Large Sum Account: What It Is and How to Use It

If you have a chunk of cash sitting around, a regular savings account probably isn’t giving you much back. That’s where a large sum account comes in. It’s basically a high‑interest account designed for customers who can lock away a big balance – think £10,000 or more – and still keep the money safe.

These accounts are offered by banks, building societies, and some online lenders. The main draw is a higher rate than a normal current or savings account, sometimes with extra perks like free transfers or no monthly fees. The trade‑off is usually a notice period (often 30‑90 days) before you can pull the money out without penalty.

Why Choose a Large Sum Account?

First off, the interest boost can be noticeable. If a regular savings account pays 0.5% and a large sum account offers 2.5%, that extra 2% on £20,000 means an extra £400 a year – a tidy sum that adds up over time.

Second, these accounts tend to be low‑risk. Your cash stays in a protected bank, so you don’t have to worry about market swings that come with stocks or crypto. It’s a solid way to park emergency funds, a house deposit, or any money you don’t need for day‑to‑day expenses.

Third, many providers let you link the account to your existing banking app, making it easy to move money in and out when the notice period ends. No need to juggle paperwork or visit a branch.

How to Pick the Right Account for Your Money

Start by checking the minimum balance. Some banks require £10,000, others start at £5,000. Make sure you meet the threshold, otherwise you might get a lower rate or be charged a fee.

Next, look at the interest structure. Some accounts give a flat rate, while others offer tiered rates – the more you keep in, the higher the percentage. Calculate the expected earnings for each tier to see which one suits your balance.

Don’t forget the notice period. If you think you’ll need quick access, a 30‑day notice might be better than 90 days. Some providers also charge a penalty for early withdrawals, so read the fine print.

Finally, compare any fees. A small monthly fee can wipe out the extra interest you’re chasing. Many high‑street banks waive fees if you maintain the minimum balance, but online‑only lenders may have zero fees altogether.

Once you’ve picked a account, set up an automatic transfer from your current account so you never dip below the required balance. That way, the higher rate does its work without you having to remember to move money each month.

Remember, a large sum account isn’t a magic money‑making tool. It simply offers a better return on cash you aren’t planning to spend soon. Use it alongside other savings strategies – like ISAs for tax‑free growth or investing for longer‑term gains – to keep your overall financial plan balanced.

Got questions? Common ones include:

• Can I have more than one large sum account? Yes, but each will have its own minimum and notice period.
• Is the interest taxed? In the UK, interest on cash savings is subject to income tax, but you get a personal savings allowance (£1,000 for basic‑rate taxpayers).
• What happens if the bank goes bust? Your money is protected up to £85,000 by the Financial Services Compensation Scheme.

Bottom line: if you have a sizable amount you don’t need right away, a large sum account can boost your earnings with little risk. Just compare rates, notice periods, and fees, then let the higher interest do the heavy lifting.