|
|
Post by bikeman on Oct 1, 2019 18:43:09 GMT
Noticed that my funds are not being reinvested despite set to reinvest at market rate.
I was under the impression that funds would be reinvested at what ever the prevailing market rate was when they reached the top of the lender queue. However after querying why my funds failed to reinvest for almost 2 weeks, customer services tell me that 'my rate' is set at the time of the funds becoming available, so if the prevailing market rate is lower than my funds wont reinvest until the market rate rises again. In a falling market my funds will never get reinvested until I manually override the lending rate. That can't be right.
Secondly, I have an increasing amount in my holding account but the rep couldn't explain why. Why would this happen if I have reinvest at market rate set?
I'm not sure the guy at ratesetter knows what he's talking about so I'm asking here.
Thanks
|
|
Stonk
Stonking
Posts: 735 
Likes: 658
|
Post by Stonk on Oct 1, 2019 19:30:56 GMT
Noticed that my funds are not being reinvested despite set to reinvest at market rate. I was under the impression that funds would be reinvested at what ever the prevailing market rate was when they reached the top of the lender queue. However after querying why my funds failed to reinvest for almost 2 weeks, customer services tell me that 'my rate' is set at the time of the funds becoming available, so if the prevailing market rate is lower than my funds wont reinvest until the market rate rises again. In a falling market my funds will never get reinvested until I manually override the lending rate. That can't be right. Secondly, I have an increasing amount in my holding account but the rep couldn't explain why. Why would this happen if I have reinvest at market rate set? I'm not sure the guy at ratesetter knows what he's talking about so I'm asking here. Thanks
Market Rate is set once per day and is indicative of where the balance between supply and demand has been recently. It is not a rate at which you will definitely find a match. Lots of lender orders get created each day at the day's Market Rate, but there is no guarantee that all (or indeed any) of them will be matched, either that day, or ever. It depends on the demand from borrowers. The RS person is quite correct.
As for the increasing amount in your holding account, perhaps you have your settings such that capital is reinvested but interest not? Each repayment is partly capital and partly interest, and maybe it's the interest accumulating.
|
|
|
|
Post by bikeman on Oct 2, 2019 16:18:43 GMT
I'll try again.
I can clearly see that the account's reinvestment settings are reinvest both capital and interest at market rate.
However, I now have a large amount on market as nothing has been reinvested for over two weeks. The amount is increasing daily. Let me be clear NO NEW LOANS HAVE BEEN CREATED FOR OVER TWO WEEKS.
If I edit the amount on market it says 'your rate 5.5%' - clearly this is higher than the current market rate and would explain why nothings getting invested.
This is clearly at odds with the reinvestment settings.
|
|
johni
Member of DD Central
Posts: 365
Likes: 327
|
Post by johni on Oct 2, 2019 17:03:00 GMT
They don't want you to reinvest until the new rates kick in so set your rate at 5% and it will be filled. From next week this will be the going rate.
This change is solely about making Ratesetter a profitable company the existing model has failed. The new rates are lower than Zopa and Lending Works. The protection fund is being tweaked because they cannot keep the amount promised due to a lot higher default rates.
So lower rates more risk and a protection fund which in the forthcoming recession will struggle to have sufficient funds. If it comes in the next few months. The new model is higher risk for lower returns for investors.
|
|
|
|
Post by Deleted on Oct 2, 2019 17:03:10 GMT
Market Rate is currently 5.5% in the 5 year market. This is the average rate at which money has been lent over the previous 28 days.
There is currently £2.8m in the queue at 5.5% so presumably your money is somewhere in that £2.8m.
You can currently lend immediately at 5.3% and if you chose 5.4%, I suspect money would be lent within a day or so.
When RS changed the Market Rate to a 28-day average, it was inevitable that the Market Rate would be out of line at times with the interest rate for actual money being lent.
|
|
|
|
Post by bernythedolt on Oct 4, 2019 21:25:33 GMT
This change is solely about making Ratesetter a profitable company the existing model has failed. … The new model is higher risk for lower returns for investors. Agree, I've come to the same conclusion.
|
|
