Why do my Cash ISA interest payments vary?

The interest you earn on your Cash ISA may change from day to day. This is because your funds are invested in a Qualifying Money Market fund, which is made up of a wide range of short-term, low-risk investments such as government bonds, corporate debt and bank deposits.

Each of these investments has its own interest rate, maturity date and duration. Some may generate interest daily, while others only do so periodically. As a result, the total return from the fund varies depending on the performance of the underlying assets.

Understanding the interest rate

The interest on your Cash ISA is shown as a variable AER (Annual Equivalent Rate). This is not a fixed daily rate and cannot be simply divided by 365. Here’s why:

• How AER works: AER (Annual Equivalent Rate) shows the interest you could earn over a year, assuming daily compounding. This means your interest builds on both your original deposit and any interest already added.
• Why daily rates vary: Since interest is compounded and money market fund returns fluctuate, your daily interest amount changes over time and cannot be calculated as a simple fixed rate.

How is the bonus interest paid?

If your Cash ISA includes the promotional bonus, this will be calculated in the same way as the standard rate, but rather than being paid daily, it’s paid as a lump sum at the end of the 12-month promotional period.

Cash ISA held in Qualifying Money Market Fund. Variable rate may change immediately. etoro account required. ISA powered by Moneyfarm. Your capital is at risk. Tax treatment depends on your individual circumstances. Promo T&Cs apply. Offer ends 28/02/26. UK residents only.