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Investors trading in cash ISAs for IFISAs


New research reveals that UK investors are dumping cash ISAs in favour of alternative Innovative Finance ISAs (IFISA).

Although 52 per cent of investors had put money into cash ISAs in Q1 2018, only 37 per cent still continued to do so at the end of last year’s ‘ISA season’. The findings also show that 61 per cent of investors were using stocks and shares ISAs, 60 per cent had an IFISA, while a small minority were investing in Lifetime or Help to Buy ISAs (4 per cent and 3 per cent respectively).
In March 2018, the average interest rate offered by a cash ISA was only 0.70 per cent. According to Shojin Property Partners, investors are looking for better returns on their investments. 
Jatin Ondhia, CEO, says: “Our ISA eligible mini bonds can give investors much better returns, up to 13 per cent fixed return per annum with some products. Since we launched our variety mini bonds last month, they have been popular with investors.”
“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 back by a property investment company.  What investors appreciate is that our mini bond investments are ISA wrapped bonds and eligible for tax allowances. This gives investors the opportunity to invest in a fixed rate ISA bond and not have the hassle of choosing a property to invest in. Even the best cash ISA does not compare favourably with the targeted returns that the Shojin mini bonds offer.”
“Our mini bonds give investors the opportunity 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.”

The Shojin mini bond investments are broken into three categories – gold, silver and bronze and comprise of monthly income bonds, annual income bonds and bullet bonds.

In the monthly income mini bond investment, you are entitled to receive monthly income payable into your wallet for you to use as you please. This mini bond is ideal for people with underperforming cash ISAs who want to receive monthly income. This mini bond investment is a fixed monthly income which can be redeemed at any time with 30 days’ notice. In the gold category, investors will receive 8 per cent per annum on investments larger than GBP100,000. The silver category offers investors 7 per cent per annum on investments between GBP50,000 – GBP100,000. Lastly, the bronze category offers 5 per cent per annum return on investments less than GBP50,000.
The annual income mini bond investment gives investors the opportunity to put their money away for between 1 and 3 years and not worry about it. This type of bond is ideal for anyone saving up for either a holiday, new car or home renovations. The minimum investment amount is GBP5,000 and it can be spread across the gold, silver and bronze categories. The gold category is a 3-year fixed investment and will return 11 per cent per annum. Our silver category is 2 years with a 10 per cent return per annum. Lastly, the bronze category will offer investors 8 per cent return for 1 year.
For example, if you have GBP10, 000 invested in the silver category (2 years at 10 per cent pa) you will be due to receive GBP2,000 interest at the end of the two-year period.
The Shojin bullet mini bond has been introduced for those looking to put their money away for a longer period of time and prefer to be paid at the end of the investment period. This allows investor the opportunity to sit back, relax and wait for their investment to deliver a fixed return upon maturity of their investment. This mini bond investment is perfect for someone looking to save to purchase a property or to use for their children’s schooling.
The minimum investment amount is GBP5,000 which can be spread across gold, silver and bronze categories and like the annual income bonds, the returns are reflective of the length of investment. The gold category offers a 5-year fix return of 14 per cent per annum, the silver category is for 4 years with a 13 per cent fixed return per annum and bronze is for 3 years and with a 12 per cent fixed return per annum. For example, if you invest GBP10,000 into the bronze category (3 years at 12 per cent pa) you will be due to receive interest of GBP3,600 at the end of the 3 years.

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