How Much Interest Can I Earn On $200,000?

Investing involves a series of constant tradeoffs and careful planning, and there is no one-size-fits-all solution. Different investments will provide different potential payouts over time. So how much interest you can earn with $200,000 depends on the type of investment you choose. We’ll analyze the interest in some of the most popular options in this article. If you’re looking for help to find the right investment plan for your money, then you may benefit from speaking with a financial advisor.

How Much Interest $200,000 Can Earn by Investment Type

If you have $200,000 to invest, the amount of interest you can earn depends on your profile as an investor and the investments you choose. Many people often confuse the idea of returns and interest payments. Returns refer to money you can make from an investment through any method. Interest, on the other hand, only refers to payments you receive for a loan or other debt-related product. Interest can generate returns, but not all returns are interest payments.

Interest-bearing products offer the benefit of security. However, this security also tends to limit their value, providing a modest annual percentage yield (APY). Interest-bearing products tend to have low rates of return relative to other traditional investments like stocks or mutual funds.

If that seems like a good asset class for your portfolio, here are four common types of investments you can earn interest on and how much each typically pays out:

Invest in Bonds

Average Interest/APY: Approximately 4.625%–4.750%
Value of $200,000 in Five Years: Varies based on bond type and reinvestment strategy

Bonds are debt instruments issued by governments and corporations to raise capital. Investors lend money to the issuer in exchange for periodic interest payments and the return of principal at maturity. The maturity period can range from short-term (a few months) to long-term (up to 30 years).

As of April 2025, both 10- and 30-year U.S. Treasury yields are around 4.625%, reflecting current market conditions. The yield for 20-year Treasury bonds was slightly higher at 4.750%. Corporate bonds typically offer higher yields to compensate for increased risk. Municipal bonds may provide tax advantages, depending on the investor’s location and tax bracket.

While bonds can offer steady income, they are subject to risks such as interest rate fluctuations and credit defaults. It’s important to assess the creditworthiness of the issuer and understand the terms before investing.

Invest in Certificates of Deposit (CDs)

Average Interest Rate At Time Of Writing: 0.25% – 1.78%
Value of $200,000 in Five Years: $213,851

A certificate of deposit, or a “CD,” is a form of loan that you give to your bank. You agree to lock in your deposit for a fixed period, during which withdrawals are restricted. In exchange for letting the bank lock up your money like that, you receive a higher interest rate than you would for an ordinary savings account. The interest rate you receive depends on how long you give the bank your money.

As of March 2025, the shortest CDs have an average interest rate of 0.25% for 30 days. The longest standard product is a 60-month CD, which offers an average of 1.34%. Twelve-month CDs have the highest average APY at 1.78%. Different institutions will offer different rates though, and some investors can qualify for high-yield CDs if they invest enough.

However, these are just the averages provided by the Federal Deposit Insurance Corporation. Rates commonly exceed 4%, reaching up to 4.60% as of April 2025.

A certificate of deposit offers just about the most security you can get from an investment product. This is secured by your bank and the FDIC, so you will almost certainly get your money back, but this is also a low-yield option. Yields are low enough that you may lose purchasing power relative to inflation if you put your money in a standard CD.

Invest in High-Yield Savings Accounts

how much interest will i earn on $200 000

Interest Rates: 3.60% – 4.50%
Value of $200,000 in Five Years: $238,687 – $249,236

Traditionally, savers have two types of accounts available to them through their banks: checking and savings. A checking account offers the most liquidity, you can move money in and out of that as you please, while also paying very little interest. A savings account offers some liquidity, but you generally have rules around how often you can move money in and out of savings each month. In exchange for that reduced access, you get a better interest rate. It’s still not great though, with a 0.41% average savings account interest rate, according to the FDIC.

To compete with this, many online and alternative banks have begun to offer what’s known as a “high-yield savings account.” These are not standardized products, so we can’t guarantee what you’ll see in every case, but most of the time they are ordinary savings accounts. You have the usual setup of high liquidity, with some rules around how often you can move money each month.

High-yield savings accounts offer better interest rates to attract new depositors. In April 2025, these interest rates typically range from 3.60% to 4.50%. That means investing $200,000 in a high-yield savings account could pay between $38,687 and $49,236 over a five-year period (if rates stayed the same).

Invest in Annuities

Average Interest Rate: 4.9% – 6.0%
Value of $200,000 in Five Years: N/A

Annuities can provide steady interest income, depending on the product type—fixed, indexed, or variable. Fixed annuities, especially multi-year guaranteed annuities (MYGAs), are offering rates between 4.9% and 6.0% as of Q2 2025, according to Annuity.org and immediateannuities.com.

At a 5.5% fixed rate, $200,000 would generate approximately $11,000 per year in interest. You may defer income or receive it annually depending on how the annuity is structured.Immediate annuities pay out right away, blending interest and principal. Deferred annuities let interest accumulate on a tax-deferred basis.

Fixed indexed annuities, which credit interest based on market index performance (such as the S&P 500) without direct exposure, may average 3% to 6% annually. However, actual returns vary due to caps, spreads, and participation rates, and may fluctuate each year.

Bottom Line

Choosing how to invest $200,000 for interest depends on what matters most to you—whether that’s stability, liquidity or the potential for higher returns. Each option carries its own trade-offs, from the predictability of fixed products to the variability of market-tied accounts. Understanding how different investments generate interest can help you shape a portfolio that fits your timeline, comfort level with risk, and long-term goals.

Tips for Investing

Getting the right balance in your portfolio for your specific goals is important, but it can be a lot to figure out on your own. You may want to consider speaking with a financial advisor who can help you sort it out. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Bonds can offer a good balance of security and return, especially if you invest for the long run. Learn all about how to invest in bonds and how it could potentially change your portfolio.
Determining the right balance, or asset allocation, in your portfolio can be difficult to figure out. You can use our asset allocation calculator to help you determine an industry-proven balance.