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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.

Investing for income or growth

Investing for income

If you require regular income you can invest in a fund that pays out dividends from equities or interest from bonds, rather than have your returns invested back into the fund. Typically, income funds pay out twice a year but this can vary so it’s important to check the literature on individual funds. You also need to be aware that income payments can go down as well as up.

When buying a fund for income you should purchase income units (or share classes), rather than accumulation units.

You can assess how much income a fund might generate by looking at its yield. This is a measure of income as a percentage of the value of the fund, but the amount is not guaranteed and you should take care when comparing the yields of different funds:

  • Equity funds quote a historic yield figure usually covering the previous 12 months up to the last dividend declaration date and based on the fund price at that date
  • Bond funds, on the other hand, quote a distribution yield which reflects the amount that the fund may distribute over the next twelve months (although these figures are not guaranteed and may change) as a percentage of the share price of the fund on the last working day of the previous month

Investing for growth

Investors looking to grow their capital over time should think about equity funds which adopt a growth style. You should always firstly consider your appetite for risk, as equities can be more volatile than other forms of investment.

Most growth funds pay lower or even no dividends, and whilst they can be more volatile in the short-term than income producing funds, they can also provide investors with the prospect of greater returns over the long-term.

If you want to focus on growing your money, rather than taking an income from it, you can choose the share class of a fund which reinvests any dividends to increase the size of your overall pot.

The other way to capture growth is to buy a fund with a growth style mandate; focusing on companies with strong growth prospects. These companies tend to reinvest profits in business expansion in contrast to more mature industries which have tended to pay out higher dividends.

When buying a fund for growth it is usual to purchase accumulation units (or share classes), not income units. With accumulation units, the net income is automatically reinvested into the fund which increases the fund price. Although, it is sometimes possible to purchase income units and to have the dividends reinvested back into your portfolio to buy more units.

The two types of funds most often associated with capital growth are:

  • Equity funds that invest in company shares
  • Multi-asset funds – investing in a range of asset classes

Income, growth or both?

How can you decide between income and growth investments? It all depends on your investment time frame, and what you need the investment to provide for you. If you need a regular stream of income, you should focus your portfolio on funds that will help you achieve this. If you have a longer investment time period, or you do not need an immediate income, you should think about a larger allocation to growth-focused funds.

Whatever your preference, if you hold a variety of investments, both growth and income, you should be better prepared for whatever economic ups and downs might be ahead. As your financial situation changes over time, you should be prepared to make the necessary adjustments to your portfolio, and switch from growth funds to income ones (or vice versa) as your needs and objectives change over time.


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