easyMoney Review – What you need to know BEFORE you invest!
LINKS MARKED * ARE AFFILIATE LINKS.
In this easyMoney review I examine this IFISA provider more closely, giving you the information you need BEFORE you invest.
I explain how their different accounts/products work and look at whether your money will be safe with easyMoney.
The first thing you likely noticed when you came across easyMoney* is that the branding looks strangely familiar. This is because easyMoney is brought to you from the ‘easy’ family of brands. These include well-known names like easyJet, easyHotel and easyCoffee founded by Sir Stelios Haji-Ioannou.
Now that we’ve establised who easyMoney are, let’s look a little more closely at what they have to offer.
What Accounts Do easyMoney Offer?
EasyMoney offer 2 main types of account, a Regular Account and an Innovative Finance ISA. The main difference between these accounts is that the Regular account is taxable, while the IFISA allows for tax-free returns.
Within these accounts you can then choose a product based on the level of risk you are willing to take. The two main products easyMoney offer are the Premium and Premium Plus products. We’ll explain how these differ as you read through the review.
The company now also offer High Net Worth and Professional Investor products. These products offer higher projected rates of return and special bespoke features. The minimum investment for the High Net Worth product is £100,000 while it’s £1,000,000 for the Professional Investor.
How Do Innovative Finance ISAs Work?
Innovative Finance ISAs were introduced by the government in 2016. They allow investors to participate in peer to peer lending with the added benefit of tax-free returns.
With this kind of ISA, you invest your cash with your chosen provider and they then lend it out to others. The return on your investment comes from the interest paid on these loans.
As Innovative Finance ISAs are Investment ISAs and not Cash ISAs, the capital you invest is at risk. Many Innovative Finance ISA providers try to reduce this risk in certain ways.
We’ll discuss how easyMoney do this now while explaining how the company invest your money to get the projected returns.
How Do easyMoney Invest Your Cash?
It’s important to know that different Innovative Finance ISA providers specialise in lending to different types of borrower.
easyMoney* specialise in lending to carefully selected property professionals. These professionals are usually looking for short-term finance of between 3 and 12 months to fund property purchases. To reduce the risk to investors, easyMoney take security over each property they lend on.
With easyMoney you do not get to select which property loans your money gets invested into. If you want this option then you might want to take a look at the Select-Invest account from a similar company called Kuflink.
Who Can Invest With easyMoney?
You can invest in an Innovative Finance ISA alongside a Cash ISA or Stocks and Shares ISA. Just remember that you can only invest a maximum of £20,000 in the current tax year across all the ISAs that you own.
To open an easyMoney ISA*, you’ll need to invest a minimum of £100 if you are investing in the Premium product or £20,000 if you opt for the Premium Plus product. You’ll also need to be sure that you haven’t already paid into another IFISA in this current tax year.
As this is an ISA product, you will need to be a UK resident. You will be asked to provide your National Insurance number when you register.
What Returns Do easyMoney Offer?
The interest rate you will receive on your easyMoney account will depend on whether you opt for the Premium or Premium Plus product.
At the time of writing, the Premium product offers a projected interest rate of 5.28% per annum and the Premium Plus product offers a higher rate at 6.27%.
For High Net Worth investors (investing over £100,000) the projected rate is 7.26%.
While we do our best to keep rates up to date, it would be wise to check the latest rates here* in case they have changed recently.
A professional investor can earn up to 8% per annum but you will need to phone Easy Money to enquire.
The interest rate is higher on the Premium Plus product because loans are made up to 75% of a property’s value. With the Premium product, it’s only up to 65%. This means that less risk is taken on the Premium product.
Then there’s also the fact that there’s a £20,000 minimum investment with the Premium Plus product. While with the Premium product the minimum investment is only £100.
It’s worth mentioning that these are projected rates, so they may differ slightly to the headline rate. This will depend on whether your capital is invested 100% of the time or whether there are gaps in lending.
As mentioned earlier in the review, higher returns are possible for high net worth or professional investors.
How Long Will Your Money Be Tied up For?
How long your money will be tied up for will depend on the length of the loan you’re invested into. If you want to withdraw early, then it may be possible to request your loans be sold to another investor.
What Other Benefits Are There?
An added benefit of becoming an easyMoney investor is that you’ll get an easyMoney plus card when you join the easyMoney family. The easyMoney plus card* is a discount card that you can use at 100s of high street retailers and attractions.
Is Your Cash Safe With easyMoney?
Now we come to that all important question, is your cash safe with easyMoney?
As this is an investment ISA, your capital could be at risk. While easyMoney are regulated by the Financial Conduct Authority, there is no FSCS protection on Innovative Finance ISAs. Really then, the security of your capital will depend on a couple of factors.
The first factor is how easyMoney select their potential borrowers. To understand more about how this works and what would happen in the event of missed payments on a loan, we would encourage you to read the ‘understanding the risks’ page on the easyMoney* website.
The second factor that might affect the security of your capital will be the performance of the property market. If a property you are invested in suffers a loss in value, then this might affect your returns.
Are easyMoney Right for You?
We hope that this easyMoney review has given you a better understanding of how their accounts and products work.
Whether you choose to invest with easyMoney* or not will depend much on your perception of risk vs reward.
If you are looking to invest in the easyMoney ISA, then be sure to check if you have already invested in an IFISA this year. You will also want to check if you have already invested or saved up to your ISA limit.
Don’t forget that easyMoney also offer a Regular investment account for those who aren’t eligible for their ISA.
*Capital at risk
*easyMoney not covered by FSCS
*Tax treatment is dependent on your individual circumstances + *Subject to HMRC requirements
*Past results do not guarantee future results
As mentioned at the start of this post, some of the links included in this easyMoney review are affiliate links. This means I may receive a small commission if you decide to open an account. If you would rather I didn’t then here is a direct easyMoney link.