Does Interactive Investor pay interest on uninvested cash?

If you have an account with Interactive Investor, or you’re thinking of opening one, you may be wondering whether the company pays interest on uninvested cash. With interest rates having risen in recent years, you don’t want to be sitting on a pile of cash and earning no interest.

The good news is that Interactive Investor does pay interest on customers’ uninvested cash. Here’s everything you need to know about its process for paying interest on cash balances.

Interactive Investor’s interest rates for cash

While Interactive Investor pays interest on customers’ cash balances, interest rates vary depending on a few factors including the type of account you have with the company (e.g. SIPP, ISA, etc.), your cash balance, and the currency your cash is in. Rates also change frequently depending on UK and global interest rates.

Currently (as of October 2024), Interactive Investor’s interest rates for cash are as follows:

ISA and Junior ISA accounts 

Cash Balance	Gross %	AER %
On the first £10,000	1.75	1.76
On the value between £10,000.01 and £100,000	2.50	2.53
On the value between £100,000.01 and £1,000,000	3.50	3.56
On the value over £1,000,000	4.50	4.59

Trading Accounts 

Cash Balance	Gross %	AER %
On the first £10,000	1.75	1.76
On the value between £10,000.01 and £100,000	2.50	2.53
On the value between £100,000.01 and £1,000,000	3.50	3.56
On the value over £1,000,000	4.50	4.59

* For US dollar balances held in Trading Accounts, Interactive Investor will pay 4.75% (4.85% AER) on the value over £1,000,000.

SIPPs

Cash Balance	Gross %	AER %
On the first £10,000	2.75	2.78
On the value between £10,000.01 and £100,000	3.50	3.56
On the value between £100,000.01 and £1,000,000	3.75	3.82
On the value over £1,000,000	4.50	4.59

* For US dollar balances held in SIPPs, Interactive Investor will pay 4.75% (4.85% AER) on the value over £1,000,000.

Cash balances held in euros

Cash Balance	Gross %	AER %
Trading Account	1.75	1.76
SIPP	2.75	2.78

Note that AER stands for Annual Equivalent Rate and shows you the interest rate you’d receive over a year taking into account the effect of compounding interest payments.

When is interest paid?

Interactive Investors says that interest will become due and payable at the point that it is credited monthly on or around the 25th day of each month.

If your account is closed, no interest will be due or payable from the date on which interest was last credited to your account and the date of closure.

If you do not wish to receive interest from Interactive Investor for any reason (e.g. you follow Shariah investment principles), you can opt to receive no interest.

How is interest paid?

With Interactive Investor, all interest is paid gross of income tax (unless the company is required by law to deduct tax). So, it’s your responsibility to account for any tax payable on any interest paid.

Does Interactive Investor offer cash savings products?

Like many other investment platforms, Interactive Investor offers a cash savings account today. This could be worth checking out if you’re looking to get better rates for your cash.

With its Cash Savings Account, you can hold your cash savings in one place and pick the best deal from over 25 UK banks and building societies. Note, however, that the minimum deposit is £10,000 and you have to lock your money away for a fixed term.

Interactive Investor’s cash savings service is provided by Flagstone. So, it is not linked to your ii ISA, Trading Account, or SIPP.

Does Interactive Investor offer a Cash ISA?

At present, Interactive Investor does not offer a Cash ISA. So, if you’re looking to open this kind of ISA, you will have to go through another provider such as Hargreaves Lansdown or Trading212.

Summary

• Interactive Investor pays interest on customers’ uninvested cash
• Rates vary depending on your account type, cash balance, and the currency of your cash
• Interest rates can change over time