What to consider when investing 5 million dollars
The best way to invest 5 million dollars will depend on your life and goals. Even if you’re not new to investing, take some time to consider risk tolerance, liquidity needs, time horizon, diversification, tax and estate planning, and your personal involvement. Some questions you may want to ask include:
Time horizon: Your investment strategy may differ if you need the money sooner rather than later.
Risk tolerance: Are you willing to risk losing money to grow it? Your split between high-return investments and safe investments may differ based on your risk tolerance.
Liquidity needs: Do you need access to the money quickly? You may not want to lock up your money in investments that mature over several years if you need access to it in the near future.
Diversification: Have you diversified your investments with a well-balanced portfolio yet? Look at different asset classes, account types, and strategies to diversify your 5 million dollar portfolio.
Tax and estate planning: How are you going to preserve the 5 million sum? Do you have a plan for making it last through retirement or leaving some of it to your heirs? What plan do you have for making your investments tax-efficient?
Personal involvement: How hands-on do you want to be with investing 5 million dollars? Would you prefer to hand off day-to-day investing decisions to a trusted advisor?
How to invest 5 million dollars
A good financial advisor can help you devise a plan for your money. You may want to consider what type of investment to buy, where to purchase it, and which type of account would be most advantageous for holding that investment.
Types of investments
Stocks: You can invest in individual companies by buying a small piece of them in the form of a share. You benefit when the stock goes up and lose when it goes down.
ETF: An ETF is a group of investments organized around a central category or investing approach. ETFs offer diversification and are easy and inexpensive to trade.
Mutual fund: A mutual fund is a group of investments compiled by an SEC-registered investment company. Investors can pool their money to gain access to a diverse portfolio of investments.
Bonds: Bonds are government or corporation-issued loans issued to raise money for a specific purpose. They are relatively low risk and offer stable interest payments to investors.
Real estate: Traditional real estate investing involves the purchase of property in order to receive rent and benefit from the appreciation of the property. It’s appropriate for hands-on investors who are willing to manage the property and take on some risk.
Private equity: Private equity is an alternative investment class where money is pooled from investors for privately owned companies. They’re typically long-term investments with higher investment amounts, higher risk, higher returns, and no SEC oversight.
Hedge funds: Hedge funds are private, unregistered investment funds open only to certain investors. They may have a more flexible approach with complex trading and risk management techniques.
Venture capital: As a venture capitalist, you invest directly in a startup company for a stake in ownership. It’s a much higher risk with no regular repayment period, but with potentially higher rewards.
Private credit: Investors act as banks in lending money out to other borrowers. Returns may be higher than other types of investments.
Retirement and investment account providers
There’s no shortage of retirement and investment account providers. You may have heard of traditional, full-service brokerages such as Fidelity, Vanguard, or Charles Schwab. But fintechs such as Betterment, Wealthfront, and SoFi also offer a full range of investment options. Newer investors may be more familiar with apps such as Acorns, Stash, and Robinhood, which provide simple ways to invest.
Types of accounts
When you’re investing, there are three types of accounts where you can put your money.
The difference between these accounts is how you pay taxes on your investments.
Traditional retirement accounts, such as a 401(k) or IRA. You pay taxes in retirement, and there’s a penalty if you withdraw money early.
Roth accounts, such as a Roth IRA, Roth 401(k). You’ll pay taxes on money before investing it. It grows and is withdrawn tax-free, though there are limits.
Brokerage accounts. An investment account where gains are treated as taxable income in the current year.
How much interest would 5 million dollars earn?
5 million dollars has the potential to earn a significant amount of interest.
Though market conditions and interest rates change frequently, here’s an example of possible interest earnings you might see from different investments.
| Investment | APY | Interest earned for the year on $5,000,000 |
|---|---|---|
| Savings accounts | 0.40% | $20,000 |
| Checking account | 0.07% | $3,500 |
| High-yield savings account | 3.90% | $195,000 |
| 6-month CD | 1.60% | $80,000 |
| 24-month CD | 1.34% | $67,000 |
| Bonds | 4.10% | $205,000 |
| Dividend Stocks | 2.45% | $122,500 |
| REITs | 3.88% | $194,000 |
| I-Bond | 3.98% | $199,000 |
| Private equity* | 12-15% | $600,000 - $750,000 |
| Venture capital* | 13% | $650,000 |
| Hedge funds* | 9% | $450,000 |
| Private credit* | 6.5% | $325,000 |
*This is not investment advice for you and is provided as educational content only. Numbers estimating returns were taken from credible sources in November 2025, but expected returns may range even more widely depending on unique factors of the fund and investment. Returns can also be $0 on high-risk investment strategies.
How to invest 5 million dollars for income
You have an advantage when it comes to investing 5 million dollars for income. With assets that may be substantial enough to generate income, you could put your money in a number of different investments.
Some of the investments that produce income include:
Real Estate
Investing 5 million dollars in real estate could give you quite a portfolio. You may be able to generate sufficient income through 5 million dollars worth of rentals.
REIT
Investing 5 million dollars in an REIT (real estate investment trust) could give you a large stake in a company that owns and manages real estate without your direct involvement. You earn income in the form of dividends paid out to investors.
Annuity
An annuity can provide income through an insurance product. It offers stability, but locks up your money with a lot of terms and conditions that come with the contract.
An annuity can make sense, but there are likely better investments and strategies your financial advisor can steer you toward.
CD
A certificate of deposit (CD) earns interest when you deposit money with a financial institution for a specified period of time. It’s a very safe investment option.
Bonds
A bond is a relatively low-risk investment that pays interest to investors. Bonds have lower returns, but are considered safer investments.
Dividend stocks
Dividend stocks return a portion of the company’s earnings to the investor in the form of a dividend, which can be a source of income.
HYSA
You can earn interest on money deposited in a high-yield savings account (HYSA). These accounts are ubiquitous. You’ll find higher yields in a number of places, including traditional lenders, online banks, credit unions, and other non-traditional banks.
Money market account
Money market accounts are a deposit account earning higher than higher-than-average interest. It’s like a combination of a savings and checking account that allows you to make transactions while earning better interest.
Balancing income and growth with 5 million dollars
At 5 million dollars, there are trade-offs between investing for income vs. growth, and what you’re really looking for is a comprehensive plan.
“Working with an advisor and you’ve got 5 million dollars on the table, the goal isn’t just to ‘make it grow.’ It’s about making sure that money moves with purpose,” says financial planner and founder of the Brands and Bands Strategy Group, Nadia Vanderhall.
“At this level, it’s less about picking individual investments and more about building the right ecosystem. Your advisor’s job is to understand you—your lifestyle, your risk tolerance, what you want your money to do now, and what you want it to mean later.”
“The connector is your goals from now to later or greater. From there, they’ll help you balance different parts of your portfolio—those ‘pockets’ of growth, income, and preservation—so they work together rather than against each other,” she says.
Investors may also want to be mindful of safe withdrawal rates. A safe withdrawal rate is the amount you can spend from your portfolio so that it can sustain you for the rest of your life.
Conservative withdrawal rates between 3.5% and 4% over 30 years are likely to help preserve your retirement income, but are dependent on an appropriate strategy and allocation of investments.
For 5 million dollars, that’s between $175,000 and $200,000 per year.
However, without a plan, it’s not assured that your money will last, even with a safe withdrawal rate. Thus, it is crucial that you see an advisor to evaluate your situation.
Other 5 million dollar investment considerations
At the 5 million dollars level, there’s a lot more to consider beyond your investing strategy. Considerations include:
These additional considerations have to work in harmony with one another.
“When you hit that 5 million dollars mark, it’s not just about investing anymore—it’s about managing your full financial ecosystem,” says Vanderhall. “You’re the center of that ecosystem, and you have to be keen on how it orbits.”
“Your team will help hold everything up and see what’s coming up on the radar. Every decision touches something else—your portfolio, cash flow, taxes, even family dynamics. This is the level where your strategy really has to mature; the discipline impacts the dollars.”
Work with Unbiased
Assembling a 5 million dollar portfolio requires expertise.
That’s where an advisor can help.
Whether you need help with investment strategy, tax efficiency, estate planning, and more, an advisor with the right expertise can help point you in the right direction.
Unbiased can connect you to a financial advisor who puts your interests first. Connect with an advisor today.