If you had $1 million dollars in one US bank acct, what is the interest earned after one year?

Question

Using current rates what is the interest earned after one year?

Do you pay taxes on money earned via interest?

Also, will normal banks hold that much money in one account?

Answer 1

You will earn interest $ 52,500 for one year on one million dollar deposit.

You have to pay states taxes on the interests earned.

All banks accepts $ 1 million dollars deposit. This is not a big money in the eyes of banks.

Answer 2

Current CD rates (Certificate of Deposit) at banks average about 5.15% for a 12 month term. The interest earned would be $51,500. American citizens would add the interest income to their other income and pay federal income taxes dependent on their total income, dependents, filing status, itemized or standard deduction, etc. US tax rates are progressive...10% for the first $X, 15% for the next $Y, 25% for the next $Z and so on up to 35%. Some states, but not all, also require that you pay state income tax.

Bank accounts are insured by the Federal Deposit Insurance Corporation (FDIC) up to $100,000. Hopwever, the chance of a bank failure is fairly remote and almost non-existent with major banks.

Answer 3

There is NO SUCH THING as the current rate for deposits that large. Anywhere near 10% of that amount and you would negotiate a rate with the financial institution. Any bank will accept as much as you are willing to deposit. You account is only Federally insured up to $100,000 per institution.

Yes, interest is taxable income in the US.

Answer 4

The easiest way to find out is to calculate the first month's interest, and know that the amount you earn will be a little higher each month after. Use this equation: 1,000,000 x (1 + (0.01/12)) The first month's interest would amount to about $833.

Answer 5

What Is Earned Interest

Answer 6

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Find the appropriate Time Value of Money function in google or excel, and use it. {The other guy is wrong.} [And you need to be more specific.] Or do the math long-hand or on a spreadsheet. "yearly" depends on whether you leave it in the bank, or take the interest out to live on. That affects which formula you use, and what your answer is (before taxes, of course). {And which year you are talking about.}

Answer 7

you could earn $54,000

It wouldn't be wise to have $1 million in one account.

You would need separate accounts with a maximum of $100,000 in each account to be FDIC insured.

There are ways to do this. You will have to pay income tax unless it is in tax sheltered accounts.

Answer 8

It depends on how the interest is compounded, but at 3% compounded daily it would be something like $30,000 the first month. The second month would be based on $1,030,000, for $30,900 interest.
Yes, you pay income tax on the interest you earn. The amount of income tax you pay depends on how much total money you make in the year. The more you make the higher your tax bracket and the more income tax you pay.
Last question....I don't know.

Answer 9

Sounds interesting

Answer 10

Good topic, just what I was looking for.