How Much Does $1,000 Earn in Savings, CDs, and Treasury Bonds at Today's Rates?

When interest rates rise, every saver asks the same question: where should I park my money to maximize returns without taking unnecessary risk? With the Federal Reserve maintaining elevated rates to manage inflation, a $1,000 investment can earn meaningfully different amounts depending on which safe-harbor product you choose.

This comparison breaks down exactly how much $1,000 earns in high-yield savings accounts, certificates of deposit, U.S. Treasury securities, and money market accounts, using current market rates as of June 2026. All calculations assume you hold the investment for one full year.

At-a-Glance Yield Comparison

Product	Typical APY	Annual Earnings on $1,000	Liquidity	Tax Treatment
High-Yield Savings Account	4.25-5.00%	$42.50-$50.00	Immediate	Taxable as ordinary income
12-Month CD	4.75-5.25%	$47.50-$52.50	Locked until maturity	Taxable as ordinary income
1-Year Treasury Bill	4.85-5.10%	$48.50-$51.00	Can sell anytime (market risk)	Federally taxable, state-exempt
Money Market Account	4.00-4.75%	$40.00-$47.50	6 withdrawals/month	Taxable as ordinary income

Rates shown reflect the market as of June 2026. Always verify current terms before committing funds.

High-Yield Savings Accounts (HYSA)

High-yield savings accounts at online banks currently offer APYs between 4.25% and 5.00%, significantly higher than the national average of around 0.40% at traditional brick-and-mortar banks.

On $1,000: You would earn approximately $42.50 to $50.00 in interest over one year, depending on the specific institution and whether the rate remains stable.

Key features:

• FDIC-insured up to $250,000 per depositor, per bank (FDIC, 2026)
• Immediate access to funds with no withdrawal penalties
• Variable rates that can change at any time
• No minimum term commitment

Best for: Emergency funds and money you may need to access quickly. The combination of competitive yield and complete liquidity makes HYSAs the default choice for short-term savings.

Certificates of Deposit (CDs)

CDs lock your money for a fixed term in exchange for a guaranteed rate, typically higher than savings accounts. As of June 2026, 12-month CDs at competitive banks offer 4.75% to 5.25% APY.

On $1,000: You would earn $47.50 to $52.50 over the 12-month term, assuming you hold to maturity.

Key features:

• FDIC-insured up to $250,000 per depositor, per bank
• Fixed rate guaranteed for the entire term
• Early withdrawal penalties (often 3-6 months of interest)
• Terms range from 1 month to 5 years

Best for: Money you are certain you will not need before the maturity date. The yield premium over savings accounts is modest but guaranteed, making CDs appropriate for short-term goals with a fixed timeline (a down payment fund, a known expense 12-18 months out).

The longer the term, the higher the rate in a normal yield curve environment. However, in June 2026, the yield curve remains partially inverted, meaning 1-year CDs sometimes yield more than 3-year or 5-year CDs. Review the entire rate ladder before committing to a longer term.

U.S. Treasury Securities

Treasury securities are backed by the full faith and credit of the U.S. government and carry zero credit risk. For a $1,000, one-year horizon, Treasury bills (T-bills) are the relevant instrument.

On $1,000: A 1-year T-bill yielding 4.85-5.10% would earn $48.50 to $51.00 over 12 months.

Key features:

• Backed by the U.S. government (considered the safest investment in the world)
• Purchased at a discount, mature at face value (the difference is your interest)
• Interest is exempt from state and local income taxes
• Can be sold on the secondary market before maturity, but price fluctuates with interest rates

Best for: Conservative savers who want absolute safety and benefit from the state tax exemption (residents of high-tax states like California, New York, New Jersey can save an additional 5-10% on the after-tax yield). T-bills also serve as a hedge against bank concentration risk if you already hold $250,000 at one FDIC-insured institution.

You can buy T-bills directly through TreasuryDirect.gov with no fees (U.S. Department of the Treasury, 2026), or through a brokerage account where they may be easier to sell before maturity.

Money Market Accounts

Money market accounts blend features of savings and checking accounts. Current rates range from 4.00% to 4.75% APY at competitive institutions.

On $1,000: You would earn $40.00 to $47.50 over one year.

Key features:

• FDIC-insured up to $250,000 per depositor, per bank
• Check-writing and debit card access at most institutions
• Federal Regulation D historically limited to 6 convenient withdrawals per month (though the rule was relaxed in 2020, many banks still enforce a similar limit)
• Variable rates

Best for: Savers who want slightly higher yield than a traditional checking account while maintaining transaction flexibility. Money market accounts occupy a middle ground, though many savers find that a high-yield savings account (offering similar or higher rates without transaction limits) is a simpler choice.

Tax Considerations

All interest earned on these products is taxable income in the year it is credited to your account. The tax treatment varies slightly:

Savings accounts, CDs, and money market accounts: Interest is reported on Form 1099-INT and taxed as ordinary income at your marginal federal tax rate, plus applicable state and local income taxes.

Treasury securities: Interest is federally taxable as ordinary income but exempt from state and local taxes. For a saver in the 24% federal bracket living in a state with a 6% income tax, a T-bill yielding 5.00% has an equivalent taxable yield of approximately 5.32% when you account for the state tax exemption.

After-tax comparison example (24% federal bracket, 6% state):

• HYSA at 5.00% APY to 3.50% after-tax (federal + state)
• CD at 5.15% APY to 3.60% after-tax (federal + state)
• T-bill at 5.00% to 3.80% after-tax (federal only, state-exempt)

The state tax advantage makes Treasuries particularly attractive for residents of high-tax states, even when the nominal yield is slightly lower than CDs.

Which Option Is Best for You?

The right choice depends on your liquidity needs, time horizon, and tax situation.

Choose a high-yield savings account if: You need immediate access to your money, are building an emergency fund, or cannot commit to a fixed term. The yield is competitive and you sacrifice nothing in flexibility.

Choose a CD if: You have a known timeline (12-18 months) and can commit the funds until maturity. The yield premium over savings is small but guaranteed, and you avoid the temptation to spend money that is earmarked for a specific goal.

Choose a Treasury bill if: You live in a high-tax state and benefit from the state tax exemption, want absolute safety beyond FDIC insurance, or already hold the maximum insured amount at your preferred banks. T-bills also make sense if you want the option to sell on the secondary market (though price risk applies).

Choose a money market account if: You want a small yield boost over a checking account while maintaining transaction access, though many savers find a HYSA + checking account combination cleaner.

Common Mistakes to Avoid

• Chasing the highest advertised rate without reading the fine print: Some banks offer teaser rates for new customers that drop after 3-6 months. Confirm whether the rate is promotional or ongoing.
• Ignoring FDIC coverage limits: If you hold more than $250,000, spread funds across multiple FDIC-insured institutions or consider Treasuries, which have no coverage cap.
• Overlooking state tax on interest: The state tax exemption on Treasuries can make a meaningful difference if you live in California, New York, or other high-tax states.
• Breaking a CD early for a marginal rate difference: Early withdrawal penalties typically erase any yield benefit you would gain by moving to a slightly higher-rate CD elsewhere.

Frequently Asked Questions

Are these yields guaranteed? CDs and Treasury bills lock in a rate for the full term. Savings account and money market rates are variable and can change at any time, though competitive institutions tend to adjust rates slowly.

Is my money safe in all of these options? Savings accounts, CDs, and money market accounts are FDIC-insured up to $250,000 per depositor, per bank. Treasury securities are backed by the U.S. government and carry no credit risk. All are considered safe harbor for principal preservation.

Can I lose money in a Treasury bill? If you hold to maturity, no. If you sell on the secondary market before maturity, the price fluctuates inversely with interest rates. If rates have risen since you bought, you may receive less than you paid.

How often is interest paid? Savings accounts and money market accounts typically credit interest monthly. CDs may pay monthly, quarterly, or at maturity depending on the institution. Treasury bills are sold at a discount and pay the full interest amount at maturity.

Should I ladder CDs or just use a savings account? CD laddering (buying multiple CDs with staggered maturity dates) reduces reinvestment risk and creates regular liquidity. If you have $5,000 to invest, you might buy five 1-year CDs of $1,000 each, spaced three months apart. One matures every quarter, giving you the option to spend, reinvest, or shift to another product. For amounts under $3,000, a high-yield savings account is usually simpler.

Conclusion

At current market rates, $1,000 earns $40 to $52 annually in safe, FDIC-insured or government-backed products. The difference between the lowest-yield option (a money market account at 4.00%) and the highest (a 12-month CD at 5.25%) is about $12 per year per $1,000 invested.

The best choice is not always the highest nominal yield. Match the product to your liquidity needs: savings accounts for emergency funds and short-term flexibility, CDs for known timelines, Treasuries for state tax benefits and government backing, money market accounts when you need transaction access. And always verify current rates before committing funds, as the fixed-income landscape shifts with Federal Reserve policy (Federal Reserve, 2026).

Financial disclaimer: This article provides general educational information only and does not constitute personalized investment, tax, or financial advice. Interest rates and product terms change frequently. Verify current offerings and consult a qualified financial advisor or CPA regarding your specific situation before making investment decisions.