The problem is that the value b is not being saved within the loop, so your plot function is trying to plot a single value which does not really work. I would change it as such:
b=5000;
i=0.03;
ii=0.05;
y=0;
years=20;
bal = zeros(1,years); % pre allocate b (it's good practice not entirely needed)
bal(y+1) = b; % save the first value of b
while y<years
y=y+1;
if b>=8000;
b=b*(1+ii);
else
b=b*(1+i);
end
bal(y+1) = b; % save the value of b created
end
y = 0:years; % y also needs to be a vector and not a single value
plot(y,bal,'b-')
xlabel('Years')
grid on
