Where to Put a Large Sum of Money: Practical Ideas for 2025

Got a windfall, inheritance, or a lump‑sum from a sale? The first thing most people wonder is where to stash it so it stays safe and still earns something. You don’t need a finance degree to make a good call – just a clear view of your goals, the time you have, and how much risk you’re willing to take.

Start by answering three quick questions: Do you need the cash soon? Are you chasing growth or just protecting what you have? And, how comfortable are you if the value wiggles a bit? Your answers will push you toward low‑risk accounts or higher‑return investments.

Safe, Low‑Risk Choices

High‑Yield Savings Accounts – These are still bank accounts, but the interest rates are several times higher than the typical 0.5% you see on standard accounts. Look for accounts that offer 3‑4% APR with no withdrawal penalties. They’re perfect if you might need the money within a year or two.

Cash ISAs (Individual Savings Accounts) – In the UK, an ISA lets you earn interest tax‑free up to the annual limit. A cash ISA behaves like a high‑yield saver but shields the interest from Income Tax. If the limit fits your lump sum, this is a tidy, no‑hassle spot.

Fixed‑Rate Bonds or Fixed Term Deposits – Lock your money for 12‑60 months and lock in a guaranteed rate, often around 4‑5% now. The trade‑off is you can’t touch the cash without a penalty, but the return is predictable.

National Savings & Investments (NS&I) products – Government‑backed options such as Premium Bonds or Fixed Rate Savings give peace of mind. Premium Bonds don’t pay interest, but they enter you into a monthly prize draw – a fun twist if you like the idea of a chance win.

Higher‑Return Options You Might Consider

Stocks & Shares ISAs – If you can leave the money untouched for five years or more, a Stocks & Shares ISA can deliver 6‑8% average annual returns, sometimes higher. You’ll pick a mix of index funds, dividend stocks, or ETFs that match your risk appetite.

Robo‑advisors – These online platforms build diversified portfolios based on a short questionnaire. They charge low fees (usually <1% a year) and automatically rebalance, making them a good entry point for hands‑off investors.

Real Estate Investment Trusts (REITs) – REITs let you invest in property without buying a house. They pay out most of their rental income as dividends, often yielding 4‑6% plus potential price growth.

Peer‑to‑Peer Lending – Platforms match lenders with borrowers, offering returns of 5‑10% depending on borrower risk grades. It’s riskier than a bank bond but can be a useful slice of a diversified plan.

Whatever route you choose, keep a short‑term emergency buffer (three to six months of expenses) in a highly liquid account. That way you won’t be forced to sell an investment at an inconvenient time.

Finally, don’t forget to review your choices at least once a year. Interest rates shift, tax rules change, and your own life goals evolve. A quick check can keep your large sum working the way you want it to.