SteveT
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Post by SteveT on Jan 16, 2016 21:28:37 GMT
Fair enough for 4 or 5 figure cash deposits, but promotional-rate current accounts and their ilk aren't much help for those with high 6 / 7 figure portfolios, which I suspect is where much of the money flooding into the QAA comes from. : I don't think the money "flooding into the QAA" is coming from "high 6 / 7 figure portfolios" because there's a £50k limit on direct QAA investment and a £25k limit on swept QAA investment. My point (not made very well, I fear) was that 3.75% looks very appealing to anyone used to spreading their deposits around in £75k chunks (formerly £85k chunks) at 1.5% - 2% in FSCS-backed accounts, even if they're only permitted a maximum of £50k direct and £25k swept from the Cash account. This is easily doubled, of course, by opening another account in a spouse's name.
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warn
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Curmudgeon
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Post by warn on Jan 17, 2016 9:10:54 GMT
Wait for it: Lender X: "Hey, you estimated £500 so I made £500 available and everyone else got £600 I'm angry chiz chiz ... transparency ... moan moan." Lender Y: "Hey, you estimated £500 so I made £500 available and only got £400 I'm angry snarl snarl ... conspiracy ... whine whine." I think this scenario could be easily dealt with by explaining to Mr X and Ms Y what the term 'estimated' means Dealt with, perhaps, but not avoided. And a month or so later, Chris'n'Co will no doubt be similarly upbraided by Lenders Z and Q.
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mj87
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Post by mj87 on Jan 17, 2016 18:48:09 GMT
I honestly can't believe people are willing to leave their money to the QAA for 3.75 while AC profits at 11%. I am completely dumbfounded.
If I was the business manager I could offer people 3.75 while a fill part of the loans coming up albeit offered at 9-10%. AC must be making a killing here!!!!
Everytime they increase the limit and some how people are still filling up.
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mikes1531
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Post by mikes1531 on Jan 17, 2016 18:57:39 GMT
I honestly can't believe people are willing to leave their money to the QAA for 3.75 while AC profits at 11%. I am completely dumbfounded. Isn't that what banks have been doing for years? There's always been a large 'spread' between what banks pay their savers and what they charge their borrowers.
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kermie
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Post by kermie on Jan 17, 2016 19:57:58 GMT
Er, yes - but I don't think the QAA is fully invested. Where to you think the quick access and provision fund come from? They don't come free. Oh, and there is this small thing called "overheads"...when you add all that together, I doubt AC make much profit at all on the QAA at this stage.
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mikes1531
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Post by mikes1531 on Jan 18, 2016 3:17:42 GMT
...when you add all that together, I doubt AC make much profit at all on the QAA at this stage. Perhaps it's not profitable now but -- as a hopefully soon to become AC shareholder -- I'm hoping the QAA turns into a real moneyspinner for them! 
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ben
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Post by ben on Jan 18, 2016 9:45:07 GMT
...when you add all that together, I doubt AC make much profit at all on the QAA at this stage. Perhaps it's not profitable now but -- as a hopefully soon to become AC shareholder -- I'm hoping the QAA turns into a real moneyspinner for them! I would guess once the set up costs, provision fund are sorted then it will become a money spinner for them.
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Post by chris on Jan 18, 2016 10:01:16 GMT
Perhaps it's not profitable now but -- as a hopefully soon to become AC shareholder -- I'm hoping the QAA turns into a real moneyspinner for them! I would guess once the set up costs, provision fund are sorted then it will become a money spinner for them. There's an ongoing cost to growing the provision fund in line with the account growth (which is stratospheric at the moment). Our margin is likely to remain broadly the same in the mid term although there is scope longer term (x years) to either make more margin or bring borrower prices down accordingly.
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mikes1531
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Post by mikes1531 on Jan 18, 2016 14:24:08 GMT
I would guess once the set up costs, provision fund are sorted then it will become a money spinner for them. There's an ongoing cost to growing the provision fund in line with the account growth (which is stratospheric at the moment). Our margin is likely to remain broadly the same in the mid term although there is scope longer term (x years) to either make more margin or bring borrower prices down accordingly. Gee. Here I was hoping for future dividends!
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mikes1531
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Post by mikes1531 on Jan 18, 2016 14:32:59 GMT
There's an ongoing cost to growing the provision fund in line with the account growth (which is stratospheric at the moment). : Considering how new the QAA is, and how fast it is growing, I'm impressed to see that its Provision Fund already stands at 1% of the total account value. Is that because AC have contributed some of their own funds to the PF in order to get it started? (As AC did, IIRC, when the GEIA was started.) Also, is the % in the PF that's shown on the page describing the QAA a 'live' number? If not, roughly how often is it updated?
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ben
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Post by ben on Jan 18, 2016 14:34:17 GMT
Would guess the provision fund would raise quickly to begin with as doubt would have any defaults at this early stage
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Post by chris on Jan 18, 2016 14:34:17 GMT
There's an ongoing cost to growing the provision fund in line with the account growth (which is stratospheric at the moment). : Considering how new the QAA is, and how fast it is growing, I'm impressed to see that its Provision Fund already stands at 1% of the total account value. Is that because AC have contributed some of their own funds to the PF in order to get it started? (As AC did, IIRC, when the GEIA was started.) Also, is the % in the PF that's shown on the page describing the QAA a 'live' number? If not, roughly how often is it updated? It's a live figure and we did put in some of our own funds, same with the GBBA.
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webwiz
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Post by webwiz on Jan 18, 2016 23:01:05 GMT
Let me get this straight. If I put £100 into the QAA about £30 will be loaned out at about 11-12% generating £3.75 interest and the other £70 or so will sit earning nothing but providing liquidity to other people?
Here's an idea. Why don't I just lend £30 and put the other £70 working somewhere else?
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ben
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Post by ben on Jan 18, 2016 23:04:45 GMT
Let me get this straight. If I put £100 into the QAA about £30 will be loaned out at about 11-12% generating £3.75 interest and the other £70 or so will sit earning nothing but providing liquidity to other people? Here's an idea. Why don't I just lend £30 and put the other £70 working somewhere else? I think the idea is to use it if you want easy access rather then putting it away for a year so the equivalent of the monthly market on ratesetter but instant instead of having to wait month
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kermie
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Post by kermie on Jan 18, 2016 23:11:51 GMT
Let me get this straight. If I put £100 into the QAA about £30 will be loaned out at about 11-12% generating £3.75 interest and the other £70 or so will sit earning nothing but providing liquidity to other people? Here's an idea. Why don't I just lend £30 and put the other £70 working somewhere else? I did chuckle. You'd use the QAA because with the QAA you ought to be able to get your full £100 out pronto, not just your 'non-loaned' £70. Usual caveat about "normal market conditions", etc...i.e. clearly this breaks down if there is a "run on the bank". In fact, I see this happening with my swept-funds all the time now - in/out/in/out with virtually no delay as my MLIA purchases stuff via swept-funds that were (a second ago) sitting in the QAA. At a new loan drawdown, my total swept-funds could be gobbled up by that new loan instantaneously. Edit: oh - and the provision fund is another reason. Another edit: it's important to realise that this model of your uninvested £70 provides liquidity not just to other people, but also to you. It's "socalised liquidity".
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