Cash in your portfolio

Interest rates
The following interest rates are applied to the different types of cash in your account respectively:

Cash in your investment pot
Interest rate: The current Bank of England (BoE) base rate minus 0.75% gross*.
Frequency: Interest is paid quarterly into the pot in which it was accrued.

*Please note, if the BoE base rate is 0.75% or lower, you won't receive any interest. However, at Nutmeg we will not allow your interest rate to fall below 0% (i.e. we will not charge you a negative interest rate), even if the BoE base rate is below 0.75%.

Cash only pots
Interest rate: 2.5% gross.
Frequency: Interest is paid quarterly into the pot in which it was accrued.

Transitory cash and Unallocated cash
Interest rate: 0%

Types of cash

The following are the types of cash you could see in your portfolio:

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Cash in your investment pot
All our investment portfolios contain a small amount of cash. The cash is used to pay the management fee without needing to sell investments to do so. Cash can also play a part in a diversified portfolio.

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Cash only pots
At Nutmeg, it’s possible for your Nutmeg General Investment Account, Nutmeg ISA, and Nutmeg Lifetime ISA investment pots to have a 100% cash allocation. A cash only pot is typically intended to mitigate your risk as follows:

1. Drip-feeding your cash into an investment portfolio
You can set up a regular monthly transfer from your cash pot into an investment pot to drip-feed your cash through to the markets. The drip-feeding feature taps into an investing principle known as pound cost averaging. By contributing smaller amounts on a regular basis, you buy into the markets during the various ups-and-downs, meaning you’re less exposed to short-term market movements.

2. Protecting your balance from market movements ahead of a withdrawal
Market volatility means that the value of your investments can go up and down. If you intend to withdraw your investments because you need them for an upcoming life event, like a house purchase, you can move them to cash to help prevent the value from fluctuating ahead of your withdrawal.

Things to consider:

• A cash pot is not a cash ISA and isn’t intended to be used for long-term savings. If you do not use your cash only pot for its intended use, we may take action under the terms and conditions to stop providing you with services and /or freeze your account.
• As the money in your cash only pot is not invested, we will not charge you management fees on the cash.
• Any contributions you make to your cash only pot within your Nutmeg ISA or Nutmeg Lifetime ISA will contribute towards your subscription limit. If you then choose to invest this money, it will remain within your ISA wrapper and will not affect your subscription limit.
• It's not possible to have a cash only pot for either a Nutmeg Junior ISA or a Nutmeg Personal Pension.

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Transitory cash and Unallocated cash
All money that is paid into Nutmeg needs to be allocated to a pot. When it is pending allocation it is held as 'Unallocated cash' in an Unallocated cash pot. If you have one investment pot, any money you pay in will be automatically allocated to your investment pot.
However, if you have more than one pot with Nutmeg and make a bank transfer (excluding transfers initiated using (a) Easy bank transfer or (b) “Pay in via Chase UK” functionality), we can’t be sure which pot you’d most like to allocate the money to. As such, it will be held as 'Unallocated cash' and we’ll contact you to request you allocate the cash to a pot so we can invest it.

Transitory cash is when the money is making its way into your account or out of the account.