INVESTORS are trading in their cash ISAs in favour of the Innovative Finance ISA (IFISA), analysis suggests.
It comes after figures from Assetz Capital revealed that while 52 per cent of investors had put money into cash ISAs in the first quarter of 2018, only 37 per cent continued to do so at the end of last year’s ISA season.
In contrast, 61 per cent of investors were using stocks and shares ISAs, 60 per cent had an IFISA, and a small minority were investing in Lifetime or Help to Buy ISAs.
In March 2018, the average interest rate offered by a cash ISA was only 0.7 per cent, according to Defaqto.
Jatin Ondhia, chief executive of Shojin Property Partners, which offers mini bonds, said the research shows investors are looking for better returns on their investments.
“Research has shown that although 58 per cent of investors prefer individual property investments opportunities, 42 per cent of investors like the simplicity of investing in a bond backed by a property investment company,” he added.
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The mini bonds enable investors to lend money over a fixed period of time at an agreed fixed return. Instead of going to the bank to ask for a loan, businesses can offer mini bond investments in return for loans.
“These mini bond investments are very popular with investors looking to diversify their portfolio and spread their risk,” Ondhia claimed.