With higher interest rates a widely predicted factor in our financial future, Fintech banking products are set to proliferate in the retail savings area. We’ve reported recent developments – and on banking products they must not be confused with P2P loan offerings of the type furnished on this platform – and will continue to do so.
JP Morgan’s Chase brand has today launched its first saver account in the UK, with a “market-leading” 1.5 per cent interest rate.
At launch, it offered customers a free basic current account with a range of simple, rewarding features to help people budget, manage, spend and set aside money.
The app-based savings account is available to new and existing Chase current account holders.
Savers can deposit up to £250,00 and can access their funds as often as they like, without fees, charges or loss of interest.
Customers can open multiple saver accounts to suit their savings goals.
Each saver account has a unique account number, enabling customers—or their friends and family—to pay in directly from other providers.
Each account can be named so it can be personalised towards a specific savings goal.
Loan Auction Latest
All these loans can be held, up to £20,000, as Innovative Finance Individual Savings Accounts (IFISAs). IFISAs are explained in more detail below. Here’s the latest from the auction room:
Historical Performance And IFISA Process Guide
That figure is the result of over £24 million of loans facilitated on the site, as we bring individuals looking for a good return on capital together with carefully vetted small companies seeking funds for growth. Bear in mind that lenders’ capital is at risk. Read warnings on site before committing capital.
All loans on site are eligible to be held in a Money&Co. Innovative Finance Individual Savings Account (IFISA), up to the annual ISA limit of £20,000. Such loans offer lenders tax-free income. Our offering is an Innovative Finance ISA (IFISA) that can hold the peer-to-peer (P2P) business loans that Money&Co. facilitates. For the purposes of this article, the terms ISA and IFISA are interchangeable.
So here’s our guide to the process:
The ISA allowance for 2020/21 is unchanged from last tax year at £20,000, allowing a married couple to put £40,000 into a tax-free environment. Over three years, an investment of this scale in two Money&Co. Innovative Finance ISAs would generate £8,400 of income completely free of tax. We’re assuming a 7 per cent return, net of charges and free of tax here.
Once you have made your initial commitment, you might then consider diversifying – buying a spread of loans. To do this, you can go into the “loans for sale” market. All loans bought in this market also qualify for IFISA tax benefits.
Risk: Security, Access, Yield
Do consider not just the return, but the security and the ease of access to your investment. We write regularly about these three key factors. Here’s one of several earlier articles on security, access and yield.