How Much Will $10,000 in Savings Be Worth in 10 Years?

Having $10,000 in savings is an impressive achievement. But knowing the best way to grow that money can be a little confusing.

If you don't spend a dime of that sum, how much could it be worth a decade from now? It all depends on where you put it.

Here are four hypothetical outcomes for your $10,000 and why you should act fast to maximize your gains.

$10,460 in a low-interest savings account

Traditional banks generally offer low-interest savings accounts. For example, the average interest for a savings account with a traditional bank is 0.45%.

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Brick-and-mortar banks have high overhead costs to keep branches running, so they don't offer great rates.

Most savings accounts let you earn compound interest (you earn interest on your initial deposit plus the interest you earn) and calculate it daily, so we'll do the same. In this scenario, $10,000 in a savings account earning 0.45% (compounded daily) would become $10,460.28 in 10 years.

$16,486 in a high-yield savings account

If you want your savings account to work hard for you, then consider moving your money into an online bank. Most pay interest rates far above traditional banks, and many currently offer 5.00% annual percentage yields (APYs) or higher.

These high-yield savings accounts will work wonders for your money. If you could hold onto that 5.00% rate (more on that in a moment) for 10 years and earn daily compounded interest, your $10,000 would become $16,486 in 10 years.

Now for the bad news. It's unlikely you'll earn 5.00% APY in a savings account for 10 years. Savings account rates fluctuate depending on the federal funds rate and will likely start coming down once the Federal Reserve cuts interest rates (which is expected to happen as soon as later this year).

$14,802 in a high-yield CD

If you're looking for a nearly guaranteed rate of return for your $10,000, a certificate of deposit (CD) is a great option.

CD rates change based on the federal funds rate, but your APY is guaranteed for the entirety of your CD term as long as you leave your money in the account. For example, some 10-year CDs pay up to 4.00% right now. If you opened a 10-year CD tomorrow and put $10,000 into it, you'd be guaranteed to earn the 4.00% rate.

If you don't take any money out of it over the next decade, you'll grow your balance to $14,802.44. Just be aware that most CDs charge penalties for early withdrawals. The cost is usually 90 to 180 days of simple interest, depending on the length of your CD.

$27,612 in the stock market

Now, that's what I call a return on investment! The $27,612.66 figure is based on $10,000 invested with the S&P 500's historical average annual return of 10.2%, but real-world results will vary.

However, it's important to compare this amount to savings accounts and CDs here because if you want to grow your money over the next decade, the stock market is by far the best place to do it.

There is no comparison between the stock market's vast earning potential and the lower returns of savings accounts and CDs.

Yes, it's riskier to invest in the stock market than in a savings account or CD. But if you have a long investment horizon and aren't nearing retirement anytime soon, investing in a low-cost index fund that tracks the market is a wise way to grow your money over time.

Do this no matter where you put your money

If you have a large sum of money to put into a savings account or the stock market, it's probably a good idea to make the move as soon as possible.

The Federal Reserve estimates it will make one interest rate cut this year and multiple cuts next year. When that happens, savings account APYs will be affected, and CD rates will also slide. This means opening either of these accounts right now will help you maximize your earning potential.

As for investing in the stock market, the longer your money is invested, the more potential it has to grow. So, putting your money into a brokerage account now and giving it as much time as possible to increase -- through the magic of compounding interest -- is a wise long-term move.