How Much Interest Do 1 Million Dollars Earn Per Year?

First of all if you have 1 million dollars, congratulations. Since you want to know how much interest do 1 million dollars earn per year, I am guessing you want to find out what will be your passive income. May be you want to retire, or just want quit the daily grind and settle down for a life of containment. But, to be blunt it will always depend on the yield you earn on the amount.

So, How Much Interest Do 1 Million Dollars Earn Per Year? IF you choose to go for the most secured option which is the US government treasury, then a 30 years US government bond yields 1.3%, which is less than the official inflation number. So, your purchasing power will go down every year. With this rate, you will get only $13,000.

Next option if you are not happy with money market fund or government Treasury yields, you can try band CD or Savings accounts. Given the COVID 2019 crisis, the FED had brought down the rate near 0, you will barely get anything. And even you earn 1%, that will be only $10,000 on your 1 million deposit. And remember, these are pre-tax dollars. You will have to pay tax on whatever dividend you get. As long as it is more than $10, you will have to report to IRS and pay tax on that. At this moment in April 2020, SPY or the SnP index fund is offering you more than a 2% dividend yield.

How Much Interest Do 1 Million Dollars Earn Per Year
AmountInterest Rate/ Dividend YieldIncome from PrincipleEffective Tax RateEffecting Earning Post Tax
$1,000,0001%$10,00030%$7,000
$1,000,0002%$20,00030%$14,000
$1,000,0003%$30,00030%$21,000
$1,000,0004%$40,00030%$28,000
$1,000,0005%$50,00030%$35,000
$1,000,0006%$60,00030%$42,000
$1,000,0007%$70,00030%$49,000

As you can see from the table, all that matters is the interest you are getting or the yield you earn on your principal, which is one million here. I am giving you the excel sheet down below, you can download, change the numbers as it fits you and uses it to calculate how much you will earn on 1 million dollars.