How much interest on £10 million pounds can you earn?
Discover how much interest you can earn on a £10 million investment. We reveal useful projections and insights so you can find out how much interest you can earn.
Find out how much interest you can expect to earn on £10 million if you want to build long-term wealth from this substantial sum.
If you have £10 million, you can earn over £400,000 in interest per year.
You will pay tax on savings interest.
Living off the interest on £10 million is possible, even with high living standards.
Traditional and challenger banks offer varying interest rates.
How much interest can I earn on 10 million pounds?
With £10 million in a high-interest savings account, you can earn over £400,000 a year in the UK.
However, how much interest you earn on 10 million pounds per month depends on the interest rate, which varies from bank to bank, making the choice of where you deposit your money an important one.
When choosing a bank, consider the interest rates available and the amount of money in question.
| £10 million invested at: | Weekly | Monthly | Yearly |
|---|---|---|---|
| 1% | £1,917.81 | £8,333.33 | £100,000 |
| 2% | £3,835.61 | £16,666.67 | £200,000 |
| 3% | £5,753.42 | £25,000 | £300,000 |
| 4% | £7,671.23 | £33,333.33 | £400,000 |
| 5% | £9,589.03 | £41,666.67 | £500,000 |
To get close to £500,000 in interest from a £10 million savings balance, you would need to find accounts paying as close to 5% as you can find.
However, with many accounts capping the amount you can save, you may need to spread your money across a number of accounts and switch regularly to ensure you are always earning the best rate possible.
Chase, for example, pays 4.75% (including a 2.25% one-year bonus) but only on balances up to £3 million. Kent Reliance Building Society, meanwhile, pays 4.33% but only on balances up to £499,999.
Although it might seem like a hassle spreading your money across multiple accounts, it’s actually a wise move. That’s because the Financial Services Compensation Scheme (FSCS) only protects up to £85,000 of your money in an individual account and up to £170,000 for joint accounts.
They may protect up to £1 million for six months after the initial deposit, but this is only a temporary option.
Do you pay tax on savings interest?
Yes. If you deposit £10 million into a savings account to grow over time, you will have to pay tax on the interest, especially for a sum as big as this one.
In the UK, basic and higher rate taxpayers get a personal savings allowance of £1,000 or £500, respectively, before they pay tax on interest, but this won’t provide much help on a £10 million balance.
You can also use cash individual savings accounts (ISAs) to shelter your savings from tax, but the maximum amount you can pay in is £20,000 a year.
What is the best way to invest 10 million pounds to earn better returns?
There is more than one way to invest £10 million for decent returns - you don’t have to limit yourself to cash savings.
If you want higher returns, you may want to consider investing in one or more of the following:
A business
Investing in a business can be very lucrative if you have experience in the industry you’re investing in.
However, depending on the business, it could be a risky strategy, so it’s best to diversify your investments across several businesses.
You’ll also limit your liquidity, and your investment may take several years to pay off.
Property
Due to consistently high demand, property is one of the most popular forms of investment for people dealing with all levels of wealth.
You can make quick returns if you purchase, flip, and sell a property.
You can also enjoy long-term returns if you rent out a commercial or residential property and keep it in your portfolio.
The stock market
You could also consider investing in the stock market - either buying a portfolio of individual shares or in funds that are managed on your behalf.
The risk of stock market investing depends on the nature of the investments you choose, but you can reduce risk by taking a long-term view and ensuring you have a diversified portfolio.
If you lack experience with investing or managing large sums of money, it is crucial that you seek professional advice.
In addition to deciding where to invest your money, you’ll also likely need support in managing your wealth as tax-efficiently as possible.
In these situations, choosing the right financial adviser is one of the best decisions you can make.
Is it best to invest or save £10 million?
When it comes to whether it’s better to invest or save money, this is a personal decision and one that will come with negatives and positives, no matter what you choose.
Below, we reveal the pros and cons of saving your money.
| Pros | Cons |
|---|---|
| You can earn a consistent amount of interest. | Interest rates can vary. |
| There’s a low to no risk of losing your money. | Your interest is taxable (and tax on savings interest on millions can be high). |
| You usually have easy access to your funds. | Your bank may charge fees to hold your money. |
The pros and cons of investing are below.
| Pros | Cons |
|---|---|
| You may benefit from long-term gains. | There’s a risk that you lose money. |
| There’s more potential for higher returns. | Your big gains are taxed. |
| It’s usually easy to buy and sell investments, | It can take a lot of time to conduct research. |
Can you live off the interest from 10 million pounds?
£10 million is a large sum of money, but so is £400,000, which is the interest you can earn at a rate of 4%. So, you can live off the interest on £10 million quite comfortably.
However, as significant as the sum is, no amount of money is too big to lose, so if you do reach this financial goal, it is crucial to exercise caution.
Reckless spending is one of the most common reasons behind the loss of vast sums of money, and building it back can be a lifetime process.
Get matched with a financial adviser
If you are fortunate enough to have £10 million in the bank, knowing what to do with your money is crucial.
Whether you decide to invest it or deposit it in a high-interest savings account, make sure that your choices are well thought-out and researched.
For professional guidance on money management and wealth growth, get matched with a financial adviser via Unbiased.
Not only can they advise you on how best to invest your money, but they can also help you with tax and inheritance planning, which are crucial to plan ahead for.
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