ISA season is upon us, and the Innovative Finance ISA (IFISA) has never looked more appealing for yield-starved retail investors.
Low interest rates mean that cash ISA savers have little chance building on their wealth; while stocks and shares ISA investors have to reckon with ongoing stock market volatility.
IFISAs, on the other hand, represent an opportunity for risk-aware investors to make inflation-beating returns by investing in small businesses, properties and consumer loans.
But with RateSetter closed to new investment, and Funding Circle, LendingCrowd and Zopa pausing IFISA inflows for the current tax year, where can retail investors find an active IFISA which requires a minimum investment of £100 or less?
- £1 – £10
There are six IFISA providers accepting investments of £10 or less in the current tax year.
Assetz Capital is the only peer-to-peer lender which is offering both the institutionally-funded coronavirus business interruption loan scheme (CBILS) and retail-friendly IFISAs. New accounts can be opened for as little as £1.
Pawnbroking P2P lender Unbolted has no minimum investment threshold for its IFISA, and offers target returns of up to 12 per cent by investing in secured loans.
With a deposit of £5, retail investors can open an IFISA with Abundance Investment to invest in green bonds and local councils.
Three platforms – Loanpad, Share Credit and Rebuildingsociety – have a minimum investment threshold of £10.
Property lender Loanpad targets returns of three to four per cent across two different IFISA accounts, with interest paid daily.
Share Credit has a minimum of either £10 or $10 (£7.14) on its primary market, where target returns are as high as 16 per cent.
And in addition to managing a number of appointed representative platforms, Rebuildingsociety also offers access to its own IFISA accounts for £10 or more.
- £25 – £50
Just one P2P lender – Crowd for Angels – has a £25 minimum investment. Investors can access a range of tax-free crowd bonds on the platform, with target returns of eight per cent per annum. Investors can add funds using a debit card, bank transfer or even Bitcoin.
ShareIn offers ISA management services to a limited list of appointed representatives, with a minimum investment of £50 across the board.
Ethical bank Triodos has worked with ShareIn in the past, and offers its own bond-driven IFISA products to investors willing to commit £50 or more.
Leap Lending launched its first IFISA product in July 2020, and targets up to five per cent in returns, with a minimum investment of £50.
- £100 or less
In the current tax year, there are ten platforms offering IFISA products with an investment threshold of £100.
These include asset-backed lender Ablrate, property platforms Kuflink, LandlordInvest and Crowdstacker, and IFISA newcomer Elfin Market.
Consumer loan specialist Lending Works recently told Peer2Peer Finance News that it expects to keep its IFISA open throughout the current ISA season, with up to 4.5 per cent projected returns on investments with a £100 minimum.
Crowd2Fund offers between six and 15 per cent on its IFISA accounts, while Downing offers IFISA wrappers on its bond products, subject to availability.
JustUs also requires a £100 minimum investment in its IFISA products, as does property lending platform EasyMoney, with both platforms targeting variable returns of between 1.2 and 9.61 per cent.