star dust
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Post by star dust on Jun 26, 2015 17:16:59 GMT
Just received from RS "we are giving all our lenders the added incentive of cashback. We've also listened to your feedback following our last cashback offer. To help you organise your additional investment, we're giving you plenty of time. The offer starts on 1st July. Cashback offer: * Invest an additional £2,500 and earn £25 cashback * Invest an additional £5,000 and earn £50 cashback * Invest an additional £10,000 and earn £100 cashback What you need to know * This offer is limited to a two week period, so don't miss out * You need to commit the additional deposited funds for at least 1 year to benefit from this offer * Please remember that your returns are before tax, assumes you reinvest throughout the term and assumes coverage from the RateSetter Provision Fund now standing at over £14m * Capital is at risk and your money is not covered by the Financial Services Compensation scheme * Finally, we recommend reading all the offer details toward the end of the emai" Watch out for the tumbling rates - I'll keep my money locked up 'till August .
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pom
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Post by pom on Jun 26, 2015 17:47:41 GMT
So do you have to have received the email to benefit or does it apply to anyone?!?! Cos I've not had the email so not quite sure what their definition of "all our lenders" is Will be interesting to see what does happen to the rates (I wasn't planning on adding any more, but based on the rates I guess they may be a bit short of lenders at the moment)
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Investor
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Post by Investor on Jun 26, 2015 18:18:32 GMT
And the question again is what rates look like in the few days prior to the offer, and in two weeks time after the offer finishes. Given it is a one-off 1% cash back, it might make sense in the 1 yr market but I passed on the offer last time and cashed in on the 0.7% increase in the 5 YR MR once the offer finished. If memory serves there was also a significant drop in the rate in the last day of the offer as everyone offered lower rates to ensure they hit the total commitment. Remember if you only lend 9.5k by the cut off point, the last 4.5k has been lent out at the lower rate for no cashback value. Bit of a race to the bottom towards the end.
Pom, these offers have always been to ALL lenders as far as I can remember
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jonah
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Post by jonah on Jun 26, 2015 18:38:29 GMT
My email arrived 30 minutes ago... I would assume RS are working through their contact list.
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webwiz
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Post by webwiz on Jun 26, 2015 18:50:05 GMT
This offer is not going to tempt me. An extra 1% on 1 year still does not make it attractive compared to monthly, and a third and a fifth of a percent on the longer terms is almost insulting.
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Post by pepperpot on Jun 26, 2015 19:01:21 GMT
Wouldn't this be better in the 'are rates being manipulated down' thread? (email arrived at 6:05pm and landed in the spam folder - conveniently)
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star dust
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Post by star dust on Jun 26, 2015 19:19:47 GMT
Wouldn't this be better in the 'are rates being manipulated down' thread? (email arrived at 6:05pm and landed in the spam folder - conveniently) Well, yes, but I didn't want to upset westonkevRS too much .
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pom
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Post by pom on Jun 26, 2015 19:26:10 GMT
Finally got my email at 8:08 so don't feel like a 2nd class citizen....much!!
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Post by westonkevRS on Jun 26, 2015 21:20:05 GMT
I must admit I'm not a great fan of offers and cash-backs. I'd rather provide a consistent good product offering, I'm scared people will only shop with RateSetter when the sales are on!
That said, today me and a "colleague" from Finance were analysing the increased income from the cash back offer last time and it did provide a peak in money supply that was much higher than any cumulative reduction in lending thereafter. It requires some major assumptions because shifts in lending could have been a result of many things not least rates, pensioner bonds, national premium bond allowances, tax changes, competitor promotions, etc. However ignoring this noise it can be concluded that net more lenders are tempted by the offering than vice-versa, even if the more sophisticated lenders on this forum are not tempted.
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Post by duncandive on Jun 27, 2015 8:28:20 GMT
I should put my hand up to the fact that it was the 'Cashback' offer that brought me into RS as a new lender this year. Being 'NEW' and rather inexperienced (and unaware of this forum) I ended up with investments in the 5 year market of only 5.7% and 6.0%.. I now know better... and just have to live with my error On the Bright Side, at least I found RateSetter and am happy with how my reinvestments have been going of late
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pom
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Post by pom on Jun 27, 2015 9:30:58 GMT
Just trying to understand what might happen (being a newbie) and work out the small print.... so I think it's saying it has to be deposited, offered and matched all within the 2 weeks? So if it sits there the whole 2 weeks at too high a rate you get nothing.. and lose out on 2 weeks interest from elsewhere. But if you hold your nerve it *might* get lent out in the middle of the night (oh I think I just saw il moro's pig fly past...). And repayments will probably be a bit slow to reinvest if you stick with your normal rate...
Well I hadn't planned on putting any more into RS for a while as it's currently a lot bigger than my other p2p stuff... but I might experiment on the basis of nice bonus to get if everything else lines up, but with an expectation that I may be waiting for better rates after everyone's lent everything from behind their sofas to get the cashback and have run out...see what it looks like really.
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Post by reeknralf on Jun 27, 2015 10:23:30 GMT
...more lenders are tempted by the offering than vice-versa, even if the more sophisticated lenders on this forum are not tempted. I'm not sure how tempting the unsophisticated to invest at rates below what they might otherwise achieve sits with Ratesetter's wider business ethic. I only wish there were a way to short the market. I guess I could lend the day before the offer starts, and borrow it back the day before the offer closes. What's the spread on a ratesetter loan?
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Post by pepperpot on Jun 27, 2015 10:38:04 GMT
Just trying to understand what might happen (being a newbie) and work out the small print.... so I think it's saying it has to be deposited, offered and matched all within the 2 weeks? So if it sits there the whole 2 weeks at too high a rate you get nothing.. and lose out on 2 weeks interest from elsewhere. But if you hold your nerve it *might* get lent out in the middle of the night (oh I think I just saw il moro's pig fly past...). And repayments will probably be a bit slow to reinvest if you stick with your normal rate... Well I hadn't planned on putting any more into RS for a while as it's currently a lot bigger than my other p2p stuff... but I might experiment on the basis of nice bonus to get if everything else lines up, but with an expectation that I may be waiting for better rates after everyone's lent everything from behind their sofas to get the cashback and have run out...see what it looks like really. Your on the right track. The thing to bear in mind with the cash back is that over a 5yr term it equates to just over 0.2% uplift in your return (just over because you get it upfront and can re-invest it). Like for like figures for 3 & 1yr are 0.34% and 1%. So if you can get 6.7% now in 5yr, it works out better than 6.4% with 1% cashback... From the first cb offer earlier this year there was a swing of easily 0.5% in rates between the offer period and a few weeks after it, so it was better to hold out till the dust had settled. Not saying it will be exactly the same this time as there is different scenery (2 week offer instead of 1, and MR calculation has changed which I think will make rate spikes less likely) but chances are the cashback will at best be a zero sum game.
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Post by pepperpot on Jun 27, 2015 10:49:49 GMT
...more lenders are tempted by the offering than vice-versa, even if the more sophisticated lenders on this forum are not tempted. I'm not sure how tempting the unsophisticated to invest at rates below what they might otherwise achieve sits with Ratesetter's wider business ethic. I think RS, in regard to the quality of borrower and the strength of the provision fund, are less happy with rates in the mid to high 6%'s and would prefer 6% with 6.2% - 6.4% to be considered a spike. So the best (and therefore most ethical) thing for everyone lending through RS is to ensure the provision fund remains robust.
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spiral
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Post by spiral on Jun 27, 2015 10:53:24 GMT
I only wish there were a way to short the market. My plan is to 1. Borrow 1/4 mil and clear out all the rates up to around 10% 2. Place my money on market at 9.9% before anyone realises. 3. Get it matched at 9.9% 4. Cancel my loan during the cooling off period. 5. Get my cashback along with some money lent at 9.9% Now all I've got to do is get that 250K loan approved. Kev fancy going 50/50
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