How Much Interest Can You Make On £1 Million Pounds? – Answered

James Beattie By James Beattie 13 Min Read

Earning £1 Million Pounds is no easy feat but if you manage to do it, you may be wondering how much interest you could earn on it.

In this article, we will look at how much interest you could realistically earn by saving your money in a high-interest savings account. We’ll also take a look at some alternative options that could potentially give you a higher return on your money. Let’s dive in.

How Much Interest Could You Earn On £1 Million Per Year

The amount of interest you get from a savings account is based on the current BoE base rate. For about the last 10 years, interest rates have been very low, so they haven’t given much return. But, with the recent rise in the Bank of England Base Rate, interest rates are starting to go up.

If you have £1 Million to invest in a savings account, it’s crucial to find an account that allows such a significant deposit. Keep in mind that certain high-interest savings accounts may have deposit limits, so choosing the right one is essential.

Cynergy Bank is currently offering 6.04% on a 1 Year Fixed Rate Bond and have a maximum deposit of £1,000,000. There are many other options for good rates however most have limits of £85,000 to £250,000.

With most Fixed rate bonds you are unable to withdraw your money over the fixed rate term. Interest can be paid Monthly, Quarterly, or Yearly.

Rates can change regularly, so we have put together a table below showing you how much interest you could earn on £1 Million at different rates.

£1M Saved AtWeeklyMonthlyYearly
Interest Paid On £1 Million

At the current rate of 6.04% on the Cynergy Bank bond above you would earn £60,400 per year in interest. That’s a considerable amount! Let’s take a look at how that breaks down over the year.

How Much Interest On £1 Million Per Day

Having a 6% interest rate on £1 Million would earn you £164 per day in interest.

£60,000 per year / 365 Days Per Year = £164 Per Day

If your interest is paid monthly or quarterly and you left the money in the account your daily payout would grow due to compounding interest.

How Much Interest On £1 Million Per Week

Having a 6% rate on £1 Millon would earn you £1,151 per week in interest.

£60,000 per year / 52.1429 Weeks Per Year = £1,151 Per Week

If your interest is paid monthly or quarterly and you left the money in the account your daily payout would grow due to compounding interest.

How Much Interest On £1 Million Per Month

Having a 6% rate on £1 Million would earn you £5,000 per month in interest.

£60,000 per year / 12 Months per year = £5,000 Per Month

If your interest is paid monthly or quarterly and you left the money in the account your daily payout would grow due to compounding interest.

Is The Interest Taxed?

Unfortunately, you will have to pay tax on your interest, especially with the amount you will earn from £1 Million. Basic rate taxpayers can earn up to £1,000 in interest tax-free and higher rate payers get £500 tax-free. Additional ratepayers don’t get a personal allowance.

After your Personal Savings Allowance, the remaining is taxed at your current income tax rate.

One way to avoid paying tax on savings interest is to save your money in a Cash ISA. ISAs are tax-free however there is a contribution limit of £20,000 per year. That’s not going to make a dent if you are trying to save £1 Million Pounds.

Use our interest calculator to calculate interest on any amount.

Can I Live Off £1 Million Forever?

If you keep your money in a savings account forever it is unlikely you could live off £1 Million for the duration of your life. While interest rates are currently high, they won’t always be that way. Over the past 10 years, you likely wouldn’t have earned any more than 1% per year on your money.

Even if you attempt to live extremely frugally this isn’t enough to live without eating into the principal. While this is happening inflation is also on the rise eating away at your £1 Million.

If you were to invest your £1 Million in the S&P 500 which has an average return of 10.7% over the past 50 years you could potentially live off the £1 Million forever. Adjusted for inflation the returns are closer to 6.6%.

Using the safe withdrawal rule of 4% adjusted for inflation you should be able to withdraw 4% of your portfolio each year without ever eating into the principal amount.

This would give you around £40,000 per year initially and may continue to grow over time. While you won’t be able to live a lavish lifestyle on £40k per year, you should be able to live a fairly comfortable one in the UK. The Median UK salary is £33,280 per year so you are making more than the average.

However, if you have a family and partner to take care of, this £1 Million might not be enough. One person in the household will likely still have to work at least part-time to cover living costs.

Other Ways To Invest £1 Million To Earn Better Returns

If you have £1 Million, a savings account is not the only place for your money. Diversifying where you put your money is a wise decision to protect your wealth. With £1 Million you have many options for where to put your money. Let’s take a look at some of the most popular ways to invest your money in the UK.

Stock Market

The stock market is one of the most passive ways to invest your money. Personally, I invest most of my portfolio in Index Funds that have historically grown at over 10% for the past 50 years. This is a great way to get exposure to the whole market without having to pick your own individual stocks which can be much riskier.

Less than 10% of U.S. actively managed funds beat the market. If these people can’t beat the market, we probably can’t either. That’s why I opt to invest in the broad market through low-cost index funds.


Property is another proven way to invest your money and grow your wealth over time. You can use a portion of your cash to buy up rental properties and rent to tenants providing a consistent flow of cash. Historically properties have gone up in value over long periods of time, so you get both the appreciation on your building as well as the cash flow.

However, unlike stocks property will require some work. You will have to deal with maintenance and handling tenants.

Putting a portion of your £1 Million into property is a great option to provide capital growth as well as cash flow.

Buying Businesses

With £1 Million you have the option to buy or invest in your own business. Personally, I build online content sites just like this one. Investing in content on a blog can produce a much higher return than interest on a savings account but it also comes with much more risk.

Depending on your area of expertise, there may be a business that could invest in, run and grow your £1 Million faster than other options out there.

Is It Better To Save Or Invest Your Money?

There really is no right option here. It all comes down to personal circumstances.

Historically, over the long term (10+ Years) investing in a low-cost broad market index fund will outperform a savings account. If you don’t plan on needing the money any time soon investing may be a better option.

If you plan on needing your savings in the short term, for example, to purchase a house or pay for a wedding, keeping your money in a high-interest savings account is a better option.

Is My £1 Million Safe In A Bank?

The FSCS protects 100% of the first £85,000 you have saved per UK-regulated financial institution (Not account). This money is guaranteed to be protected. If you spread your money across multiple financial institutions you can have more protection.

Your bank must be registered with the Financial Conduct Authority to be covered. Ensure it is before depositing your money.

If you have £1 Million, it would be wise to talk to a financial professional so they can help you spread your money around and get you the best possible rates.

Why It’s Important To Earn Interest On £1 Million

If you are not earning interest on your savings then it is losing purchasing power due to inflation. At the time of writing this, inflation is at 7.3% in the UK. This eats away at your purchasing power year after year, meaning that your £1 Million won’t go as far as it used to.

It’s important to at least preserve your purchasing power by growing your money at the same or higher than the rate of inflation.

Final Thoughts

If you have managed to get your hands on £1 Million pounds you’re already in a great position. By putting your money in a high-interest savings account you can make a considerable amount of money each year just through interest payments. While savings rates are good at the minute, they won’t always be. Investing your £1 Million in a balanced portfolio of assets could be a better option.

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I'm passionate about personal finance and making money. Currently trying to FIRE solely by building online assets. Grew my stock portfolio to £86,000 by 26.
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