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Post by befuddled on May 1, 2018 15:22:03 GMT
They snuck this in... members.ratesetter.com/noticeboard/_simplifying_the_rolling_marketSo if I understand correctly you will not be able to set interest rate for re-investment on rolling market. I use this feature extensively - locked re-investment at 3.2% - money always went within a day or two and I could hit the peaks and avoid the troughs. New rules from June 6 seem to say re-investment is only offered at market rate - which takes all the fun out it ! below from RS website - I wonder who these customers are, I suppose borrowers, no one asked me...! Why are you taking away the option to set rates for reinvestments?
Our customers have told us that they would prefer less volatility in the Rolling market rates. By simplifying some of the features of the Rolling market we are aiming to make it more stable and predictable.
Automatic reinvestments at Market Rate will result in continuous earnings for all. Currently more than 93% of RateSetter investors reinvest at the market rate and therefore we have decided to withdraw the option of selecting a bespoke rate for reinvested money in the Rolling Market.
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jlend
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Post by jlend on May 1, 2018 16:50:06 GMT
I do wonder why they didn't replace the account with one that simply paid a fixed rate of 3 percent and did away with all the complications.
They must have had some great workshops coming up with the revisions and marketing material.
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ashtondav
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Post by ashtondav on May 1, 2018 17:30:33 GMT
I do wonder why they didn't replace the account with one that simply paid a fixed rate of 3 percent and did away with all the complications. They must have had some great workshops coming up with the revisions and marketing material. 3%! They want to go lower than that. Much lower.... Oh, and why not extend this fantastic idea to other products. Zopa here we come...
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Post by bracknellboy on May 1, 2018 17:38:42 GMT
at what point will they change the name of the business ? somewhere along the line the origin and meaning of "RateSetter" has morphed from YOU set the rate you were prepared to lend at to WE'LL set the rate you will lend at....
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coogaruk
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Post by coogaruk on May 1, 2018 17:53:28 GMT
Presumably you'll be able to divert Rolling money to the holding account for later reinvesment at whatever rate you choose?
I appreciate that'll involve more manual work but hey isn't that exactly what 'hands-on' investors do already in order to maximise their returns?
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pikestaff
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Post by pikestaff on May 1, 2018 21:27:21 GMT
Presumably you'll be able to divert Rolling money to the holding account for later reinvesment at whatever rate you choose? I appreciate that'll involve more manual work but hey isn't that exactly what 'hands-on' investors do already in order to maximise their returns? That sounds like it should work in theory. Unfortunately it won't really work for me. I run an account for my Mum where (on her behalf) I reinvest capital only. Interest is accumulated in the holding account and paid out automatically once a month. If I were to switch to sending everything to the holding account it would be incredibly hard work separating out and reinvesting the capital every day. From today she and I will no longer be using the rolling market.
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Post by honda2ner on May 1, 2018 21:43:37 GMT
So a website called Ratesetter is now preventing lenders from setting rates. Wow, that's powerful stupid.
The new 14 day delay to stop lenders selling out to buy at higher current rates is rich considering RS has been profiting from the steady decline of rates so has PROFITED from every lender liquidating their loans. Now they expect interest rates to rise they throw their toys out the pram and change the rules to stop lenders doing what they've done for years.
I've been in drawdown mode for a while, there are better investments out there than RS's appalling recent rates, many of them backed with real assets and not a discretionary PF that might not pay out if things really go tits up. A whole raft of measures to restrict lender flexibility is making me want to get my money out even faster.
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ceejay
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Post by ceejay on May 1, 2018 22:23:01 GMT
My initial reaction is very negative - am contemplating shifting out my IFISA funds from this year. However, this may require some thought.
As I understand it, the potential upside is that if you are lucky enough to snag a good rate, you can keep it for as long as the underlying loans run.
So, might it work if you set up a wedge with whatever you consider to be a decent rate and then just sit and wait for it to catch ... and, as long as you're not too greedy, then sit on the benefit of having a good rate for some time without having to worry about renegotiating every month, while still having the option to cash in without penalty at any time.
Of course, this does depend on there being a peak of strong demand before your patience runs out!
Just need to make sure that any present funds are "free" before the new system cuts in on June 6.
Of course, when the loan does eventually end you'll have to face 14 days of cash drag before repeating, unless there is a better offer elsewhere at the time. Within an IFISA that could be quite a pain: outside, not so bad, especially if you have Mr and Mrs accounts to play with.
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Stonk
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Post by Stonk on May 2, 2018 0:48:36 GMT
I'm not sure I will completely understand how this change will work until I see it in action.
However, it seems to me that the Rolling Market will operate virtually the same as the 5 Year Market. The difference is just the penalty for cashing out early: on 5 Year it is 1.5% of the amount cashed; on Rolling it is a fortnight of being prohibited from reinvesting (which is extraordinarily bizarre).
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Post by p2plender on May 2, 2018 1:34:23 GMT
Next Ratesetter will be changing its name to Rateset.
Too much tweaking going on.
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jlend
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Post by jlend on May 2, 2018 5:56:40 GMT
I pity the lenders who get caught out with the lend it now rate and end up lending on the rolling market for 5 years at circa 2 percent...
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Post by Deleted on May 2, 2018 6:00:15 GMT
I am not happy about the way this has been announced. Is this the new standard for ratesetter? This is a fundamental change and the details should have been sent by email to all members.
As others have stated, this change clearly undermines the whole principle of The Ratesetter business - that the investor can set their own rate - even if they want the money to sit forever waiting to be invested.
It would appear Ratesetter want to force the rate down for whatever reasons - the statistics they supply about the status of the markets have shown significant downtrend in rates over the last year or so - ever since they had to take a massive hit for those failing car money lending businesses they were dealing with.
I am not clear why Ratesetter is doing this - they claim that the current model is costing them.
In the past year or so we have seen the elimination of the medium term investment market (3 year) and now major changes to the short term (rolling) market. It would appear that Ratesetter, like,Zopa and others are heading towards the idea of long term (5 year) investment for low yield (slightly above bank rates) and want to become “new generation banks”. Well no thanks. You are not banks - the risks of collapse are far to great and the marginal rate you offer is far too low for long term risk commitment. If I wanted this model I would invest in traditional stocks and shares.
Personally, I will no longer use the rolling market, and I will begin withdrawing funds - I have my personal reasons for doing this. I had enjoyed my foray into P2P but all indications are that it’s days are numbered.
(I might be going “over the top” with this assessment, but we all have our own levels of risk we are prepared to accept and I cannot afford to lose too much).
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jlend
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Post by jlend on May 2, 2018 6:50:50 GMT
Presumably you'll be able to divert Rolling money to the holding account for later reinvesment at whatever rate you choose? I appreciate that'll involve more manual work but hey isn't that exactly what 'hands-on' investors do already in order to maximise their returns? That sounds like it should work in theory. Unfortunately it won't really work for me. I run an account for my Mum where (on her behalf) I reinvest capital only. Interest is accumulated in the holding account and paid out automatically once a month. If I were to switch to sending everything to the holding account it would be incredibly hard work separating out and reinvesting the capital every day. From today she and I will no longer be using the rolling market. I wonder if it is worth you considering the 5 year market and taking a hit on the 1.5% sell out fee if you ever need to withdraw all or some of the capital. It does have drawbacks eg liquidity risk and only works if the money is left on the market for sufficient time to offset the fee. It was just a thought.
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Post by yorkman on May 2, 2018 7:25:55 GMT
With this news I'm voting with my feet. I've set all reinvestment to go to the Holding Account from whence it will be withdrawn and moved to something more profitable. This time next month my Rolling Account balance will be zero so they do with it what they want but they will do it without me.
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m2btj
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Post by m2btj on May 2, 2018 7:55:37 GMT
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