Searching for competitive rates on £1 million? It can feel like a never-ending quest given the wide range of account providers and the frequency with which rates can change.
The Insignis platform can simplify your search by giving you access to thousands of products from 50+ banks and building societies.
That said, how much interest you’ll earn on your money is only one of several important factors when choosing a savings account for seven figures. You must also consider your liquidity needs, fees, and more. You may also benefit from using various different types of savings accounts to access higher interest rates while diversifying your funds to reduce risk, take advantage of tax-free savings allowances, and to make sure you can access your money whenever you need to.
Disclaimer:The information provided in this article is for informational purposes only and does not constitute financial, investment, or professional advice. Insignis is not authorised to offer financial advice, and the information shared should not be relied upon when making financial decisions. For guidance tailored to your personal circumstances, please consult a qualified financial adviser.
Splitting your savings across several accounts can help you spread risk, achieve different goals, and ensure easy access to your cash when needed.
Let’s take a look at some of your options for short, medium, and long-term savings:
An Easy Access Savings Account (sometimes called an instant-access account) does what it says on the tin. It gives you the flexibility to add and withdraw money as and when required, although there may be limits on the amounts of withdrawals you can make each month.
The high level of flexibility makes Easy Access accounts a popular choice for an emergency fund. You’ll have quick access to your money should the unexpected happen.
It's worth noting, however, that the interest rates offered on these accounts tend to be lower than those offered on longer-term savings products. Further, many Easy Access accounts offer a variable rate of interest (i.e., one that may increase or decrease) making returns less predictable.
A NoticeSavingsAccount is similar to an Easy Access Account. However, you must give the provider notice before you withdraw money. This notice period tends to be between 30 and 90 days, although it can be longer. Typically, the longer the notice period you need to give, the higher the interest rate you’ll be offered.
Putting money into a Notice Savings Account can give you the best of both worlds: the flexibility of easier access while benefiting from a higher interest rate. This might work for you if you can plan withdrawals and time them to cover an upcoming expense.
Finally, Fixed-Rate Savings Accounts (fixed-rate bonds or fixed-term savings) lock your money away for an extended period to earn a fixed interest rate.
For example:
It’s worth noting that you typically can’t add to your savings pot following your initial deposit. And while you can access your cash, you’ll probably be charged an early withdrawal fee, which could offset the interest you earn.
There are a few things you can do to make sure you’re getting the best interest rate and the most value for your money when opening a savings account:
There are several things you might wish to consider to protect the value of your savings and keep your money safe when saving £1 million.
These include:
If you leave your money untouched in the same account for years and the interest rate doesn’t keep pace with inflation, your money could lose value. One way to maintain the purchasing power of any cash holdings is to regularly review available rates and to switch to providers who offer more competitive returns.
Depending on your circumstances, you may need to pay tax on the majority of the interest you earn on your £1 million savings. However, tax regulations on savings (and on specific types of accounts, such as ISAs) are changeable, so the best source of up-to-date information is the government website.
The Financial Services Compensation Scheme (FSCS) is designed to protect eligible deposits in the UK if a bank or building society fails. It guarantees up to £85,000 per eligible depositor, per institution (for the purposes of FSCS protection, banks or building societies in the same group are considered a single institution). If your bank or building society goes out of business, you'll be reimbursed up to that amount.
When you have £1 million to save, you’ll need to spread the money across several banks (each with distinct banking licences) to ensure you maximise your FSCS coverage. By depositing no more than £85,000 in each institution, you cover the entire amount under FSCS rules, preventing loss should one or more institutions collapse.
In theory, the best rates for £1 million in savings are, of course, the highest you can find. But it’s not quite that simple. The rate on an account is only one of the relevant considerations when you’re choosing where to deposit your money. Your choice will depend on various factors, and each account type offers different benefits.
Splitting your cash across several savings accounts will help you cover all the bases. Opening an Easy Access account gives you the flexibility for instant withdrawals. Meanwhile, Notice and Fixed-Term accounts can offer higher rates to help you maximise your returns in the long term. And by depositing your cash with a broad range of banks, you can reduce your level of risk.
With Insignis, you get access to thousands of savings products from 50+ banks and building societies, making it easy to optimise your FSCS coverage and find exclusive interest rates. Ask your financial adviser how you can get started today.
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