
So, it doesn’t take long for the money to really add up. And there are a lot of ways to get a higher interest rate than 4%. Use a compound interest calculator to experiment with different interest rates, periods of time, and compounding periods.
That’s at 4%… but people that have $1M+ do not let it sit in Risk Free accounts (yes, I know that you know that) — so, that $1M will likely earn anything but your 4%.
10%? 15%? 20% or more? Maybe so!
- Steven Burda -
e-mail: steven.burda.mba @gmail.com
John Chambers , disabled
If you really want to know how much interest one million can make then stop all the talk and do something. Just send me one million dollars and I will invest it.
if invested in corporate bonds (stellar companies like Levis Strauss, Starbucks borrow money all the time) you’ll get around 9%.
or if you’re like john kerry’s wife, theresa heinz, you put them in TAX-FREE munis!
Most people who ask this question are REALLY asking: “is $1 million ENOUGH?” … for most people the answer is NO.
Here’s why: http://7million7years.com/2008/01/30/its-never-going-to-be-enough/
As others have said, tax is a critical issue here. Not sure about the US, but in the UK savings are taxed at 20% to 40%, once you’re above a small income band. It’s much more efficient to put a million pounds into stocks, where there’s no higher rate tax to pay. As I say, your US readers will need to look into the equivalent tax bands over there.
[...] but, here’s the answer to the “million dollar” question courtesty of Accumulating Money anyway: So, to answer the question, how much interest do you earn on One Million Dollars (assuming [...]
The question is interesting. Unfortunately, returns are less impressive after reflecting tax and inflation. Not that I’d turn down $1 million ;)
Earning interest from the bank may give you an amount which is not that much if you would use it for your investment in financial market, etc.
Much better off putting that million dollars into an equity portfolio that pays dividends if you’re going to try and live off it for the long-term. Sure the value will oscillate wildly (as we’re seeing now) but at least the payments should rise over time and hopefully match or beat inflation.
What are the taxes on 1 million dollars personal in Ca.Thank You
How can i earn one millions?
how to is work
What interest rate can I get with 50 million dollars a month is 10%-20% would be safe. (five years) will you chart out my earning for I cna see please.
I have 3million dollars My childrens father just passed away and they want to borrow the money at 3.25% for one year. They will pay me 8,000.00 a month. Is this a smart thing for me to do ? I am 48 years old. am single and my house is paid for.
rachel i think that is a very poor decision to be even considering. the only thing worse is that you are looking for advice on the internet.
Rachel, I have to agree with Chris. Mixing family and money is usually nothing but a recipe for disaster.
40k a year for letting money sit in an account is great! Now, how to get one million dollars?
What about REIT? I was reading couple of article on them and I saw that they offer 7 to 12 percent yield. But, the only problem is the tax rate, I read that the IRS tax you at 25 percent?
dude invest in mutual funds u will get interest around 12 13 15 or 20
I have to agree with tushank. The best place to put that kind of money would be in a mutual fund. Preferably an index mutual fund. History suggests that you’ll get an average of 10% a year.
i would take that million dollars and rub in on my [censored]. money is meaningless, valueless paper that brainwashes the heard into living in this make believe system. you are all [censored]
Rachel I bet you wouldn’t receive 1/2 of that money from your kids (no disrespect)..I have my million and u have yours…u spend yours and i’ll spend mine…no more gold diggers…the only business I lost money on was the one that my brother and I had as partners–bad idea. I’m 50 years young, contact me…I have my money invested in commercial real estate. Makes me more money than any Mutal Fund out there. Contact me and let’s talk, u sound interesting!
Best advice I ever got in regards to family and money is..
“Don’t lend money you don’t have to give”.
I found this works in relation to friends too.
If you don’t know why this works. Try it!
sounds like a nine year old child wrote this article. 4% of 1 million is, duh. what i think the question was looking for; was what rate of interest one could achieve if one had enough money to put into investments that are not availible to the mass market. But thank you for the simple mathematics.
Buy Gold Bullion, in the last 10 years it has risen 440%
So average 44% per year compound that in yer pipe and smoke it.