how much interest would i get if i had a million dollars in a savings account for 1 year?

Question

just use the most common form of compounding and a standard interest rate for common banks

wow, 0.20%? that's discusting. didn't banks used to give at least 3%?

Answer 1

I looked up the savings interest rate at Bank of America and it is 0.20% APY (what a ripoff!) so at that rate, you'd only make about $2000. Typically, if you walk into a bank with a million, you can negotiate a higher rate but it still wouldn't be stellar at BoA. You can do better at credit unions still better if you put it in a 12 month CD at about 5% (which would be $50000 + compounding).

Banks used to pay better rates and they used to have very few fees but they've gotten greedy. I'll never deal with a bank again. I'm in a credit union which is much better but I'm seeing some signs that they are slowly heading in the same direction.

Answer 2

Ha! I'd never go to a "regular" savings account at a bank. You have many alternatives, one of which would be an "online" savings account (which is offered by most banks as well). Rates will usually be about 4-5%. This would be 40,000 - 50,000 dollars. You could also put it in a CD account and maybe get a little higher.

I currently get 4.5% interest with an ING Direct savings account. Check out the difference in rates between regular banking and internet banking on both bankrate.com or even just ingdirect.com.

To figure out your interest, just choose the rate you think you'll get and put it in decimal format (ex. 5% would be .05 or 12% would be .12) and multiply it by 1,000,000 or however much you expect to save. This can also be done on bankrate.com.

You have tons of alternatives, many of which you can find on www.bankrate.com. Or, invest it in an indexed mutual fund and earn even more. Happy investing.

Answer 3

Online savings accounts give 5% or higher.

1,000,000 x 5% = 50,000

http://money.cnn.com/2007/01/28/news/economy/bc.hsbc.direct.online.reut/index.htm