How much interest will I earn on 1 million pounds

how much interest will i earn on 1 million pounds

Perhaps you’re working hard and are well on your way to becoming a millionaire. Maybe you’re looking ahead and planning for the future. Regardless, you’re probably curious about how much interest you can earn on one million pounds. Of course, the short answer is that it depends.

There are several factors to consider. This begins with the interest rate and term of your investment. For instance, you’ll earn £983 per week or £51,162 per year on a 5% interest rate. Granted, that may be an optimistic number nowadays.

How much interest will I earn on 1 million pounds

It was certainly possible to earn between 3% and 5% interest on £1 million in the past, translating to a comfortable payout of approximately £30,000 to £50,000 per year. You could easily live on that money alone. After all, the average UK salary as of 2019 is around £30,420 per year, according to the Office for National Statistics.

But after the 2008 financial crisis and, more recently, the coronavirus pandemic, interest rates in the 1% range have unfortunately become all too common. Let’s not forget about inflation. Your million pounds would buy far more twenty years ago than it would today.

Also important is how long you plan to save before withdrawing any money, as well as whether your earnings are paid out daily, monthly, or annually. So, this clearly requires a fair bit of deliberation.

In order to understand how you can maximise the interest you earn, we can start by looking at your investment in various contexts. Then, we’ll compare the best savings products that are currently available, before discussing some guidelines on making the most of your million.

1 Million Pounds Interest on the Stock Market

Let’s put traditional methods and their associated interest rates aside for a moment and briefly explore the premise of investing in assets. You likely know that in this case, an asset is something you can gain ownership of in order to generate revenue. One example is property. Another is the stock market.

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Putting your money in (the right) stocks (at the right time) can be an excellent way to grow wealth. In the long run, they can be an ideal investment due to their unique ability to transcend market volatility. A downturn on the stock market is also an opportunity to buy shares at lower prices.

For instance, consider the historical returns of the FTSE 100. Even with massive crashes like Black Monday, the Dot Com Bubble and the afore-mentioned recession, the interest rate in question has stood at 5% to 8% since 1984. That technically means you could earn approximately up to £80,000 per year on your million – excluding taxes.

If you’re intrigued by the idea of investing in stocks, keep the following points in mind:

  • A brokerage firm or robo-advisor can provide assistance through investment management services
  • Stocks are suitable for beginners and long-term investors
  • You can experiment with very small amounts of money before committing
  • You might only need to revisit your portfolio several times per year after setting it up

The general consensus is that exchange-traded funds (ETFs) are the easiest way to invest in the stock market, particularly in the UK economy. An ETF is essentially a single security with diversified exposure that you can trade just like any other stock. At the moment, the most popular ETF is the EWU or MSCI United Kingdom Index Fund. Others include the:

  • BLDRS Europe 100 ADR Index Fund (ADRU)
  • BLDRS Developed Markets 100 ADR Index (ADRD)

How Much Interest Will I Earn on 1 Million Pounds at the BOE Base Rate?

The reality is that assets such as stocks are likely to render the highest returns. What lies on the opposite end of the spectrum? It’s probably the Bank of England (BOE) 0.1% base rate.

While it’s the rate at which the bank lends money, it won’t necessarily be the rate that applies to your £1 million if you put it into a savings account. Needless to say, if you happen to be unlucky enough to earn just 0.1% on your cash, the subsequent interest would be quite paltry and potentially even lower than the applicable fees.

For some perspective, your earnings would be as follows:

  • £2.74 per day
  • £19.23 per week
  • £1,000 per month
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In addition to service fees, you might also have to deal with taxes. It’s not the prettiest picture, but it doesn’t have to be the one your money fits into, either.

How Much Interest on 1 Million Pounds at 2.5%?

Before the 2008 recession, an interest rate of 2.5% would be seen as modest growth when attached to a savings account. These days, however, anything close to 2% tends to be quite generous.

Despite being a fairly minor shift from the base rate, this amount of interest already has you approaching the average national salary. Coupled with another source of income, you might be able to live off your investment in relative comfort. Here are the earnings you can expect with a 2.5% interest rate:

  • £69 per day
  • £486 per week
  • £25,288 per year

How Much Interest on 1 Million at 15%?

Just for fun, let’s go back in time to the early 1980s when interest rates were mouth-wateringly high. This was when Margret Thatcher had just become prime minister and inflation rates were soaring. With your £1 million, the day rate alone would be almost half of the annual rate today! With the then-average 15% interest rate, you’d net:

  • £440 per day
  • £3,081 per week
  • £160,755 per year

How Much Interest Would I Earn on 1 Million Euro?

You may be wondering what the euro value of these earnings would be. At the time of writing, the equivalent value of one pound sterling is 1 euro and 10 cents or 1.10237788 euros to be exact. So, with £1 million, you would have 1,102,377.88 euros. Therefore, your earnings on 2.5% interest would be (approximately):

  • €76 per day
  • €535 per week
  • €177,212 per year

Whether your money is best invested in the form of pounds or euros depends on your individual circumstances. To avoid risk, it’s wise to save in the currency that characterises your definite liabilities. This makes it easier to cover them.

How Much Interest off 1 Million Pounds in Savings Accounts?

There is a myriad of different savings products available in the UK today. Some are more complex than others. What remains true across the board is that a maximum of £85,000 is protected for each institution. That’s why it’s best to distribute your investment across separate accounts rather than putting all your eggs in one basket.

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Let’s take a brief look at the main high-interest savings products that you can choose from.

  • Easy-Access Savings Account

In exchange for a lower interest rate, an easy-access account typically allows you to gain immediate access to any amount of funds at any moment.

These accounts offer slightly higher interest rates, as you don’t have instant access to any amount of money. Instead, you need to inform the provider 30 days in advance.

  • Fixed-Rate Savings Account

Here, your money is kept for an agreed-upon period of time – usually up to five years. What’s great is that the longer you choose to keep your money, the better your guaranteed interest rate will be.

  • Cash ISA

An Individual Savings Account (ISA) is tax-free. The interest you earn doesn’t count towards your income as long as the sum is lower than £20,000. There are actually four different types of ISAs, this being the most straightforward variant.

The exact amount of interest you earn on any of these accounts depends on various factors, including the specific terms of the provider you choose. Your best bet is to contact your preferred bank or financial institution for assistance.

How Much Interest on a Million Pounds a Week?

To calculate your weekly earnings on an investment of £1 million is quite simple. If you know the annual payout, then you just need to divide it by 52. Your monthly figure can be divided by four to determine the weekly interest. You might not get an exact number, but it’s the easiest way to reach an approximation.

There are also interest earnings calculators available online that can do the math for you.

How Much Interest Would 1 Million Pounds Earn Strategically?

We’ll end off with a few quick recommendations on how you can maximise your interest. Keep these suggestions in mind moving forward:

  • Consult trusted resources to find the best accounts
  • Diversify your investment across different products
  • Determine the taxes your earnings are subject to
  • Opt for compound interest when possible
  • Factor in your future debts when deciding how much to save
  • Stick to long-term options that offer higher interest rates
  • Understand the specific terms and conditions for savings products


No matter how you invest your million, having that amount available puts you in an immensely fortunate position. Consider yourself responsible for making the most of it and you’ll soon find a way.

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