Earning interest on your account

The interest earned is paid annually on 5 April and, depending on the particular account, is normally added to the balance of the account.

Interest is normally paid net of tax having been deducted at 20%. However:

  • Interest on ISAs is paid in full with no tax deducted.
  • Non taxpayers who are ordinarily resident in the UK can arrange to have their interest paid gross by completing a form R85 (923kb pdf). 
  • If you need to check whether you are eligible to have your interest without tax deducted you can call HM Revenue and Customs helpline on 08459 800 645. More information is available on the HMRC website.

Except for fixed rate accounts, interest rates can vary. Current rates of interest are set out on the Interest rates sheet (114kb pdf). When they change we'll also let you know by advertising in the Times and the Sun or by writing to you if you have a variable rate product.

For a one year fixed rate ISA interest is payable on maturity.

For a one year fixed rate bond interest is paid on maturity, unless the monthly income option is selected.

More about tax on interest

We can pay interest without deduction of tax to individuals who are eligible and who certify that they do not expect to be liable to income tax. If we do not receive that certification, we will pay interest after deduction of income tax at the currently applicable rate.

If the tax deducted exceeds your tax liability (if any), you can make a claim to HMRC for repayment of tax. To determine whether there is any liability to tax at the higher rate, the amount of interest actually paid or credited to the account must be included in your annual income tax return, together with the amount of gross interest earned.

Each year we are required to supply to HMRC full information on the interest paid or credited to investors.

We are unable to pay interest without deduction of tax for non UK residents.