Can you get rich with interest on $4 million?

how much interest do they earn on $4 million per year

Leaving $4 million for retirement is quite an accomplishment. However, you’re probably wondering how much interest $4 million a year earns. Predicting how much interest your nest egg is earning will help you decide if it’s enough to support your lifestyle. But the interest earned will vary depending on the type of investments you choose. Here are some common investments to give you an idea of ​​how much interest you can earn on $4 million. For more specific questions related to your own financial goals, consider speaking with a financial advisor.

Annual interest of $4 million, per type of investment

Where you choose to keep and invest your money will determine the amount of interest you earn. For example, if you choose a high yield savings account that earns a modest interest rate, you can expect to earn a modest return compared to higher-risk investments such as stocks. However, choosing one lower risk investments it may not yield a significant return, but you may not have to worry about losing so much of your investment when the market underperforms.

Here’s a general indicator that shows you can make $4 million on any type of popular investment:

High Yield Savings Account

Typically, high-yield savings accounts earn around 0.80%, which is a drastic increase from a traditional savings account that averages 0.06%. So if you choose a high-yield savings account, you could earn about $32,000 a year. If you choose a traditional savings account, you could earn $10,000 a year. It is even possible to earn 1.25% at some banks. You can usually open this type of account online or in person, depending on the financial institution you choose to use.

Certificate Deposits

Another option that usually offers a higher interest rate than a savings account is a certificate of deposit. However, unlike a savings account, you usually have to keep your money in the account for a certain period of time, which you can choose when you open the account. Terms typically range from 30 days to a few years.

The national average interest rate for CDs is 0.26%. However, some offer interest rates as high as 2.25% if you invest the money for a longer period of time. So if you choose to invest in a CD for five or more years, you can expect to earn around $90,000 or more per year.


In the investment world, investors view bonds as a low-risk investment. This means that when there is a lot of market turbulence, bonds seem to hold steady as long as you work with a reputable issuer. If you don’t work with a reputable issuer, bonds may carry more risk.

Interest rates on bonds typically range between 2% and 5% per year. So with $4 million you could earn anywhere from $80,000 to $200,000 a year.

Real estate

When it comes to investing in real estate, you have many options, such as investing in rental properties or real estate investment trusts (REITs). Therefore, the interest you receive can vary drastically depending on the investment you choose. AEEAPs, for example, generate interest between 3% and 10% per annum. So you could earn between $120,000 and $400,000.


Investors are offered a new income stream with dividend stocks. Along with the new income, the underlying stock value can also increase. You can expect to earn 2% to 5% in dividends each year. So if you have a $4 million portfolio, you’ll earn between $80,000 and $200,000 every year.

Factors that can affect retirement income

how much interest do they earn on $4 million per year

how much interest do they earn on $4 million per year

There are many factors that affect your retirement income. The amount of money you have allocated to invest is only one. Another big factor that can negatively affect your total income is the amount in fees you will have to pay. Some other important factors to remember are:

  • Investment mix: Your investment mix or portfolio diversification will drastically affect the rate of return you receive each year. As mentioned above, you can see that all investments have a different level of risk. So if you invest all your pennies in just one high-risk asset, you risk losing it all if there is a market downturn. On the other hand, if you put money into several different asset classes, you can reduce your losses, since not all investments react the same to market conditions.

  • Inflation: Unfortunately, inflation affects your purchasing power. So as inflation increases, your nest egg will become less valuable.

  • Taxes: Uncle Sam also wants a piece of your nest egg. While paying some taxes is inevitable, you can reduce your tax burden by working with a tax professional and financial advisor. Both professionals can help you reduce your taxes so you can keep more of your savings for yourself.

Sustainable Withdrawal Rate

Once you reach retirement, you should determine a sustainable withdrawal rate. Your withdrawal rate is the portion of your savings that you make each year to sustain your lifestyle during your golden years without drastically reducing your investments. Professionals usually recommend a withdrawal rate of between 4% and 5%. So if you have a $4 million portfolio, withdrawing 4% per year, that would give you about $160,000 per year to live on. Of course, this number does not take into account taxes or inflation factors.

When determining a sustainable withdrawal rate, it is also wise to consider other factors such as:

  • Timescale

  • Purchase conditions

  • Investment mix

  • Taxes

  • Management fees

Keep in mind that you may need to adjust your withdrawal rate as you navigate retirement. What worked in the past may not work in the future. You need to make adjustments accordingly. A financial advisor can help you assess your needs and determine an appropriate withdrawal rate that won’t deplete your retirement savings.

The Takeaway

how much interest do they earn on $4 million per year

how much interest do they earn on $4 million per year

The amount of interest you earn on the $4 million will depend on the type of investments in your portfolio. Whether you’re investing in real estate, CDs, bonds, or other avenues, it’s vital to weigh the pros and cons of each investment option. While the amount of interest investments earn is an important consideration, there are other aspects of your investment decision to consider, such as risk exposure.

Tips for planning for retirement

  • The best way to determine how much you can earn in retirement is probably to talk to an expert who can help you navigate your personal financial situation with you. Finding a qualified financial advisor doesn’t have to be difficult. SmartAsset’s free tool matches you with up to three financial advisors serving your area, and you can interview your advisors at no cost to decide who is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

  • It is important to assess your risk tolerance because not all investments are created with the same risk. Weigh your risk tolerance with SmartAsset’s free asset allocation calculator.

  • Seeing your savings grow is important because the money you save will earn interest. When compounded over time, these interest savings can add up quickly. See how much your savings will grow with SmartAsset’s free savings calculator.

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