Amid the doom, gloom and uncertainty, it’s good to see the FinTech standard-bearer, Revolut, forging ahead. We’ll be doing more business as usual very soon (see below). Meanwhile, our friends at AltFi take up the Revolut story.
Digital banking service Revolut has given regular customers access to cryptocurrency trading for the first time, a feature previously reserved for its Premium and Metal customers.
Revolut says the move came about after its head of crypto, Edward Cooper, reminded it that the popularity of cryptocurrency came about after the 2008 financial crisis “as an alternative to real money during times of quantitative easing and currency devaluation.”
The banking service said it had planned to bring crypto trading to all its customers later in the year but, given the ongoing coronavirus pandemic it decided to “give all Revolut customers the opportunity to explore different ways of diversifying” their portfolios.
For now, standard customers can experience the same crypto trading fees as their Metal and Premium counterparts, however, in May this fee will jump from 1.5 per cent to 2.5 per cent for regular customers.
New loan offerings will appear on site soon.
Historical Performance And IFISA Process Guide
That figure is the result of over £20 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 2019/20 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.