Six Compelling Reasons To Invest In An IFISA
Are you considering investing in an IFISA but you aren’t sure whether you are ready to take the leap of innovative faith? Here are six compelling reasons to invest in an Innovative Finance ISA.
1. Firms must be FCA-regulated
Every platform providing an IFISA product must be regulated by the HMRC and by the Financial Conduct Authority (FCA). The firms are required to maintain a wide-down plan to protect investors in case of difficulties and have sufficient reserves
If you are concerned about IFISA not being part of the Financial Services Compensation Scheme (FSCS), you should do thorough research and seek independent financial advice prior to investing. Additionally, before investing, you should check the FCA registry and the Companies House to ensure the business is legitimate.
2. Greater returns than traditional ISAs
With almost-near record-breaking and low-interest rates and a more increasingly expensive market, people are turning to investments with a higher return for their hard-working money. The average return on an IFISA ranges between 4-6% per annum. Whilst this isn’t a guarantee, there are usually management and dealing fees. IFISA’s returns are more significant due to the higher degree of risk by removing the middleman (for example; banks) so the investors gain a higher proportion of the interest.
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*Capital at risk. Don’t invest unless you’re prepared to lose money. This is a high-risk investment. You may not be able to access your money easily and are unlikely to be protected if something goes wrong. Take 2 minutes to learn more.
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*This figure was correct as of 29 June 2023
3. Filled a gap in the market
Since its inception in 2016 and an antagonising slow start, there were 50,000 IFISA accounts with over £1 billion invested by 2020. As the years have passed, this number has increased and there are more IFISA platforms each with its own interest rates, targets, goals and terms on offer. P2PFN reported IFISA outperformed the UK stock market in the four years between 2018 to 2021.
4. Spread your investment
If you are unsure whether an IFISA or any other ISA is right for you, you can spread your investments. You have a £20,000 per year limit to spend in any of the four ISAs (only a maximum of £4000 can be placed in a Lifetime ISA up until you are 50 as long as you opened an account before you’re 40).
5. You can pick your investments
With an IFISA, you don’t just invest and be gone. Instead, you can choose exactly how and where your money is invested. You can do so in ethical investing, investing in the property market, or in the future of other people. However you do so, you can find something to fund and see the difference your investment has made.
With Lendwise, you can choose how your money is invested. You can set to only fund certain students and or invest wholly across the board. With Lendwise, you will be able to set up an AutoLend feature which will automatically invest set per your choice. You can spread your investment to over 100 students or over 10000 students. Sign up to help make an ethical impact difference.
*Capital at risk. No FSCS protection. Terms and Conditions apply.
6. Easy to manage
IFISAs are all managed easily online which means the process couldn’t be any easier. When you find a platform you like, you should do your research to see if it fits your ideal investment plan. Before committing your funds to the platform, you will be asked a questionnaire demonstrating your understanding of all the risks involved and any protections offered.
*Capital at risk. No FSCS protection. Terms and conditions apply.
As with all forms of investment, your capital is at risk. Investments on the Lendwise platform are not covered by the Financial Services Compensation Scheme (FSCS). Investment returns on the Lendwise platform are not guaranteed and past performance is not a reliable indicator of future performance. We do not offer investment or tax advice.
Please seek independent advice from an external professional financial advisor before investing your money.
The tax treatment of interest and reliefs on defaults may be subject to change and tax treatment will depend on your individual circumstances.
