What is the difference between an IFISA and other ISAs?

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The Innovative Finance ISA allows individuals to earn tax-free interest by investing over Peer-to-Peer and Crowdfunding platforms. With the ArchOver IFISA, you are lending your money to established UK businesses and you can earn up to 10% p.a. on your investments. As with all investing, your capital is at risk.

The Cash ISA includes savings in bank and building society accounts and some National Savings and Investments products. A Cash ISA usually offers returns of 1 – 3% p.a.. Your capital is not at risk as you will never get back less than you put in.

The Stocks & Shares ISA includes shares in companies, unit trusts and investment funds, corporate bonds and government bonds. With a Stocks & Shares ISA, you are investing your money and, as such, there is the risk that the value of your money can decrease as well as increase over time.

The Lifetime ISA (“LISA”) can be used to purchase your first home or to help you save for retirement. It works slightly differently to other ISAs, in that you can put up to £4,000 a year into your LISA until you are 50, and the government will add 25% bonus to your savings, up to a maximum of £1,000. You can only withdraw your funds if you are purchasing your first home, are aged 60 or over, or are terminally ill, otherwise there is a 25% charge.