How Much Interest Does $1 Million Earn in a Savings Account?
At today's top savings rates, $1 million earns roughly $34,000 to $41,000 a year, but standard FDIC coverage is $250,000 per bank. Here is what $1 million earns and how to keep all of it insured.
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At today’s top no rules savings rates, $1 million earns roughly $34,000 to $41,000 a year. Always.bank pays 4.10% APY with no monthly rules, about $41,000; Peak Bank’s rate drops to 3.40% APY on balances of $500,000 and up, about $34,000. At the FDIC national average of 0.38% (as of Oct 19, 2026), $1 million earns about $3,800. Standard FDIC coverage is $250,000 per depositor, per bank, per ownership category, so plan how you hold it.
With $1 million in cash, the rate matters a lot: a 1% difference is $10,000 a year. But at this size, two other things matter just as much: balance tiers, which can lower your rate, and deposit insurance limits.
How much does $1 million earn in a year?
| Account | APY on $1 million | Interest in 1 year |
|---|---|---|
| Always.bank | 4.10% | $41,000 |
| Ivy Bank | 4.00% | $40,000 |
| Western Alliance | 3.80% | $38,000 |
| E*TRADE Premium Savings | 3.75% | $37,500 |
| Peak Bank Envision | 3.40% (balances of $500,000 and up) | $34,000 |
| American Express | 3.20% | $32,000 |
| FDIC national average | 0.38% | $3,800 |
Estimates: $1 million held 12 months at today’s APY with no deposits or withdrawals. Peak’s 3.40% tier as of Oct 1, 2026. Before you deposit a large balance, check each bank’s maximum deposit and how its tiers apply.
Rates are variable and can change at any time. Each rate shows the date the bank says it applies; we check every figure against the bank’s own website.
How much does $1 million earn per month?
Roughly the yearly figure divided by 12. At a 4.00% APY, $1 million earns about $3,274 a month. At 3.50%, it is about $2,871.
Why do some rates drop at higher balances?
Many banks use balance tiers. Peak Bank pays its top rate up to $499,999.99 and 3.40% APY on balances of $500,000 and up, and Axos pays 3.50% APY on balances of $250,000 and up, even when its rules are met. Read the tier table before you move a large balance, or split money so each account stays in its best tier.
Is $1 million FDIC insured at one bank?
Not in a single individual account. FDIC insurance covers $250,000 per depositor, per insured bank, for each ownership category. Ways to cover more:
- Spread it across banks. Four banks at $250,000 each keeps every dollar insured. Check that two brands are not the same bank, since accounts under one charter share a limit.
- Use different ownership categories. A joint account is insured separately from individual accounts, up to $250,000 per co owner. Trust accounts with named beneficiaries can cover up to $250,000 per beneficiary, up to $1,250,000 per owner at one bank.
- Use a sweep program. Some banks spread deposits across partner banks for you. Axos offers up to $2.5 million in extra FDIC coverage, and SoFi up to $3 million through its Insured Deposit Program. IntraFi’s ICS and CDARS do the same at many local banks.
See how to insure more than $250,000 and what happens if your bank fails.
Is a savings account the best place for $1 million?
For cash you may need soon, a high yield savings account is simple and safe within insurance limits. For money you will not need for a set time, a CD locks in a rate; see our best CD rates. Treasury bills are another option, and their interest is exempt from state and local income tax. For longer term goals, many people talk to a fee only financial planner. This guide is general information, not advice for your situation.
How is the interest taxed?
As ordinary income in the year it is paid. At $1 million, interest can also count toward the 3.8% net investment income tax if your income is above $200,000 single or $250,000 married filing jointly. See are high yield savings accounts taxed?
See smaller balances: $100,000, $50,000 and $25,000.
Compare every account we track, with live rates and dates, on our best high yield savings accounts page.
Try your own numbers in our high yield savings calculator.
Frequently asked questions
How much interest does $1 million earn in a year?
About $41,000 at 4.10% APY (Always.bank, at our latest check), vs. about $3,800 at the national average of 0.38%.
Can I live off the interest on $1 million?
At a 4.00% APY, $1 million earns about $40,000 a year before tax. Savings rates are variable, so that income can fall when rates drop.
Is $1 million FDIC insured in one savings account?
No. Standard coverage is $250,000 per depositor, per bank, per ownership category. Spread money across banks or ownership categories, or use a sweep program for more coverage.
Why does Peak Bank pay less on $1 million?
Peak uses balance tiers. Its top rate applies up to $499,999.99, and balances of $500,000 and up earn 3.40% APY (as of Oct 1, 2026).
How much does $1 million earn per month in savings?
About $3,274 a month at a 4.00% APY, or about $2,871 at 3.50%.
Compare today’s top savings rates
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