An Innovative Finance ISA is a way for investors to lend in peer to peer funding and earn tax-free returns. This type of investment is offered by peer to peer lenders. IFISAs are a different type of individual savings account which users can open with a separate investment account within the same tax year. But, savers who decide to do that will have to break up their annual savings allowance between different account types if they do so. An ISA allows investors to earn tax-free interest on their investments and savings. Every year they can put their funds of up to £20,000 into an ISA, and any interest that they earn will be tax-free. Since Innovative Finance ISA is a type of ISA, it has all the similar tax benefits; however, your funds are invested in p2p loans. This type of investment offers a fixed interest rate and is not as vulnerable as stocks and shares ISA to the fluctuations in the stock market. For instance, if the cash ISA offers 1.0% per annum, the IFISA can offer returns of up to 12% per annum. However, investors have to remember that as returns are high, the risks are higher as well. So, before deciding to invest funds, users have to do the research, so learn about Innovative Finance ISA on our website.
