What $100,000 in Savings Earns You Right Now — and the Best Place to Put It After 50

Many traditional savings accounts offer you no more than a 0.01% annual percentage yield (APY) on your cash. If you've got $100,000 in a traditional savings account earning 0.01%, you're leaving thousands of dollars on the table every year.

For many people, it makes sense to move some savings into investments with more growth potential, like stocks. But people over age 50 who are in or nearing retirement may want to keep a significant chunk of change readily available. Leaving it in a traditional savings account, however, probably isn’t the best move. You can choose from several accounts that offer much higher yields.

How much you can earn

If you receive 4% APY on a $100,000 balance over five years, you will earn an extra $20,000 compared to keeping it in a traditional account that only has a 0.01% APY.

Moving the money can take just a few minutes, but it can help you save significantly.

4 places to keep your cash

A traditional savings account with 0.01% APY will only net $10 per year in interest for a $100,000 balance, but you can put the same money in other accounts and get much higher returns. Here are some options:

• High-yield savings account (HYSA): You can score APYs of around 4% on some of the best high-yield savings accounts. That means you can receive around $4,000 in interest per year on your $100,000 while storing your money in an FDIC-insured account with instant access to funds.
• Certificate of deposit (CDs): CDs also offer higher APYs than traditional savings accounts. Some of the best CDs are also offering APYs of around $4,000. While these accounts lock your money away until the term (typically three months to five years) is over, you also get to lock in the rate. That means even if the Federal Reserve cuts rates and the APY on new CDs fall, you’ll still get your initial APY for the entire term.
• T-bills: You can buy Treasury Bills or T-bills with APRs that are close to 4%. Treasury bills are exempt from taxation at the state and local levels. You still have to pay federal income taxes on this interest. T-bills terms range from four weeks to 52 weeks, so you don’t have to lock up your money for too long.
• Money market account (MMA): These accounts are similar to high-yield savings accounts, with some of the best money market accounts offering yields above 4% APY.

Where should you keep your cash?

All of these accounts offer higher yields than a traditional savings account, but the optimal one for your financial situation depends on your current needs and long-term objectives. For instance, if you expect to need some of the cash within the next six months, you don’t want to put it in a 9-month CD. A high-yield savings account likely makes more sense.

If you do not plan to spend money for an entire year, though, you want to open a 1-year CD and lock in the rate no matter how interest rates change over the next year. But depending on your tax situation, a T-Bill could also make sense.

If you want to write checks against your balance, you should opt for a MMA over a HYSA, since MMAs generally offer checkwriting while HYSAs typically don’t.