Interactive Investor


Do Stocks and Shares ISAs pay interest?

Do Stocks and Shares ISAs pay interest?

Stocks and Shares ISAs don't always pay interest, although some investments in an ISA might do. 

Gains in an ISA usually come from investment growth rather than interest. 

In Stocks and Shares ISAs, you can invest money in shares, funds, investment trusts, bonds and other investment types. The returns you receive will mainly depend on how well your investments perform over time rather than an interest rate. This means while there is a risk that you could get back less money than you started with, you could grow your money. 

With Cash ISAs and savings accounts, your money only grows with the interest rate given by your provider. If the interest rate is lower than inflation, you will lose money in real terms. 

In any type of ISA, the gains you make are tax-free. 

Interest from investments

You can earn interest from certain investments which you hold in a Stocks and Shares ISA. For example, bonds pay a fixed rate of interest. 

Any interest from your investments in a Stocks and Shares ISA is tax-free. The interest you earn also does not count towards your ISA annual allowance

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