Earn up to 3.7% — without lifting a finger
No fixed terms. No exit fees. Easy access when you need it. Ideal for supercharging your cash, in step with the Bank of England base rate.
When you invest, your capital is at risk. ETF costs apply.
What is an Overnight Rate ETF?
Think of it like a savings account — but one that automatically moves with the Bank of England’s interest rate, without you having to constantly switch providers or chase deals.
An Overnight Rate ETF is a low‑risk fund that follows the SONIA rate — that’s the interest rate banks charge each other for overnight loans. It moves in line with what the Bank of England sets.
When interest rates rise, your return rises too. When rates fall, returns adjust accordingly.
Unlike more volatile stocks or bonds, Overnight Rate ETFs are all about low‑risk, steady returns.
Institutional investors park £££s here while they wait for the right opportunity. Now you can use the same tool, with no lock‑in period.
These funds aim to maintain capital value while earning interest — making them a great home for idle cash.
How is this different from a Money Market Fund?
Same idea, easier access.
Both Money Market Funds and Overnight Rate ETFs do the same job — they hold your cash in very short‑term, low‑risk instruments and earn you interest close to the Bank of England base rate.
The difference is mostly about how you access them:
| Money Market Fund | Overnight Rate ETF | |
|---|---|---|
| How you buy it | Through a fund provider directly | On a stock exchange, like any ETF |
| Who it’s designed for | Traditional institutions & wealth managers | Any investor — including you |
| Pricing | Priced once a day | Priced in real time during market hours |
| Costs | Often higher charges | Typically very low 0.05 – 0.10% / yr |
| Accessibility | Can require minimum investments | No minimum investment amount |
See how Overnight Rate ETFs work in 3 minutes
A quick explainer on how these funds mirror the Bank of England’s base rate — and why they’re used as a cash‑alternative by investors around the world.
A smarter alternative to cash
Whether you run an IT consultancy, a medical practice, or a property business — if you’re a UK limited company, your idle cash can be invested simply and efficiently. With easy set‑up, fast access and zero platform fees.
Yes, it’s really that simple.
Your rate tracks in step with the base rate
No need to shop around for the latest savings deals or keep switching saving accounts. Simple and low‑fuss investing.
Lower risk, stable returns
Less volatile than stock or bond markets. These funds aim for stability, generating steady returns.
Full access, no penalties
No fixed terms, no early exit penalties, no waiting periods. Your money stays liquid — ready to use elsewhere the moment you need it.
Works inside any InvestEngine account
Hold Overnight Rate ETFs in your ISA, SIPP, Business Account or GIA — just like any other ETF on our platform.
Is this right for me?
Overnight Rate ETFs work especially well if you are…
A saver looking for better returns without locking away your money
An investor
waiting for the right moment to seize opportunities
A business managing cash balances or surplus capital
Someone who wants a low‑risk buffer within a broader portfolio
*Tax treatment depends on individual circumstances and may be subject to change in the future.
Put your cash to work today
Explore Overnight Rate ETFs on InvestEngine with zero platform fees across ISA, SIPP, GIA and Business accounts.
Why InvestEngine?
We don’t believe in high fees, confusing products or noise. We keep it simple with low‑cost, long‑term investing built to help you achieve your goals.
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FAQs
Is my money at risk?
Overnight Rate ETFs are among the lowest‑risk investment options available — but unlike a bank savings account, they are not covered by the FSCS £85,000 protection scheme. These funds invest in very short‑term, highly liquid instruments and are designed to maintain stable value, but all investments carry some level of risk.
What is SONIA and why does it matter?
SONIA stands for Sterling Overnight Index Average. It’s the interest rate that UK banks charge each other for overnight loans — and it closely follows the Bank of England base rate. When the Bank raises rates to fight inflation (as it did
How quickly can I access my money?
You can sell your ETF holdings at any time during market hours. Settlement typically takes
Are there any fees?
InvestEngine charges zero platform fees. The ETFs themselves carry a small ongoing charge (typically
How is this different from a money market fund?
Overnight Rate ETFs are very similar to money market funds in their purpose — preserving capital while earning interest — but they trade on a stock exchange like a regular ETF, making them easier and cheaper to access for retail investors.