With a large sum, the first question isn’t the rate but the protection. The FSCS protects up to £120,000 per person, per bank, so above that amount where you put the money decides whether it’s all covered.
The limit applies per bank, not per account
The FSCS limit covers everything you hold with one authorised bank, building society or credit union, including your share of any joint accounts there. For a couple, that makes up to £240,000 per bank between you (how joint accounts count is in FSCS protection).
Several brands can belong to one bank. The FSCS protects up to £120,000 per person at each authorised bank, so brands that belong to the same bank share one limit: for example Halifax and Bank of Scotland share one, while Lloyds Bank has its own; NatWest and Royal Bank of Scotland are separate banks; and Virgin Money now shares Nationwide's. The full list of which brands share a limit is in the FSCS protection guide.
Splitting a large sum
To keep everything protected, put no more than £120,000 with any one bank, counting all the brands that share its limit. For example, £300,000 needs at least three banks: two with £120,000 each and a third with the remaining £60,000. Leave room under the limit for the interest the account will add.
Splitting also lets you mix access: part in easy access for anything you’ll need soon, and the rest in fixed rate bonds of different terms.
Savings platforms (also called cash platforms or deposit aggregators) spread your money across accounts with several banks through one login. Your money is still protected at each underlying bank, and it counts towards the limit alongside any accounts you hold with that bank directly, so check which banks the platform uses.
NS&I: no protection limit
NS&I (National Savings and Investments) is the government’s savings bank, backed by HM Treasury, and it secures 100% of the money you hold with it, however much that is. NS&I offers savings accounts and bonds as well as Premium Bonds, where you can hold up to £50,000 and prizes are tax-free. Compare NS&I’s rates with the averages in how to find the best savings account: the guarantee is the attraction, not always the rate. See Premium Bonds and NS&I.
After a house sale, inheritance or payout
Money that's in your account only because of a major life event, such as selling your home or an inheritance, can be protected up to £1,400,000 for 6 months from when it becomes yours, on top of the usual £120,000 limit. This gives you time to decide where the money goes; it doesn’t restart if you move the money. The qualifying events and the evidence you’d need are in the FSCS protection guide.
Tax on large amounts of interest
Interest on a large sum soon passes the Personal Savings Allowance. £100,000 earning the August 2026 average 1-year fixed rate of 4.04% makes £4,040 of interest in a year. For a higher rate taxpayer, with a £500 allowance, the tax on that is about £1,416.
Ways to reduce it:
- Cash ISAs: interest is tax-free, but you can pay in only £20,000 a tax year across all your ISAs. From 6 April 2027, the most people under 65 can put into cash ISAs is £12,000 of that a tax year.
- Premium Bonds: prizes are tax-free, though they aren’t guaranteed.
- Spreading between a couple: interest on a joint account is split equally between the holders, so each uses their own allowance.
- Timing: a bond that pays all its interest at the end puts it all in one tax year (fixed rate bonds).
Work out your own figure with the savings interest tax calculator. If your interest is over £10,000 in a tax year, you need to report it on a Self Assessment tax return.
Related guides
- Savings accounts guide: the account types, average rates, tax and protection in one place
- FSCS protection: the limit, shared licences and temporary high balances
- Money market funds: a cash-like investment, and how its protection differs
- Personal Savings Allowance: how much interest is tax-free