How much interest on 2 million pounds | interest on 2 million pounds UK

Ever wondered how much interest you could make if you had £2 million pounds sitting in the bank? You’ve come to the right place to find this answer.

In this article, we will discuss different ways of generating interest on £2 million pounds. And also talk about how to invest that £2 million pounds.

How much interest on 2 million pounds

Based on the current bank interest rate of 5%, you could earn £100,000 in interest every year on 2 million pounds. This is equal to £8333.34 per month or £1923.07 per week.

However, how much interest can you really make depends on current interest rates and how you choose to invest it.

how much interest on%202 million pounds uk

Easy access savings account interest on 2 million pounds UK

With £2 million in an easy-access savings account, you will earn a decent interest income. Online banks typically offer higher interest rates than street banks. You can expect an average 3% interest rate on your savings. That would generate £60,000 in interest annually on £2 million. Not bad for keeping your cash accessible!

You can open easy access savings account at Lloyds banks. They will provide 4.59% AER on savings above £50,000. That means you could generate £90,000 each year.

Fixed-term savings account interest on 2 million pounds UK

When you have £2 million, you want to make the highest interest from there. In the UK, fixed-term savings accounts provide one of the highest interest rates. You can expect an average 5% interest rate on your deposit. That means you could earn over £100,000 in interest each year!

However, Natwest’s 1-year fixed-term savings account offers 5.60% AER. It could generate £112,000 in interest. A 2-year account offers 5.40% AER and would generate £108,000 in interest.

T-bills interest on interest on 2 million pounds UK

To earn interest on £2 million, one of the safest options is investing in Treasury bills. These t-bills, issued by the Bank of England, have a maturity period of 3 months to 5 years. T-bills backed by the UK government, which makes them a low-risk investment. Interest rates on T-bills can vary but currently at 5%. That means your £2 million could generate £100,000 in interest. You can buy t-bills from International Barclays Bank.

CDs interest on 2 million pounds UK

To maximise the interest income on £2 million, you could consider certificates of deposit (CDs). It offers for a fixed period, such as 3 months to 5 years. You can expect an average interest rate of 4.5% on your deposit. On £2 million, that’s £90,000 interest per year. To get the full £2 million insured, you’d need to spread the money over multiple CDs at different banks. You can buy online CDs at Barclays.

Bonds interest in 2 million pounds UK

Bonds are one of the most popular ways to generate interest income. You have two options to generate interest income from bonds. They are government bonds and corporate bonds.

1. Gilts

Gilts are government bonds issued by the UK Treasury. They offer very low-risk investment options since the government backs them. It generally offers stable interest payments. The average gilt yield interest rate is 4.25%. So £2 million could generate around £85,000 in the annual interest rate. Gilts come with longer terms like 10-15 years. You can buy gilts from UK Govt.

2. Corporate Bonds

Corporate bonds issued by major UK companies. It provides higher yields than government bonds because they have high risk. The exact yield will depend on the company. However, the average interest rate is around 6.5%. It could generate £130,000 annually on £2 million. However, there is a chance of default, so you could lose some or all of your investment.

investing 2 million pounds
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How to invest 2 million pounds in the UK

£2 million can generate big returns from investment. But it depends on the types of investments you choose. In the following we discuss some investment option where you can invest your £2 million.

Stock Market

If you invest £2 million in the stock market, you can potentially earn a sizable amount of money in returns. The actual return will depend on the types of stocks and funds you choose. However, if you invest for the long-term, like 10-20 years, you can generate a good income. Historically, the stock market generates an average return of 10-12% each year. At this rate, £2 million could grow to £200,000 to £240,000 per year.

Of course, stock returns vary each year and there is always a chance of losing money. A diversified portfolio of stocks can help you to reduce the risk. Exchange-traded funds (ETFs) and mutual funds track the overall UK stock market. You can invest there to cover many companies at once.

Real Estate

With a £2 million real estate investment, you can expect a sizable amount of income. It is one of the best investment options. You can earn money through rent and property appreciation.

With £2 million, you can buy several residential or commercial properties. On average, rental yields are 5% per year. That means £2 million could generate £100,000 in annual rent.

Your properties not only generate rental income but also increase in value. Historically, property appreciation has risen an average of 7% each year. That means an increase of £140,000 each year.

How much tax on my interest income

As a UK resident, the interest earned on 2 million pounds is considered taxable income. The tax rate you’ll pay depends on your interest income for the year.

To figure out how much tax you owe, first determine your tax bracket based on your interest income. Then subtract your £12,570 personal allowance. The remaining amount is taxed at your income tax rate.

For example, if you earn £60,000 from interest, you are a high-rate taxpayer. You would subtract £12,570 from £60,000, leaving £47,430 in taxable interest income. After tax £47,430 would be £43,853. Calculate your tax here.

Can I live on the interest from 2 million pounds?

With £2 million, you can generate a very good interest income. It will be enough to live in the UK. However, the amount of interest you can earn depends on where you invest your money.

At the time of writing, the average fixed-rate savings account rate is around 5%. On £2 million, that would generate £100,000 per year in interest. That would be enough for most people in the UK. 

However, if you want higher returns, you’ll need to invest in the stock market. Historically, the stock market has returned about 10% annually. If you invest £2 million in a balanced portfolio of stocks, ETFs, and index funds, you can generate £200,000 per year. Of course, the downside is your money could also decline for some years. But over 10-20 years, the stock market is the best option to get returns on your money.

With the right mix of savings accounts and investments, the interest income from £2 million should be enough to live comfortably in the UK.

can you live on interest income
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What can I buy with 2 million pounds?

With £2 million in the bank, you can buy a lot of things. Here are a few of the things you can do in the UK.

1. Property

In London, you can buy a nice flat for under £2 million in popular neighbourhoods like Battersea or Fulham. Or you can buy a block of flats outside London that comes at a cheap price.

2. Luxury Goods

If you want to splurge, £2 million can buy quite a lot of luxury items in the UK. You could get a new Aston Martin sports car, take a world cruise, or buy expensive watches and jewellery.

3. Donate to Charity

With £2 million, you’re in a position to make a big difference by donating to charities. Many reputable UK charities accept large donations to support their important work. Donating a part of the £2 million could help a lot of people in need.

How to make 2 million pounds?

To make your first £2 million, it will take dedication and smart financial decisions. But remember, there is no “get rich quick” scheme. Some tips to get you started:

1. Save aggressively

Aim to save at least 15-20% of your take-home pay each month. Put this money in a high-yield savings account to generate interest. The more you save, the faster you’ll reach £2 million.

2. Consider investing

Once you have a good amount in savings, look into investment options like the stock market or real estate. Historically, the stock market returns about 10% and real estate 7% annually. If you invest £10,000 every year in the stock market and get a 10% return, in 25 years, you’ll have over £1 million. Or if you invest £10,000 in real estate at a 7% return, in 25 years you’ll have over £600,000.

3. Start a business

Many millionaires make their fortune by starting a successful company. Identify a problem and try to solve the problem through your business. It will take time to become profitable, so keep your day job while you get it off the ground. With hard work your business could be worth £2 million or more. At the current time, you should start an online business. It could be successful in less time compared to traditional business.

4. Increase your income

To increase your income, you can ask for a salary raise from your employer. You can also pursue a side gig like freelancing to increase your income. The more you earn, the more you can invest towards achieving your 2 million goal.

5. Be patient and consistent

Remember that accumulating wealth requires patience and consistency. Keep your attention fixed on your 2 million goals. Also, contribute as much as you can towards investments. Over time, your money will experience exponential growth through the power of compound returns.


So there you have it, earning interest from 2 million pounds in the UK. With 2 million pounds, you could generate a good income without lifting a finger. The key is finding the right savings or investment option for your needs. Also, make sure the FDIC insures the account to protect your money. Once you find an attractive option, invest the money and enjoy the interest income.

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