ikorodu
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Post by ikorodu on Nov 9, 2015 21:14:02 GMT
I know that today's market rate is set using a weighted average of yesterday's transactions. And that you can see the rates on the rate setter info page of the site.
Is there a reason that these market rates are not more prominently displayed on the actual lending page?
Eg just a line to say 'today's market rate based on yesterday's lending is xx%'
I think this would help non experts to have a better understanding of the rate to lend at now figures.
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Post by westonkevRS on Nov 9, 2015 21:37:08 GMT
Perhaps, but the Market Rate is really yesterday's news. Attainable rates today could be lower or higher and RateSetter have to avoid providing advice that could result in monies not being matched. Dead money time when lenders thought their money would be matched seems to bug the complainers more than sub-optimal rates. The rate shown on the lending page is the rate truly attainable at that precise moment.
The full history of Market Rates including today's on yesterday's trades are shown in the statistics page.
Kevin
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sl75
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Post by sl75 on Nov 10, 2015 9:56:02 GMT
Perhaps, but the Market Rate is really yesterday's news. Attainable rates today could be lower or higher and RateSetter have to avoid providing advice that could result in monies not being matched. Dead money time when lenders thought their money would be matched seems to bug the complainers more than sub-optimal rates. The rate shown on the lending page is the rate truly attainable at that precise moment. ... except when it isn't (because there are no unmatched borrower requests), at which point it reverts to a rate that RateSetter have made up by some other mechanism, which could be undercut by an "expert" before any borrower requests materialise. For re-investment, RS allow users simply to take "the market rate", so it seems bizarre that the same option is not available for fresh funds, and unreasonable to expect anyone except a "ratesetter expert" to realise that they're lending at anything other than the market rate when taking "the rate to lend right now" (which can reasonably be interpreted as a casual way of saying "the market rate, which we recommend you use right now").
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ikorodu
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Post by ikorodu on Nov 10, 2015 10:14:48 GMT
That's was my point really. For the non-experts it would give them at least some recent pint of reference, so that they could gauge whether the 'rate to lend at right now' is reasonable or not.
Also given the RS aspiration that the market rate could become a rate for many purposes, its odd that the rate is not more viable to lenders.
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Post by westonkevRS on Nov 17, 2015 22:13:59 GMT
Quite a large P2P article in the FT's weekend edition. Rhydian is quoted talking about his expectation for rates to eventually: Is Banking about to be Uberised?www.ft.com/cms/s/2/cbba1ff2-65cf-11e5-a28b-50226830d644.html#axzz3rmyAQ16SRhydian Lewis, co-founder and chief executive of Ratesetter, says that as the P2P model proves itself, its cost of funding should fall, allowing the platforms to offer loans at even lower rates to less-risky borrowers. “If people start pricing us as a safe place then we will become much more competitive”
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oik
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Post by oik on Nov 18, 2015 12:02:54 GMT
Quite a large P2P article in the FT's weekend edition. Rhydian is quoted talking about his expectation for rates to eventually: Is Banking about to be Uberised?www.ft.com/cms/s/2/cbba1ff2-65cf-11e5-a28b-50226830d644.html#axzz3rmyAQ16SRhydian Lewis, co-founder and chief executive of Ratesetter, says that as the P2P model proves itself, its cost of funding should fall, allowing the platforms to offer loans at even lower rates to less-risky borrowers. “If people start pricing us as a safe place then we will become much more competitive” Is that an expectation or a hope? It seems to me that many small savers are already pricing returns from some P2P lenders as if they were without risk. Come the next financial crisis and the inevitable shakeout there could be tears - with few outfits uneffected by the reputational damage. I'd like to see Lewis working to ensure that less sophisticated savers are more fully aware of the risks; rather than instead trying to make his business more competitive by lobbying to increase the risks to small savers who prefer to use conventional savings accounts. Rhydan Lewis: "In my view, we should abolish the FSCS for savings accounts entirely." ( From article by Lewis for City AM) No surprise there then.
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pikestaff
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Post by pikestaff on Nov 20, 2015 9:40:46 GMT
In principle he's absolutely right. The effect of the FSCS is to encourage depositors to place their money with the riskiest banks, because they know they will be bailed out. I've had term deposits with loads of fringe banks (though not so much recently). Without the FSCS I would not have touched them with a bargepole. I started using p2p when I could no longer get 4% for 4 year money even at a fringe bank. As my deposits mature I've been switching them into p2p and other alternative investments.
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oik
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Post by oik on Nov 21, 2015 13:09:35 GMT
In principle he's absolutely right. The effect of the FSCS is to encourage depositors to place their money with the riskiest banks, because they know they will be bailed out. I've had term deposits with loads of fringe banks (though not so much recently). Without the FSCS I would not have touched them with a bargepole. What the FSCS also does is to protect smaller and less sophisticated savers from losing their life savings, most of whom have very little abilitity to assess how risky a bank or BS (or Ratesetter) might be. How many would have been aware, for example, of the risk before HBOS collapsed when it wasn't apparent to KPMG, their auditors. Nor is the FSCS a "state guarantee" as per the headline of the Lewis article: it's funded by the industry, not by the state. I would prefer to see Lewis trying to challenge the competition by making his own offering more attractive and certainly more transparent, not by lobbying to have his competitors made less attractive at the cost of smaller savers. Most importantly, savers should have choice: banks and building societies where small savers are fully protected as well as outfits like Ratesetter where your capital is at risk but which may give a better return. Choice shouldn't be limited just to help Lewis drive down the rates he has to pay and expand his business. I started using p2p when I could no longer get 4% for 4 year money even at a fringe bank. As my deposits mature I've been switching them into p2p and other alternative investments. On how much? You can still get 4%-5% with instant access from current accounts. I have a six figure sum in current accounts at between 3%-5% with an average rate of just under 4%. Unlike with Ratesetter I have instant access whenever I want it; I know my money won't be retained for far longer than the specified time (as allowed in Ratesetter's contract); nor will my money be thrown back to me before the specified time when they decide to do so. The likes of Ratesetter suits me temporarliy while I have a lot of cash waiting to be reinvested in markets. I wouldn't use it if I could squeeze still more cash into interest-paying current accounts and nor would I see it as a sensible alternative for most small savers who can get similar or better rates elsewhere without requiring better financial skills than KPMG.
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alender
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Post by alender on Nov 21, 2015 16:05:04 GMT
Please can you share how you managed to do so well using accounts which are FSCS protected. This protection, as you say is paid for by the Banks (which reduces interest returns) as part of the Banking Licence (fees/insurance paid to the Government) not by the Government as is often quoted.
As a single person I have opened the following:-
Santander 123, 1 account, £20,000 at 3%, some charges but more than covered by cash back BOS Vantage, 3 accounts £5,000 each at 3%, no charges Tesco, 2 accounts, £3000 each at 3%, no charges TSB Current classic 1 account, £2000 at 5%, no charges
I have to move money into the Santander, TSB and BOS accounts each month but this is set up so it is automatic.
I have not bothered with the Lloyds account as it requires 2 direct debits per month (already get cash back from Santander for direct debits) or the Nationwide which only has high interest for 1 year. Do you know of any more?
Like you I use P2P with caution and know there are risks but as I now do not have any salary I can only use interest paying investments to use up my zero rate personal tax allowance. The main part of my income is from company dividends but these cannot be used for the zero rate personal tax allowance and will soon incur an additional tax of 7.5% after the first £5000 up to 40% tax level which then substantially increases after this level.
There is of cause the additional danger if you Ratesetter Monthly product you could be stuck in for up to 24 months at monthly levels of interest.
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pikestaff
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Post by pikestaff on Nov 21, 2015 16:08:39 GMT
In principle he's absolutely right. The effect of the FSCS is to encourage depositors to place their money with the riskiest banks, because they know they will be bailed out. I've had term deposits with loads of fringe banks (though not so much recently). Without the FSCS I would not have touched them with a bargepole. What the FSCS also does is to protect smaller and less sophisticated savers from losing their life savings, most of whom have very little abilitity to assess how risky a bank or BS (or Ratesetter) might be. How many would have been aware, for example, of the risk before HBOS collapsed when it wasn't apparent to KPMG, their auditors. Nor is the FSCS a "state guarantee" as per the headline of the Lewis article: it's funded by the industry, not by the state. I would prefer to see Lewis trying to challenge the competition by making his own offering more attractive and certainly more transparent, not by lobbying to have his competitors made less attractive at the cost of smaller savers. Most importantly, savers should have choice: banks and building societies where small savers are fully protected as well as outfits like Ratesetter where your capital is at risk but which may give a better return. Choice shouldn't be limited just to help Lewis drive down the rates he has to pay and expand his business. I started using p2p when I could no longer get 4% for 4 year money even at a fringe bank. As my deposits mature I've been switching them into p2p and other alternative investments. On how much? You can still get 4%-5% with instant access from current accounts. I have a six figure sum in current accounts at between 3%-5% with an average rate of just under 4%. Unlike with Ratesetter I have instant access whenever I want it; I know my money won't be retained for far longer than the specified time (as allowed in Ratesetter's contract); nor will my money be thrown back to me before the specified time when they decide to do so. The likes of Ratesetter suits me temporarliy while I have a lot of cash waiting to be reinvested in markets. I wouldn't use it if I could squeeze still more cash into interest-paying current accounts and nor would I see it as a sensible alternative for most small savers who can get similar or better rates elsewhere without requiring better financial skills than KPMG. Rydian's motives are one thing, the principle another. In truth, I concede the social policy justification for a guarantee but I do think it is set too high. As regards industry funding, at the end of the day that means funding by you and me (just as it would be if funded by the govt). It's not cost free. The sums I was talking about were too big for the current account game. I agree that for 5 figure amounts the current account game is worthwhile if you want to play it - although in playing it you are being subsidised by the very people you want to protect. 6 figures sounds like a stretch even if it's for a couple.
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agent69
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Post by agent69 on Nov 21, 2015 17:13:05 GMT
Please can you share how you managed to do so well using accounts which are FSCS protected. There are lots of posts on the MSE site from people claiming to get equally impressive looking returns from bank / building society accounts. I've never really got the numbers to add up unless you have a shed load of regular saving accounts, which take a lot of effort to maintain. Getting an average of nearly 4% on an investment range of 3 - 5% suggests there must be a lot invested at 4 -5% and I don't see an easy way to achieve this.
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jonah
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Post by jonah on Nov 21, 2015 20:38:44 GMT
Please can you share how you managed to do so well using accounts which are FSCS protected. There are lots of posts on the MSE site from people claiming to get equally impressive looking returns from bank / building society accounts. I've never really got the numbers to add up unless you have a shed load of regular saving accounts, which take a lot of effort to maintain. Getting an average of nearly 4% on an investment range of 3 - 5% suggests there must be a lot invested at 4 -5% and I don't see an easy way to achieve this. The 4% lloyds account is easier than you think if you already have tesco current accounts. Just open their instant and Internet savers. Both allow direct debits to take money monthly and lloyds accepts them. Using regular savers can be easy... The tsb 5% for example just takes a standing order from the tsb current account. If you schedule it for the same day as the 'feeder' standing orders and tweak the numbers there isn't any more effort needed. The same can be done with lloyds. The 6% regular savers do require either more effort or having some cash sitting at zero interest for a day or two. That said, getting to above 4% average with current accounts isn't something I've managed but well over 3% is doable.
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oik
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Post by oik on Nov 22, 2015 16:29:04 GMT
Please can you share how you managed to do so well using accounts which are FSCS protected. This protection, as you say is paid for by the Banks (which reduces interest returns) as part of the Banking Licence (fees/insurance paid to the Government) not by the Government as is often quoted. As a single person I have opened the following:- Santander 123, 1 account, £20,000 at 3%, some charges but more than covered by cash back BOS Vantage, 3 accounts £5,000 each at 3%, no charges Tesco, 2 accounts, £3000 each at 3%, no charges TSB Current classic 1 account, £2000 at 5%, no charges I have not bothered with the Lloyds account as it requires 2 direct debits per month (already get cash back from Santander for direct debits) or the Nationwide which only has high interest for 1 year. Do you know of any more? I'm married so able to open accounts in both our names and jointly. As of today, I'm holding exactly £145k in those current accounts. As you already have BOS accounts you may as well open a Halifax Reward which would appear alongside your other accounts when you login to BOS and would pay you another £60 pa net of tax (per account but I think you're only allowed to open one now). Halifax also pay a £100 for switching. The Nationwide FD pays 5% for only for a year (1% thereafter) but useful enough if you can be bothered. It also pays £100+£100 with it's 'Recommend a friend' switching bonus and when no longer required can be used to obtain switching bonuses elewhere. A year after closing you can open another at 5%. As already mentioned, if you don't have enough DDs then just set them up to pay into suitable savings accounts (can come straight back out again) or to make donations to worthwhile charities. With a Tesco savings account you can set up as many as you want and opening Birmingham Midshires savings accounts requires setting up a DD with a current account. There are far fewer worthwhile regular saver accounts now that I'm aware of, though many still seem to love them, but if you already have TSB and Lloyds accounts you might as well have their saver accounts if you want to hold more cash; they pay 4.00% and 5.00% and can be renewed as soon as they reach expiry. You'll probably get more ideas in the bank account or savings forums on MSE. Obviously, the smaller the sum the easier it is to get close to 5.00% or more overall. In truth, I concede the social policy justification for a guarantee but I do think it is set too high. As regards industry funding, at the end of the day that means funding by you and me (just as it would be if funded by the govt). It's not cost free. The sums I was talking about were too big for the current account game. I agree that for 5 figure amounts the current account game is worthwhile if you want to play it - although in playing it you are being subsidised by the very people you want to protect. 6 figures sounds like a stretch even if it's for a couple. So what would you judge to be the correct figure and how do you arrive at it? The FSCS figure comes under the European Union Deposit Guarantee Schemes Directive. That requires the limit to be harmonised at €100,000 throughout Europe which is why the current £85k drops to £75k on 1 Jan 2016 as a result of exchange rate movements. The FSCS is independent both of the government and of the finance industry and was set up under the Financial Services and Markets Act funded by an industry levy.
No it is not cost free but the costs are contained within the interest rate paid - just as the various costs to Ratesetter, such as for their 'Refer a Friend' offers in order to push rates to lenders down, are within the rate they offer. AFAIA all the banks I use are net contributors to the FSCS so I'm not too sure who you think is subsidising whom or whom you think I want to protect. Those who are effectively 'subsidised' through the FSCS are those who put money into banks or covered investments that later fail and I have never put money into such a bank (including the Icelandic banks, not covered by FSCS, that I avoided and recomended others to do the same). Nor have I ever needed compensation from the FSCS. The people who do subsidise the rate I receive I'm afraid are other savers with the banks I use who accept paltry rates from standard savings accounts and cash ISAs or who go overdrawn. I have no sympathy for those who are too lazy to sort out their finances but do sympathise with those who aren't well enough informed or have been led to believe that getting a better rate is difficult. Those who 'subsidise' me at Ratesetter are those who borrow at an excessive rate. Above all I would like to see greater transparency, both from the banks and from the likes of Ratesetter, but I don't see how my lending to banks at a lower rate would help in that.
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alender
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Post by alender on Nov 23, 2015 12:47:42 GMT
Thanks for the info Oik, it is very useful and I will follow this up. When I looked on a banks Website to set up DDs to one of my other accounts I could not see how to do this. I phoned a bank for advice and they said that they can only go to companies. I am not sure about this but it sounds as you have managed to get these set up.
I agree with you about the subsidies, if people are too lazy to shop around and they get low rates if anything it is their choice/fault, not the fault of someone who managed to get better rates. If there are any subsidies it is savers subsidising the banks, government and borrowers at a low or zero interest rates for a long time now.
For the banks I think you get enough information to make a decision, you may not get what you want but it is what was sold to you. If I invest in the Money Markets I know the rate is set purely by market forces (except Government intervention) and any attempt to influence rates is illegal. For Ratesetter it has taken me a time to put together how the rate is set and I am still not fully sure how it is done, it seems to be Ratesetter agreeing a rate with a borrower and then using the various lenders offers from 1 month to 5 years in order to achieve the desired rate. I believe I saw Kevin write that the borrows money on offer you see on the Website are for approved loans but waiting the final paper work and are placed there to give the impression of a market. If I am right about this I do not consider this a market and certainly not a free market but other people will have different opinions. I may well be wrong but it is hard and time consuming to get to the full facts of how rates are set, more transparency is needed.
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Post by p2plender on Nov 25, 2015 14:40:35 GMT
Last Matched Rates
MONTHLY
3.7% at 14:29
1 YEAR
9.7% at 14:27
3 YEAR INCOME
4.6% at 14:12
5 YEAR INCOME
6.1% at 14:33
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