Interstellar iron in the form of metallic iron nanoparticles may constitute a component of the interstellar dust. We compute the stability of iron nanoparticles to sublimation in the interstellar radiation field, finding that iron clusters can persist down to a radius of $simeq 4.5,$AA, and perhaps smaller. We employ laboratory data on small iron clusters to compute the photoelectric yields as a function of grain size and the resulting grain charge distribution in various interstellar environments, finding that iron nanoparticles can acquire negative charges particularly in regions with high gas temperatures and ionization fractions. If $gtrsim 10%$ of the interstellar iron is in the form of ultrasmall iron clusters, the photoelectric heating rate from dust may be increased by up to tens of percent relative to dust models with only carbonaceous and silicate grains.
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