Personal Finance

Millennials With $1 Million Saved Are Missing The 'Second Income' Banks Will Pay Them Today

Marc Guberti

Published: March 6, 2025 9:56 am

It’s a big achievement to save up $1 million. Not only does it give you plenty of financial options, but you can also grow that $1 million into more fortunes. Many banks are willing to give you risk-free money if you deposit your cash into a high-yield savings account. While a low interest rate won’t earn you much, some banks let you earn a 4% yield on your idle cash.

Millennials with vast fortunes who don’t want to put all of their money into the stock market can benefit from this second income source. Knowing how much you can earn with a high-yield savings account can make your financial goals feelmore attainable. 

How Much Can You Earn with a High-Yield Savings Account?

The amount you can earn depends on your yield and account balance. Higher account balances earn more interest, but a higher yield ensures that your money is working harder. 

Here’s how APYs play a big role in how your $1 million grows over time:

A 4.00% APY gives you an extra $100,000 compared to a 2.00% APY. That’s the difference of doing extra research and finding a high-yield savings account with a better yield. You typically find the most competitive savings accounts if you narrow your search to online banks. 

Opportunity Cost

Although high-yield savings accounts can act as a second income, you might be leaving money on the table if you put your money in the bank instead of buying stocks and crypto. These assets can perform much better than high-yield savings accounts during bullish markets.

It’s also worth noting that there are more ways to minimize your taxes with stocks and crypto. However, interest from a high-yield savings account is treated as ordinary income.

While it seems like stocks and crypto have the edge, these same assets can experience sharp losses during bear markets.Not every investor wants to hold onto these assets when they drop, and some people fall into the trap of buying high and selling low.

High-Yield Savings Accounts vs. Bonds

Both assets have their interest treated as ordinary income. While municipal bonds can reduce your tax bill, these bonds typically have much lower yields than similar options. 

You can find high-yield savings accounts that have similar rates as Treasury bonds. However, you will find higher APYs if you buy corporate bonds from highly rated companies. You can earn higher yields by purchasing corporate bonds from companies with less-than-perfect ratings that are still highly likely to pay their bondholders.

The main strength of high-yield savings accounts is that you can access your cash right away. However, you would have to sell your bond to tap into your cash. Selling a bond early no longer locks you into the rate, and you might have to sell your bond at a loss if its price drops. Savings accounts produce risk-free returns and don’t deal with any market price fluctuations. 

A savings account can be a valuable resource as you plan your long-term finances and shift to assets that produce risk-free returns. If you already have money in the bank, it’s worth looking for an account that has a higher APY than your current savings account.