Zopa latest peer-to-peer lender to reveal details of its IFISA
The Zopa IFISA product range will offer customers the same rates as those on its standard lending platform which are as follows:
- 1/2/3 year lending: 3.8% annualised return (pre-tax)
- 4/5 year lending: 5% annualised return (pre-tax).
Its IFISA will also be a Flexible ISA which allows customers to withdraw funds from the account without losing the annual tax-free allowance.
As an example, if you invest £15,240 (the maximum 2015/16 limit), and you then withdraw £5,000, you’ll still be able to top it up by £5,000 to earn tax-free interest.
Investors can also transfer from existing cash and stocks and shares ISAs to Zopa’s IFISA, while retaining their tax-free status.
The peer-to-peer lender said it’s not going to introduce any additional fees or charges on its IFISA range for savers, though for borrowers, they’ll pay a ‘loan servicing fee’.
Zopa, which has lent £1.3bn since it was founded in 2005, added that it’s working on a new range of products that it expects to launch ahead of the IFISA from 6 April, though details are still to come.
Earlier this week, Ratesetter became the first peer-to-peer lender to unveil its IFISA rates.
Innovative Finance ISAs: what you need to know
- This new type of ISA launches in April 2016 and means peer-to-peer investments will be able to be saved within a tax wrapper.
- Peer-to-peer lenders do not fall under the Financial Services Compensation Scheme (FSCS), which protects your money up to £75,000 in the event a firm goes bust.
- Only peer-to-peer lending platforms with a full Financial Conduct Authority will be able to offer customers the new IFISA – Zopa says it expects to receive the permission in the “coming weeks”.
What is peer-to-peer lending?