zlb
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Post by zlb on Sept 12, 2018 17:11:00 GMT
GS say 5.3% assumes year invested. Does that mean that on 30 days, people are getting a good % without a year invested?
Same LW are people getting 6% even though not invested for full term?
I thought OC was that you're directly invested in the loans, so it could go wrong in different way to AC access accounts.
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ceejay
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Post by ceejay on Sept 12, 2018 17:17:35 GMT
GS say 5.3% assumes year invested. Does that mean that on 30 days, people are getting a good % without a year invested? ... What GS mean is that if your money were lent out every day of the year, you'd get 5.3%. In practice it isn't, because every 30 days your money comes back and joins a queue to be reinvested, which might take a day or two (has been up to five a little while ago). On average, I think you are looking at 5.1 to 5.2% at the moment, which seems fair to me, especially for an account with minimal lock-in.
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zlb
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Post by zlb on Sept 12, 2018 17:22:29 GMT
GS say 5.3% assumes year invested. Does that mean that on 30 days, people are getting a good % without a year invested? ... What GS mean is that if your money were lent out every day of the year, you'd get 5.3%. In practice it isn't, because every 30 days your money comes back and joins a queue to be reinvested, which might take a day or two (has been up to five a little while ago). On average, I think you are looking at 5.1 to 5.2% at the moment, which seems fair to me, especially for an account with minimal lock-in. thanks...
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Post by Ace on Sept 12, 2018 18:24:18 GMT
... Same LW are people getting 6% even though not invested for full term? ... In LW the 6% is for 5 year investments, though most of my loans are actually either 4 or 5 years, so cash drag isn't much of an issue. Having said that, the vast majority of their loans are amortized, so some capital is returned each month. These can suffer some cash drag, but as the amortization is over 4 or 5 years the amount of capital returned each month is relatively small, so a few days of cash drag on these small amounts doesn't greatly effect the overall rate. As with most platforms, there is also the possibility of early repayment which can introduce cash drag, though this hasn't been a significant issue for me yet.
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Post by df on Sept 12, 2018 18:44:51 GMT
I'm not aware of any communication from TSB to say it's limited to a year, but as with all the other interest paying current accounts they could change it any time, the BoS rate seems to go down every year! I'm sure I read that at the time but so far have only found a leaning towards it in the Sun .. The Sun  I'm sure it is available to new customers, this is why they reintroduced 5% on current account - to get more customers. The rate can of course change at any time. Could it be a mix up with N-wide, they pay 5% on 5k for a year and then it drops to 1%.
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Post by df on Sept 12, 2018 19:20:05 GMT
GS say 5.3% assumes year invested. Does that mean that on 30 days, people are getting a good % without a year invested? ... What GS mean is that if your money were lent out every day of the year, you'd get 5.3%. In practice it isn't, because every 30 days your money comes back and joins a queue to be reinvested, which might take a day or two (has been up to five a little while ago). On average, I think you are looking at 5.1 to 5.2% at the moment, which seems fair to me, especially for an account with minimal lock-in. All my loans are 5.18%, this probably amounts to 5.3 with compound interest and after cash drag 5.1-5.2% is what we earn. I'm glad GS stopped 2-rate system, the rate is staying stable since then - I prefer some consistency, particularly with lower rate accounts.
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Post by df on Sept 12, 2018 19:43:06 GMT
... Same LW are people getting 6% even though not invested for full term? ... In LW the 6% is for 5 year investments, though most of my loans are actually either 4 or 5 years, so cash drag isn't much of an issue. Having said that, the vast majority of their loans are amortized, so some capital is returned each month. These can suffer some cash drag, but as the amortization is over 4 or 5 years the amount of capital returned each month is relatively small, so a few days of cash drag on these small amounts doesn't greatly effect the overall rate. As with most platforms, there is also the possibility of early repayment which can introduce cash drag, though this hasn't been a significant issue for me yet. No issues with cash drag for me on LW. All my initial investments were matched in 4-6 days and after that I didn't notice any delays in reinvestments. Less cash drag comparing to GS. I think if your LW investment is well diversified you shouldn't experience any additional cash drag from early repayments.
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zlb
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Post by zlb on Sept 12, 2018 20:06:07 GMT
... Same LW are people getting 6% even though not invested for full term? ... In LW the 6% is for 5 year investments, though most of my loans are actually either 4 or 5 years, so cash drag isn't much of an issue. Having said that, the vast majority of their loans are amortized, so some capital is returned each month. These can suffer some cash drag, but as the amortization is over 4 or 5 years the amount of capital returned each month is relatively small, so a few days of cash drag on these small amounts doesn't greatly effect the overall rate. As with most platforms, there is also the possibility of early repayment which can introduce cash drag, though this hasn't been a significant issue for me yet. thanks. So, you're referring to the amortising element and not reinvesting in order to gain access to your cash relatively quickly? I've not used them because of the possibility of wanting to withdraw sooner than term.
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Post by Ace on Sept 12, 2018 20:38:48 GMT
In LW the 6% is for 5 year investments, though most of my loans are actually either 4 or 5 years, so cash drag isn't much of an issue. Having said that, the vast majority of their loans are amortized, so some capital is returned each month. These can suffer some cash drag, but as the amortization is over 4 or 5 years the amount of capital returned each month is relatively small, so a few days of cash drag on these small amounts doesn't greatly effect the overall rate. As with most platforms, there is also the possibility of early repayment which can introduce cash drag, though this hasn't been a significant issue for me yet. thanks. So, you're referring to the amortising element and not reinvesting in order to gain access to your cash relatively quickly? I've not used them because of the possibility of wanting to withdraw sooner than term. Yes, I was referring to the amortized capital repayments, but the same applies to the payed interest. To be clear, I'm saying that cash drag does exist, but it drags on such small sums as to be virtually insignificant for me. I wouldn't personally be concerned about getting hold of my cash in a hurry. The 0.6% fee for access seems very reasonable to me. It equates to a little over 1 months interest on the capital accessed, which is pretty good on a 5 year investment. There seems to be a large enough queue of investor funds to make immediate access to my meagre capital highly likely. Also, as I've said before, fee free access to my funds can be achieved at the rate of a little over 2% per month by turning reinvestment off. This consists of a little over 1.5% of the capital invested per month due to amortization, and roughly 0.5% interest. This is also occasionally increased by early capital repayments, which can be of any size.
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littleoldlady
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Running down all platforms due to age
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Post by littleoldlady on Sept 13, 2018 7:21:33 GMT
It's not completely set up and forget. You have to log on regularly (though not frequently.) I forget how often and also what happens if you don't. so you do a dd out of the account, which you pay straight back which then counts as the monthly payment? I had problems navigating this for santander. Do you use a basic no strings current account for this? I use SOs not DDs. I do the transfer in on one day and the transfer out the following day, but it might work doing them both on the same day if your cash flow is tight. To and from my main bank account which should always have >£500 in it so the balance just dips by £500 for a day.
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zlb
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Post by zlb on Sept 13, 2018 8:01:04 GMT
thanks. So, you're referring to the amortising element and not reinvesting in order to gain access to your cash relatively quickly? I've not used them because of the possibility of wanting to withdraw sooner than term. Yes, I was referring to the amortized capital repayments, but the same applies to the payed interest. To be clear, I'm saying that cash drag does exist, but it drags on such small sums as to be virtually insignificant for me. I wouldn't personally be concerned about getting hold of my cash in a hurry. The 0.6% fee for access seems very reasonable to me. It equates to a little over 1 months interest on the capital accessed, which is pretty good on a 5 year investment. There seems to be a large enough queue of investor funds to make immediate access to my meagre capital highly likely. Also, as I've said before, fee free access to my funds can be achieved at the rate of a little over 2% per month by turning reinvestment off. This consists of a little over 1.5% of the capital invested per month due to amortization, and roughly 0.5% interest. This is also occasionally increased by early capital repayments, which can be of any size. thanks. I turn off reinvesting in Z (aware of other differences including higher sale fee - wonder why), it sounds like LW despite the longer term names, can operate differently.
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I'm sure it is available to new customers, this is why they reintroduced 5% on current account - to get more customers. The rate can of course change at any time. Could it be a mix up with N-wide, they pay 5% on 5k for a year and then it drops to 1%.