I doubt they could get interest paid on the whole amount or anywhere close to it. Many accounts will only pay interest up to an amount such as £2,500 and you can only have an account or two with each provider. Even if they could put it all in an ISA, I think they'd still pay more interest on the bar than they received.
It all struck me as a very contrived way to give Alfie bad news.
Re: The value of the Vic, Phil was asking 800k when he sold it. I think Alfie was quite desperate for it so offered above the odds.