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Cash interest explained |
You will receive interest on balances in your platform cash account at the prevailing rate.
Embark Investment Services Limited acts as the custodian for investments on the Willis Owen platform and is one of our strategic partners that provides our Willis Owen ISA, GIA, Junior ISA and SIPP.
Embark places cash with a number of banking partners for safekeeping and to provide the potential for you to earn interest on money in your platform cash account. By managing cash in this way, it aims to provide better protection and a higher overall level of interest than if all funds were placed with a single bank.
The rates of interest paid by banks will vary. Embark retains a portion of the interest earned to cover its costs in managing platform cash.
Current Interest Rate
The table below shows the current customer interest rate payable on cash balances along with the amount of interest retained by Embark. The customer interest rate shown is that after accounting for interest retained by Embark:
| Date From | Customer Interest Rate | Interest retained by Embark |
|---|---|---|
| 25th March 2024 | 2.46% | 1.75% - 2.00% |
Embark can change the rate of interest at any time and it reviews the position at least quarterly. Interest is calculated and accrued daily and is credited to your account on the first of each month. If you transfer out, accrued interest is applied at the point of transfer. We will inform you if and when the interest rate changes as soon as is practicable.
Interest retained
The table below shows the yearly equivalent rates of interest Embark expects to pay based on a range of possible yearly interest rates it may earn.
| Interest Embark expects to earn | Customer Interest Rate | Interest retained by Embark |
|---|---|---|
| 0-1% | 0 – 0.46% | 0 – 0.54% |
| 1-2% | 0.46% – 0.94% | 0.54% – 1.06% |
| 2-3% | 0.94% – 1.46% | 1.06% – 1.54% |
| 3-4% | 1.46% – 2.02% | 1.54% – 1.98% |
| 4-5% | 2.02% – 2.61% | 1.98% – 2.39% |
| 5%+ | 2.61%+ | 2.39%+ |
Historic Interest Rates
To see details of historic customer interest rates, along with the amount of interest retained by Embark, click here.
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Most people can earn some interest on their savings without having to pay tax. There are three main tax allowances which may reduce (or even eliminate) any tax you would otherwise pay which are:
These allowances apply for each tax year – from the 6th April to the 5th April in the following year. How much you’re entitled to depends on your other income. If you receive interest that’s over and above your available allowances in any tax year, you’ll pay Income Tax on the excess at your usual rate of Income Tax.
You can use your Personal Allowance to earn tax-free interest if you haven’t used it up on your other income (for example your wages or pension). The standard Personal Allowance is currently £12,750. For some people, with total income of over £100,000, the Personal Allowance can be smaller.
Some people can also get up to £5,000 of interest and not have to pay tax on it. The level of the allowance depends on how much other income you have. If your other income is £17,570 or more, you won’t be entitled to the starting rate for savings.
If it’s less than £17,570, you’ll be entitled to a maximum of £5,000 starting rate for savings depending on the level of your other income. Every £1 of income you earn above your Personal Allowance, reduces your starting rate for savings by £1.
So, for example, if you earn £17,000 in salary, the first £12,570 of your income is covered by your Personal Allowance. The remaining £4,430 of your salary reduces your starting rate for savings by £4,430 to £570. This means you can earn interest of up to £570 without paying tax on it.
Most people are also entitled to a Personal Savings Allowance of up to £1,000. The level of your available Personal Savings Allowance depends on the highest rate at which you pay UK Income Tax.
If you pay no higher or additional rate Income Tax, your Personal Savings Allowance is £1,000. If you pay tax at the higher rate (but not the additional rate), your allowance is £500. If you pay some additional rate tax on your income, you’re not currently entitled a Personal Savings Allowance.
Interest earned through Smart Savings is paid gross without the prior deduction of tax.
Interest becomes taxable at the point it’s made available to you to withdraw. For most fixed rate bonds, although interest may be earned and credited to your balance annually, interest is actually paid out at maturity so the interest earned will fall to be taxed in the tax year in which the product matures. You’ll find details of how and when interest is paid within the product details in our Marketplace.
Banks and Building Societies report all untaxed interest paid out after the end of each tax year to HM Revenue & Customs. If you’re employed or receive a pension, HM Revenue & Customs will normally change your tax code so you pay tax on any interest automatically.
If you complete a Self-Assessment Tax Return, you should report any interest earned on savings there. If you receive any interest from money you’ve deposited through Smart Savings, we’ll provide you with a statement shortly after the end of the tax year to help you do this.
