Compare best IFISA rates by p2p lending marketplaces and other providers. Use selection on right to find, compare and narrow results from the P2P Banking database.
*See marketplace for details. Especially bonus and cashback offers often have additional conditions attached that cannot be fully displayed in this standarized comparison. Also they might be temporary and expire. To get the bonus or cashback you usually need to register via clicking on the ‘Details’ link above.
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What is the Innovative Finance ISA (IFISA)? Glossary of terms explained
UK taxpayers can invest up to £20,000 per year tax-free in ISAs. This amount is per tax year, so a person could invest £20,000 this tax year and invest £20,000 in a different ISA next year.
Aside from the Cash ISA and the Stocks & Shares ISA a third kind of ISAs the Innovative Finance ISA short IFISA was introduced in 2016 with most offers becoming approved by HRMC only from the 2017/2018 tax year.
The main focus of this database is on IFISAs by p2p lending marketplaces, but there are and will be other types of IFISA products. A prerequisite for an IFISA product offer by a p2p lending company is full approval by the regulatory body FCA.
The ISA allowance
The ISA allowance of £20,000 can be invested in full in one IFISA or diversified (split) among the 3 categories of ISAs (see above). It is important that combined across types an investor cannot put in more than the ISA limit in a given year. However an investor may benefit from more tax free investing in a non IFISA account on a p2p lending marketplace, if he makes use of his personal savings allowance (PSA). For basic-rate taxpayers, up to £1,000 of interest each year can be earned tax-free. For higher-rate taxpayers, the amount drops to £500, and for additional-rate taxpayers the PSA is not available.
Some services allow investors to transfer in the amounts of an ISA of a previous year. These can be cash or stock ISAs (provided they allow transfer out) however the amount must be available in cash, so for example any stocks held need to be sold first. Not that the new ISA manager must initiate and manage the transfer. An investor that withdraws cash from the previous ISA and manually deposits it to the new IFISA risks losing his allowance.
Some services allow investors to transfer out the allowance. This is only possible, if the amount is available in cash, so any loan parts must be sold first. The marketplace might charge a fee and impose further conditions.
If an IFISA is flexible, an investor may remove funds during the tax year without losing the allowance benefits provided the funds are put back in in time before the tax year ends.
Some p2p lending marketplaces require a minimum investment amount for IFISA account. This especially needs to be considered if you split your allowance across ISA types. You can filter services by minimum amount required using the slider on the right.
While some IFISA offers come with a fixed interest rate, most have an interest rate range and the actual rate is dependent on the term, type, credit grade or other parameters of the individual loan. Also most rates are advertised rates. The actual achievable return will vary as it can be impacted by loan defaults, early repayments and the composition of the built loan portfolio.
Investors will be committed for the loan term, unless the marketplace offers a secondary market or a sell-out function. However with a fully amortized loan investors can expect to have about half of the principal returned mid-term. Unlike in an 1 year ISA or 2 year ISA, investors can use IFISAs to compose a portfolio with diversified terms by investing in multiple loans.
Most p2p lending marketplaces do not charge a fee to open and maintain the IFISA account and the investments. However a few do. To select only those products where there is no fee imposed on investments select the ‘Fee-free’ checkbox on the right.
A secondary market allows investors to sell and buy investments to/from each other. There are differences in the pricing mechanisms used. Some only allow trading at par, while other the seller to set premiums or discounts. The possibility to trade at premiums is important to those investors, that mainly want to profit from gains in their trading strategy rather than from interest earned.
The difference to a secondary market is that with Sell-Out an investor sells ALL his investments. Usually a Sell-Out is conducted in order to transfer out / withdraw & exit that provider.
IFISA Provider products currently included in P2P-Banking database
Listed in alphabetical order: Ablrate IFISA, Abundance IFISA, Advancr IFISA, Basset & Gold IFISA, Brickvest IFISA, Capitalrise IFISA, Crowd for Angels IFISA, Crowd2fund IFISA, Crowdstacker IFISA, Downing IFISA, Folk2Folk IFISA, Funding Secure IFISA, Goji IFISA, HNW Lending IFISA, Kuflink IFISA, Landbay IFISA, Landlordinvest IFISA, Lending Works IFISA, Lendingcrowd IFISA, Money&Co IFISA, Mongoose Crowd IFISA, Octopus Choice IF ISA, Propertycrowd IFISA, Proplend IFISA, Rebuilding Society IFISA, Relendex IFISA, Uk Bond Network IFISA, Zopa IFISA
IFISA Offers expected to be launched in future
These new ISA offers are expected to be launched once the provider has obtained the necessary approval. P2P Banking will include new offers in the IFISA comparison database soon after launch. Listed in alphabetical order (this is by no way a complete list of IFISA offers in planning): Archover IFISA, Assetz Capital IFISA, Collateral IFISA, Flender IFISA, Funding Circle IFISA, Lendy IFISA, Moneything IFISA, Octopus Choice IFISA, Peerfunding IFISA, Ratesetter IFISA
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