A guide to liquid IFISAs
IN THE world of finance, liquidity always comes at a cost. Instant access savings accounts pay less than fixed-term accounts, and most investment platforms deter withdrawals by charging hefty transaction fees. The world of peer-to-peer lending is not much different. Investors are rewarded with higher returns if they commit to longer-term investments, and fees are often charged for early withdrawal.
Read more: Five things you need to know about IFISAs
But the rising popularity of the secondary market and ‘instant access’ accounts have created enhanced liquidity for P2P investors. On an array of platforms, lenders can sign up for long-term loans before selling their stake to others, while some of the bigger platforms allow free or low-fee withdrawals.
For platforms that also offer the Innovative Finance ISA (IFISA), this means that customers can enjoy both liquidity and tax-free earnings with their P2P investments. Some people have dubbed these products ‘liquid IFISAs’, and they are filling a crucial need for investors who want inflation-beating returns without having to lock their money away for a year or more.
We’ve put together a guide to all the platforms offering IFISAs with extra liquidity…
Ablrate’s investors can use the secondary market to sell on loan parts at a discount, at a premium, or at cost value. There is no fee on the secondary market but Ablrate operates a full bid/offer system so you could lose if you buy a loan at a premium and it repays early.
Abundance investors can sell IFISA-based loans on the platform’s secondary market with no added fees.
- Assetz Capital
Assetz’ ‘easy access’ account allows investors to withdraw any amount of money at any given time, with no fees or penalties. Alternatively, IFISA investors can sell their loans to other Assetz members via the platform’s aftermarket. No direct fees are charged for selling loans on the aftermarket.
CapitalRise charges a flat fee of three per cent if investors want to sell their loans on the platform’s secondary market.
Investors can sell on loan parts via the Exchange with no added fees.
Folk2Folk investors can sell loans on the secondary market, but there are fees and conditions attached. There is a non-refundable ‘listing fee’ of £250 plus VAT for every listing made on the secondary market, even if the loan goes unsold. Any loans sold will incur a ‘success fee’ of 0.5 per cent plus VAT, minus the listing fee.
- Funding Circle
One of the biggest platforms in the UK, Funding Circle charges no fees for withdrawals. Investors can also opt to withdraw repayments as they come in, at no extra charge.
Investors can buy and sell any loans on FundingSecure’s secondary market at no cost. Sellers may only sell at a maximum discount or premium of one per cent.
- HNW Lending
IFISA loans can be sold on via HNW’s secondary market. If a loan doesn’t sell, HNW’s directors can choose to use their own funds to make up the remainder of the loan. There is a fee of 1.5 per cent on every loan or part-loan which is sold on the secondary market.
Withdrawals can be made from JustUs’ IFISA accounts at any time and with no fee. JustUs also allows investors to sell off up to 100 ‘slices’ of their loans on its secondary market to create added liquidity.
Investors in Landbay’s non-IFISA Tracker Account can make free withdrawals at any time. However, withdrawals from the IFISA account are charged at 0.2 per cent per transaction.
LandlordInvest’s customers can make free withdrawals from their IFISA account at any time. Alternatively, loans and loan parts can be sold off on the LandlordInvest secondary market, where a fee of 0.25 per cent is charged on any successful sales.
Any withdrawals from LendingCrowd’s Growth IFISA accounts are charged at a flat rate of one per cent per transaction. For the Self-Select IFISA, loan parts can be sold on the secondary market for a fee of 0.5 per cent.
- Lending Works
Repayments on IFISA-based loans can be withdrawn free of charge. The platform also offers a ‘Quick Withdraw’ service where loans and loan parts are sold on to other investors. This service comes with a 0.6 per cent charge, plus a flat admin fee of £20 every time a withdrawal is requested.
- Money & Co
All Money & Co investors can make use of the platform’s loan market, where any loans which are successfully sold are subject to a commission fee of 0.25 per cent.
Available funds can be withdrawn at any time from the MoneyThing IFISA, and loans or loan parts can also be sold on the secondary market at no extra charge.
Proplend charges investors a small fee for any IFISA withdrawals which are valued at £50 or less, and a 0.5 per cent commission applies on any loans sold on the site’s secondary market.
RateSetter’s easy-access account allows investors to make free withdrawals at any time. However, the one-year account charges 0.3 per cent on early withdrawals, and the five-year account charges 1.5 per cent.
Loans and loan parts can be sold on the Relendex secondary market with no fees attached.
There is a 0.5 per cent commission fee charged on any micro-loan sales on Rebuildingsociety’s secondary marketplace.
ThinCats has an active secondary market, where loan parts can be sold for a one per cent commission fee. Fees are rounded up to the nearest pound and automatically deducted.
- UK Bond Network
Investors can sell part-loans or full loans via the UK Bond Network secondary market, with no fees attached.
There is a flat rate of one per cent charged on any withdrawals from the Zopa IFISA.