P2P Yields Of 7% Are Investment Open Goal - Plus FinTech Event News
Time to remind you of a high-yield open goal (7 per cent net of charges and potentially tax-free). Money&Co.'s peer-to-peer (P2P) loans bring individuals looking for excellent returns on capital together with carefully vetted small companies seeking funds for growth. Our lenders, in the four years we have been facilitating peer-to-peer (P2P) loans, have achieved returns of over 8 per cent - 7 per cent net of charges, as stated above. Inflation in the UK is running near the 3 per cent mark. That return becomes even more attractive if you hold the loans in one of our Innovative Finance Individual Savings Account. See below for our step-by-step guide to IFISA investing.
Cash deposits that qualify for Individual Savings Accounts offer an average return of 1.03 per cent, according to research carried out by Money&Co.
A Process Guide To Innovative Finance ISA Investment
Our offering is an Innovative Finance ISA (IFISA) that can hold the peer-to-peer (P2P) business loans that Money&Co. facilitates. For the purposes of this article, the terms ISA and IFISA are interchangeable.
So here's our guide to the process:
Step 1: Register as a lender. Go to the login page, and go through the process that the law requires us to effect. This means we have to do basic checks on you to comply with money-laundering and other security requirements.
Step 2: Put money into your account. This is best done by electronic transfer. We can also process paper cheques drawn in favour of Denmark Square Limited, the parent company of Money&Co.
Step 3: Buy loans in the loan market. Once you've put cash in your account it will sit there - and it won't earn interest until you've bought a piece of a loan. It's this final step that requires lenders and IFISA investors to be pro-active. Just choose some loans - all loans on the Money&Co. site can be held in an IFISA - and your money will start earning tax-free interest.
The ISA allowance for 2018/19 is unchanged from last tax year at £20,000, allowing a married couple to put £40,000 into a tax-free environment. Over three years, an investment of this scale in two Money&Co. Innovative Finance ISAs would generate £8,400 of income completely free of tax. We're assuming a 7 per cent return, net of charges and free of tax here.
Once you have made your initial commitment, you might then consider diversifying - buying a spread of loans. To do this, you can go into the "loans for sale" market. All loans bought in this market also qualify for IFISA tax benefits.
Future Of FinTech - Get Discounted Tickets Here
Just a reminder – our very own Nicola Horlick, CEO of Money&Co. – will be headlining The Future of FinTech breakfast symposium, held in association with FinTech intelligence platform Another Crowd, and Business Cloud in London on 12 July. Money&Co. readers can get a discount on tickets for this event - see below.