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Post by gidoppp01 on May 26, 2017 11:35:25 GMT
I have only discovered the MINUS side of the Zopa. Regardless presafeguard / safeguard / plus, 100% withdrawal is a concern. I can't even withdraw 100% from safeguard, can someone tell me WHY? Only allow 95% withdrawal from Safeguard!!!! The problem is that the Safeguard fund does not kick in until there are 4 missed payments. Once this does happen your total investment in the loan is repaid immediately. I think that you will need to keep requesting sell outs for a while to get completely as borrowers could miss a payment and then make a payment, etc. If this is the way how Safeguard works, it is a gimmick by Zopa. Not allowing 100% withdrawal and pretend to offer investors a safe net.
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Post by wyndstryke on May 30, 2017 17:50:32 GMT
If this is the way how Safeguard works, it is a gimmick by Zopa. Not allowing 100% withdrawal and pretend to offer investors a safe net. This is why I've always thought that the main purpose of SafeGuard was to solve the pre-2015 tax problem, not anything to do with providing a safety net. The amount in the fund is too small to offer any actual protection in the event of a major recession / bank crisis. I never understood why the fund was still offered after the tax rules were changed in 2015, it was pointless after that time. Regarding liquidity - ZOPA has never been a particularly liquid investment. When I started you could not sell off loans at all (Rapid Return was only introduced a few years ago). The most liquid option they have is the Access product, but even that is only liquid up to a point. Prior to Access, you pretty much needed to keep your money in for a couple of years unless you want to get burned with the exit fee. My way of dealing with it was to turn off re-investment, and then harvest the money from the holding account as it returns. Sure it takes a couple of years to get the majority of your money back that way, but it's fee-free. Don't get me wrong - I like ZOPA (particularly when compared to what is effectively a 0% rate from my own bank), and I'm going to be picking up their ISA, but compared to a bank savings account, the risk is higher and the liquidity is lower. The Risk/Reward balance is worth it IMO, but you have to go into it with your eyes open.
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