Earn Up To 5.0%* Tax-Free With Our ISA

PLUS: New investor offer: £100 bonus when you invest £1,000 or more for a year. Promotional Ts & Cs apply.

 

 Smiley faceFlexibility to withdraw and replace funds in the same tax year without affecting your ISA allowance.

Smiley faceBuild a Balanced Portfolio: Invest in the RateSetter Innovative Finance ISA alongside another ISA.

Smiley faceProtection: Provision Fund protects investors by providing a buffer from poorly performing loans.

Smiley faceInvestment terms to suit you: Invest in our Rolling, 1 year and 5 year market.

Smiley faceStart earning within 5 minutes: Quick and simple registration process.

Capital at risk, instant access not guaranteed. No FSCS protection.

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Figures correct as of the 1st February 2018.

*5.0% annualised rate is the 3 month average on the 5 year market on the 3rd April 2018.

**Funds must be replaced in the same tax years as they're withdrawn.

Benefits of the RateSetter IF ISA

The RateSetter IF ISA offers all the advantages of our Everyday Account in a tax-free wrapper. You’ll still benefit from the same Provision Fund, interest rates, markets and borrowers plus you’ll be earning gross returns.

 Earn up to 5.0%* on your investment.

 Tax-Free:All your earnings in the RateSetter ISA are tax-free, up to your £20,000 annual ISA allowance.

 Invest in a balanced portfolio of loans to businesses, property developers and individuals, where risk is balanced with return.

 Provision Fund Protection. The Provision Fund protects investors by providing a buffer against poorly performing loans. This isn't a guarantee for the future and your capital and interest are at risk.

 Flexible ISA: You can withdraw funds when you need them and replace them when you want - without affecting your ISA allowance.**

 No Investment or Annual Fees: Just a transfer fee if you need to exit your investment early.

  A Balanced ISA Portfolio: You can invest in the RateSetter IF ISA alongside any other Cash ISA or Stocks & Shares ISA.

  Transfer your existing ISAs: From April 2018 you'll be able to quickly and simply transfer funds from your other ISAs to the RateSetter ISA while retaining the benefit of the tax-free wrapper.

How RateSetter Works

RateSetter is a peer to peer (P2P) lender that allows investors to earn a good return on their money by lending to credit-worthy borrowers. We cut out costs and pass on the savings to investors and borrowers. Our role as a P2P lending platform is to bring together people that want to invest money with people that want to borrow money. At RateSetter we operate with a healthy level of caution and only match investors with borrowers who pass our stringent criteria. 

A proven track record in managing risk

Protecting you investment

We never forget we're looking after your money. We take a careful approach to lending and only lend to borrowers who are creditworthy when the loan is granted and can demonstrate that they are able to pay back the loan. That's why to date not a single investor has lost their money. Borrowers’ creditworthiness may change over time and cannot be guaranteed. Your investment and any reinvestments could be matched with new or existing loans to individuals (mainly lower risk but some higher risk), businesses, property developers and existing loans to other lending businesses (specialist financial businesses who lend onwards to individuals and businesses – now discontinued as a source of new lending).

Provision fund protection

Investments with RateSetter are protected by the Provision Fund which provides a buffer against poorly performing loans. Our Provision Fund is made up of payments received from every borrower, based on our assessment of their creditworthiness when the loan is granted. We aim to maintain the Provision Fund at a level intended to cover all expected future loan defaults. The Provision Fund has a 100% track record: to date, every investor has received the returns they expected. We are proud of this track record. However, this isn't a guarantee for the future and your capital and interest are at risk if the Provision Fund is depleted by increased borrower defaults, and investments are not covered by the Financial Services Compensation Scheme.

Your Investment Options

Rolling Market 

Loan terms: Your money will be invested in loan terms between 6 months and 5 years.

Earning: Your loans are continually repaid and reinvested at either the prevailing Rolling market rate or the rate at which you set. Your interest accrues for every day that your funds are on loan.

Risk: RateSetter offers protection through its provision fund but this is not a guarantee. This is an investment product and your capital is at risk if borrowers do not repay.

1 Year Market 

Loan terms: Your money will be invested in loan terms up to 1 year

Earning: Your capital and interest will be repaid at the end of the loan term. If your loans are fully repaid early your money will be reinvested according to your settings.

Risk: RateSetter offers protection through its Provision Fund but this is not a guarantee. This is an investment product and your capital is at risk if borrowers do not repay.

 

5 Year Market 

Loan terms: Your money will be invested in loan terms up to 5 years.

Earning: Your capital and interest will be paid as the loans are repaid, usually monthly. If the borrower fully repays early your money will be reinvested according to your settings.

Risk: RateSetter offers protection through its Provision Fund but this is not a guarantee. This is an investment product and your capital is at risk if borrowers do not repay.

Getting Started

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Frequently Asked Questions

How does the RateSetter ISA account work?

Investing through the RateSetter ISA works just like the RateSetter Everyday Account, with the added benefit that all the interest you earn is completely free of tax.

Both the Everyday Account and the ISA have the same Provision Fund, interest rates, borrowers, and markets.

What happens if I’ve already opened an Innovative Finance ISA in the current tax year?

If you’ve already subscribed to an Innovative Finance ISA in the 2018-19 tax year, you’ll be able to open your RateSetter ISA in the 2019-20 tax year, after 6th April 2019.

How can I open an ISA?

If you’re new to RateSetter, click here.

How much can I invest?

As with all ISAs, annual investment limits apply. The current limit is £20,000 per tax year across all your ISAs: Cash ISA, Stocks & Shares ISA, and Innovative Finance ISA. You can invest some or all of this £20,000 allowance in the RateSetter ISA, which is an Innovative Finance ISA.

You’ll be able to invest up to a further £20,000 in your RateSetter ISA in the 2019-20 tax year, which starts on 6th April 2019. The investment limits for future years will be announced by the Chancellor of the Exchequer in the yearly Budget.

I’ve already invested in a Cash ISA and a Stocks & Shares ISA in the current tax year. Can I also invest in the RateSetter ISA in the current tax year?

Yes. In every tax year, you can invest in one of each type of ISA, for example one Cash ISA, plus one Stocks & Shares ISA, plus one Innovative Finance ISA. The RateSetter ISA is an Innovative Finance ISA.

You can split your annual £20,000 ISA allowance between a Cash ISA, a Stocks & Shares ISA and an Innovative Finance ISA as you wish. For example, you may wish to invest £5,000 in a cash ISA, £5,000 in a Stocks & Shares ISA and £10,000 in an Innovative Finance ISA or put all of your allowance in just one of these products.

How can I fund my ISA?

The fastest way to fund your ISA is by debit card, so that you can immediately put your money on the market and start earning interest.

You can also invest by bank transfer or by moving money from your Everyday Account.

If you decide to fund your ISA by bank transfer, please note that your RateSetter ISA has a different RateSetter account number to your Everyday Account, so please ensure that you use the correct RateSetter account number as the reference when making your bank transfer. We will send you an email to confirm when we receive your bank transfer. When you know the funds have been received and applied to your RateSetter ISA, please log-in to your RateSetter account so that you can put your money on the market to start earning interest.

You can also move money from your Everyday Account holding account to your ISA holding account, as well as any money that is on market (but not on loan) from your Everyday Account to your ISA account. Please see below for more information about moving money that’s on loan from your RateSetter Everyday Account to your RateSetter ISA.

Can I transfer existing ISA funds to my RateSetter ISA?

After April 2018, we will accept transfers of ISA funds, which means that if you have Cash ISAs, Stocks & Shares ISAs and other Innovative Finance ISAs, you will be able to transfer some or all funds from those accounts into your RateSetter ISA while retaining the benefit of the tax-free wrapper.

I have some money in a Cash ISA – can I transfer this to a RateSetter ISA?

After April 2018, it will be possible to transfer existing Cash ISA funds, Stocks & Shares ISA funds and other Innovative Finance ISA funds into the RateSetter ISA.

Previous years' ISA subscriptions can be transferred into RateSetter in whole or in part (depending on the terms and conditions of your existing provider). These will not affect your ISA allowance for the current tax year.

ISA subscriptions for the current year can only be transferred in full.

Is the RateSetter ISA a flexible ISA?

Yes – the RateSetter ISA is a flexible ISA, so if you move money out of your RateSetter ISA, you can put it back in without affecting your annual ISA allowance. You can do this with your current tax year allowance as well as your previous tax year allowances, so long as funds are replaced in the same tax year as they’re withdrawn. For more information from HMRC on Flexible ISAs, please visit https://www.gov.uk/government/publications/individual-savings-accounts-increasing-flexibility-for-savers/individual-savings-accounts-increasing-flexibility-for-savers

Can I invest in all RateSetter investment options via the ISA?

Yes, you can invest in all RateSetter options – Rolling Market, 1 year market and 5 year market.

Does the RateSetter Provision Fund cover investments in the ISA?

Yes. The RateSetter Provision Fund protects ISA investors by providing a buffer from poorly performing loans.

Will the RateSetter ISA be covered by the Financial Services Compensation Scheme (FSCS)?

No. the Innovative Finance ISA is made up of Peer-to-Peer loans which are not covered by the Financial Services Compensation Scheme, so the capital you invest into your RateSetter ISA is at risk.

Can I access the money I invest in the RateSetter ISA?

Yes. You can access the money at any time by using the ‘Money Out’ functionality in your ISA Account to transfer your matched loans to another available investor and release your investment. You can then move the cash from your ISA holding account to your bank account.

For investments in the Rolling Monthly Market, there is no Transfer fee. For investments in the 1 Year, 3 Year or 5 Year markets, the regular Transfer fee will apply. We will always provide you with an estimate of fees, before you confirm a transfer request.

The Transfer fee varies by market and is the same for the Everyday Account and ISA: a fixed % of the value of the matched loans to be transferred to an available investor.

Note: If you choose to remove funds from your RateSetter ISA, you will lose the ISA tax-free wrapper around these funds. As the RateSetter ISA is a flexible ISA, under certain circumstances, you could replace those funds at a later date.

Transfers and Fees

It is important to distinguish between transferring your loans to another investor and the Transfer Out process which allows you to transfer all or part of your ISA fund to another ISA Manager.

The Transfer fee applies when you wish to transfer your investment to another available investor as you are effectively taking your money off the market.

There is no fee associated with the Transferring Out of an ISA or ISA funds (once any matched loans have been transferred to an available investor).

Is there a fee to Transfer Out my ISA or ISA funds?

There is no fee associated with Transferring Out your ISA or ISA funds to another ISA Manager (once any matched loans have been transferred to an available investor).

Are there any ISA fees?

There are no ISA-specific fees. The fees that apply are exactly the same as for the Everyday Account.

How is the RateSetter ISA different to other types of ISA?

You may already be familiar with ISAs that allow tax-free saving and investment in stocks and shares – these types of ISA have been available for many years now. RateSetter’s ISA is an Innovative Finance ISA.  Innovative Finance ISAs allow people to receive tax-free returns from investing in peer-to-peer loans.

It is important to remember that investing in peer-to-peer loans means that you are putting your capital at risk.

Why do I need an Everyday Account as well as an ISA Account?

Having an Everyday Account as well as an ISA account provides you with more flexibility e.g. in the event that you subscribe more than your annual ISA allowance, any excess can be routed to your Everyday Account. You are not required to invest via your Everyday Account, you can have the balance at £0. We just need that account to be open and work in tandem with your ISA Account.

What type of ISA is the RateSetter ISA?

The RateSetter ISA is an Innovative Finance ISA, sometimes called an IF ISA. Every tax year, you can open one Cash ISA, plus one Stocks & Shares ISA, plus one IF ISA.​

I’m not a RateSetter investor and want to open a RateSetter ISA. How can I do this?

To receive an invitation to open a RateSetter ISA before it’s available to new customers, you could open a RateSetter Everyday Account now. Then, as an existing RateSetter customer, you will be sent an invitation to open an ISA before new customers.

Please remember that in order to count towards your 2018/19 ISA tax-free allowance, any funds will need to be in your ISA, rather than your Everyday Account, before 5th April 2019.

This Q&A has been prepared by RateSetter. 

The tax benefits of an ISA are set out in the ISA Regulations 1998 (as amended from time to time) and any HMRC rules and guidance in relation to ISAs including but not limited to the HMRC Guidance Notes for ISA Managers.

The information contained within the Q&A is intended as general guidance and information.  As always, you should seek independent financial and / or tax advice in relation to any questions you have around your specific circumstances or taxation in general

Need some help?

If you have questions about the Ratesetter IF ISA, please contact us on:

Call: 020 3142 6226

Email: [email protected]