To invest $1 million for passive income in Australia, you should focus on a diversified portfolio of income-generating assets, primarily high-quality Australian dividend-paying shares and exchange-traded funds (ETFs), with complementary allocations to real estate and fixed-income assets.
With a deposit of $1 million, you could earn about $50,000 in interest paid at maturity (calculated via Canstar's Term Deposit Calculator). A lower rate, such as 4.50% p.a., would earn $45,000 ($5,000 less).
Traditional savings accounts, generally reserved for short-term savings, available at banks generally yield low rates of interest. A million-dollar deposit with the average 0.45% APY would generate $4,510.08 of interest after one year. If left to compound daily for 10 years, it would generate $46,027.51.
Once you have $1 million in assets, you can look seriously at living entirely off the returns of a portfolio. After all, the S&P 500 alone averages 10% returns per year. Setting aside taxes and down-year investment portfolio management, a $1 million index fund could provide $100,000 annually.
Finding a standard savings account with a consistent 7% interest rate is rare in early 2026; however, banks like First Direct and Co-operative Bank (in the UK) offer 7% or higher on regular saver accounts, often tied to specific conditions like monthly deposits and limited withdrawal periods, while U.S. high-yield online banks offer around 4-4.35%, not 7%. For 7%+, you'll typically look at niche products, crypto, or international options, which often come with higher risk or complex conditions, not standard savings.
Pay Off Debt
One of the smartest things you can do with your million dollars is to pay off any outstanding debts. This can include credit card debt, student loans, car loans, or mortgages. By paying off these debts, you can free up more money in the long run, which can be invested or used to fund other goals.
If you wanted to earn an average $3,000 per month, you would need to invest $1.6 million ($36,000 divided by 2.2%). While there is nothing wrong with passive investing, most investors are likely to do much better if they build their own investment portfolio.
According to this rule, if you spend your retirement savings at a rate of 4% the first year and then adjust your withdrawals for inflation every year, your income will probably last three decades. Say you retire with $1 million. Per the 4% rule: In year 1, you would withdraw $40,000.
The 7 3 2 rule is a financial strategy focused on wealth accumulation. The theme suggests saving your first "crore" (ten million) in seven years, then accelerating the savings to achieve the second crore in three years, and the third crore in just two years.
Superannuation. Superannuation is a tax-effective way to save for retirement in Australia. Allocating a portion of your $1 million to superannuation can offer long-term growth and significant tax advantages. Super funds typically invest in a diversified mix of assets, providing steady growth over time.
If you only have $100,000, it is not likely you will be able to live off interest by itself. Even with a well-diversified portfolio and minimal living expenses, this amount is not high enough to provide for most people.
As of January 2026, several banks offer top term deposit rates, with Heartland Bank, G&C Mutual Bank, and Unity Bank often leading for 12-month terms around 4.50% p.a., while Rabobank is strong for longer terms like 3-5 years. Other competitive options include Judo Bank, Great Southern Bank, Qudos Bank, and Macquarie Bank, but rates change frequently, so checking comparison sites like Savings.com.au or Canstar for the latest deals is crucial.
A $1 million lifetime annuity could pay as much as $6,297 a month for a 65-year-old woman purchasing an immediate annuity. The monthly payout of a $1 million annuity depends on several factors, including when payments start, the length of distribution, and the annuitant's age and gender.
Put aside just $13.70 per day, and at the end of the year you'll have $5,000; double that to $27.39 daily and you'll have $10,000 by year-end—and that doesn't include the interest you may earn. You can save money by making a budget, automating savings, reducing discretionary spending and seeking discounts.
Here are 10 best passive income ideas, from a retired millionaire whose streams earn him $80,000 a year
Some have interpreted this to mean investing 70% of a portfolio in stocks and 30% in bonds, although work-outs seem to suggest special situations, which differ from bonds. Either way, Buffett has given different investment advice to investors based on their experience.
THE TOP 5 CAREERS OF MILLIONAIRES: - Engineer - Accountant (CPA) - Teacher - Management - Attorney Some of those are surprising, huh? Nope, teacher isn't a typo. You see, it's not chance or inheritance that creates most millionaires. It's a PLAN.
By most traditional measures, having a net worth of $1 million should put someone firmly in the “wealthy” category.
12 Things You Must Do When You Become Suddenly Wealthy
Finding a standard bank account with a 9.5% interest rate is highly unlikely in early 2026, as typical high-yield savings rates are around 4-5% (e.g., CommBank's 4.25% bonus, Bankrate's top online rates around 4.20%), while some specialized loans (like IDFC FIRST Bank education loans) or introductory fixed deposits (like G&C Mutual Bank's rates in Australia) might offer close to or above 4-5%, but 9.5% is usually for specific, limited-term promotions, specific loan types, or in different markets, not general savings.
In many cases, a smart plan is to set aside a small emergency fund first, then target high-interest debt. After that, you may want to grow savings for bigger goals. But, this may not always be the right solution. In some scenarios, it can be better to pay off debt before you save to reduce interest accrual.
Principality building society is paying this rate on its six-month regular savings account, provided you slot away between £1 and £200 a month. Elsewhere, Yorkshire Building Society has launched two new regular savers, both paying 8% on a one-year term.