Post by c88dnf on Nov 19, 2014 17:31:19 GMT
I've recently made a significant investment in Wellesley's Savings Bonds to diversify my P2P portfolio. Others considering the Bonds should be aware of a few things which aren't immediately obvious. Please note that these comments ONLY apply to the BONDS. Wellesley's generic P2P offering has different terms.
1) Your money will not be invested/ start receiving interest for 14 days after funds are received by Wellesley. The overall interest rate on your investment is thus lower than the headline rate quoted (the first payment will be effectively 26/28ths of what you might expect). I compute that on my notional 5-year investment I'll receive 6.95%, not the advertised 7.0%. I can live with that, but you should compute the hit on other time periods and confirm it's acceptable to you before investing.
2) There is no automatic reinvestment (compounding) of interest. Each six-monthly payment either must be reinvested separately (presumably with its own 2-week delay in interest payment).
1) Your money will not be invested/ start receiving interest for 14 days after funds are received by Wellesley. The overall interest rate on your investment is thus lower than the headline rate quoted (the first payment will be effectively 26/28ths of what you might expect). I compute that on my notional 5-year investment I'll receive 6.95%, not the advertised 7.0%. I can live with that, but you should compute the hit on other time periods and confirm it's acceptable to you before investing.
2) There is no automatic reinvestment (compounding) of interest. Each six-monthly payment either must be reinvested separately (presumably with its own 2-week delay in interest payment).