Nomad
Member of DD Central
Posts: 755 
Likes: 513
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Post by Nomad on Sept 25, 2019 9:36:17 GMT
Al Rayan is offering instant access at expected rate of 1.6%, paid monthly. Does anyone have experience of their products and their meeting the expected rate? They have unprecedented demand for this account... Signing up was a hassle; I gave up...
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benaj
Member of DD Central
N/A
Posts: 5,619
Likes: 1,741
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Post by benaj on Sept 25, 2019 13:53:59 GMT
Al Rayan is offering instant access at expected rate of 1.6%, paid monthly. Does anyone have experience of their products and their meeting the expected rate? They have unprecedented demand for this account... Signing up was a hassle; I gave up... Speaking of simplicity, opening a FCA regulated p2p account is usually quick and easy. Banks have very different approach. Most banks have very strict procedures and it's an nightmare to book an appointment for account application.
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Post by moonraker on Sept 26, 2019 15:58:49 GMT
Al Rayan is offering instant access at expected rate of 1.6%, paid monthly. Does anyone have experience of their products and their meeting the expected rate? They have unprecedented demand for this account... Pleasant and efficient, I've had no problems in opening a deposit account and re-investing matured funds, but see
(The bank in question was Al Rayan.)
Moonraker
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Godanubis
Member of DD Central
Anubis is known as the god of death and is the oldest and most popular of ancient Egyptian deities.
Posts: 2,011
Likes: 1,013
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Post by Godanubis on Sept 26, 2019 17:25:22 GMT
This Bank of Scotland Current account... Good for <£4000 investor 7.18% AER well within £1000 tax allowance
Your Interest Rates
Any balance up to £5000.00 will earn the interest rate in the table below subject to account conditions. No additional interest will be paid on any balance over £5000.00.
Balances of AER% Gross p.a.%
£5,000.00+ 0.00 0.00
£4,000.00+ 3.90 3.83
£1.00+ 7.18 6.95
To get interest paid each month, all you need to do is:
• Stay in credit during the month.
• Pay in at least £1,000.00, for example your salary, each month.
• Have at least two different direct debits paid from your account during the calendar month.
AER is the Annual Equivalent Rate and illustrates what the interest rate would be if interest was paid and compounded once each year.
From 6th April 2016 your non ISA interest is paid gross, this means that we will not deduct tax automatically from your interest. Depending on your personal circumstances tax may be due on the interest and it is your responsibility to disclose and pay any tax due directly to HM Revenue and Customs (HMRC).
We will give you at least 14 days notice before we take any Overdraft fees or interest out of your account. Interest rates and fees are detailed as at the date of this statement.
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zlb
Member of DD Central
Posts: 1,422
Likes: 333
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Post by zlb on Sept 26, 2019 18:19:53 GMT
Al Rayan is offering instant access at expected rate of 1.6%, paid monthly. Does anyone have experience of their products and their meeting the expected rate? They have unprecedented demand for this account... Pleasant and efficient, I've had no problems in opening a deposit account and re-investing matured funds, but see
(The bank in question was Al Rayan.)
Moonraker
oh yes I remember that question from elsewhere. Unnerving. Anyone know how long a bank is allowed to keep your data on record after leaving the bank?
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zlb
Member of DD Central
Posts: 1,422
Likes: 333
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Post by zlb on Sept 26, 2019 18:24:30 GMT
I'm generally getting the impression, on reading, that there are funds which offer dividends which appear to match the income offered by e.g. Zopa. Why do people not just invest in a fund designed for income, instead of say, growth street? If it's a managed fund, can it's price deteriorate that badly?
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stevio
Member of DD Central
Posts: 2,065
Likes: 894
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Post by stevio on Sept 26, 2019 18:42:18 GMT
This Bank of Scotland Current account... Good for <£4000 investor 7.18% AER well within £1000 tax allowance
Your Interest Rates
Any balance up to £5000.00 will earn the interest rate in the table below subject to account conditions. No additional interest will be paid on any balance over £5000.00.
Balances of AER% Gross p.a.%
£5,000.00+ 0.00 0.00
£4,000.00+ 3.90 3.83
£1.00+ 7.18 6.95
To get interest paid each month, all you need to do is:
• Stay in credit during the month.
• Pay in at least £1,000.00, for example your salary, each month.
• Have at least two different direct debits paid from your account during the calendar month.
AER is the Annual Equivalent Rate and illustrates what the interest rate would be if interest was paid and compounded once each year.
From 6th April 2016 your non ISA interest is paid gross, this means that we will not deduct tax automatically from your interest. Depending on your personal circumstances tax may be due on the interest and it is your responsibility to disclose and pay any tax due directly to HM Revenue and Customs (HMRC).
We will give you at least 14 days notice before we take any Overdraft fees or interest out of your account. Interest rates and fees are detailed as at the date of this statement.
Back in 1983?
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r00lish67
Member of DD Central
Posts: 2,692
Likes: 4,048
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Post by r00lish67 on Sept 26, 2019 18:57:20 GMT
I'm generally getting the impression, on reading, that there are funds which offer dividends which appear to match the income offered by e.g. Zopa. Why do people not just invest in a fund designed for income, instead of say, growth street? If it's a managed fund, can it's price deteriorate that badly? One of my early forays went along this line of thinking. I invested in the Vanguard High dividend yield fund, which in the last 5 years has been roundly trounced by all of its non-income focused equivalents. OK, not a disaster, but nowhere near as good as VWRL for example either. In my limited understanding, because: 1) Dividends can be cut. 2) Your high yield dividends may not compensate for the loss of capital growth you experience relative to other firms which pay lower dividends and are growing more quickly. Of course there's nothing to say you won't do well buying such firms/funds, but equally nothing to say conclusively that they'll do any better.. I.e. guess what, yet again, no free lunch in investing 
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corto
Member of DD Central
one-syllabistic
Posts: 851
Likes: 356
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Post by corto on Sept 26, 2019 19:06:13 GMT
It's also because dividends have to go out of the found to go back in again.
That incurs various costs (management, exchange, other fees)
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zlb
Member of DD Central
Posts: 1,422
Likes: 333
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Post by zlb on Sept 26, 2019 21:14:56 GMT
I'm generally getting the impression, on reading, that there are funds which offer dividends which appear to match the income offered by e.g. Zopa. Why do people not just invest in a fund designed for income, instead of say, growth street? If it's a managed fund, can it's price deteriorate that badly? One of my early forays went along this line of thinking. I invested in the Vanguard High dividend yield fund, which in the last 5 years has been roundly trounced by all of its non-income focused equivalents. OK, not a disaster, but nowhere near as good as VWRL for example either. In my limited understanding, because: 1) Dividends can be cut. 2) Your high yield dividends may not compensate for the loss of capital growth you experience relative to other firms which pay lower dividends and are growing more quickly. Of course there's nothing to say you won't do well buying such firms/funds, but equally nothing to say conclusively that they'll do any better.. I.e. guess what, yet again, no free lunch in investing so high dividends yield funds are designed for relatively immediate income like the vanguard one you mention, but capital growth doesn't occur with p2p either... Has it been trounced by non-income focussed equivalents in dividends or growth (had you decided to sell at that point)? So "other firms which are growing more quickly" (and deliver growth which out performs dividends) would be packed into a passive product, do you mean? (I'm not under the impression that I can beat the market at all, except temporarily and I haven't got the time for that). My thinking is around risk, as you say, there's no guarantee that funds will grow, but if p2p platform fails, there's no recovery potential. Whereas if a broad and well managed passive fund struggles, there's the option for it to be recalibrated and pick up again eventually?? P2p platform will not eventually recover....
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r00lish67
Member of DD Central
Posts: 2,692
Likes: 4,048
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Post by r00lish67 on Sept 26, 2019 21:27:53 GMT
One of my early forays went along this line of thinking. I invested in the Vanguard High dividend yield fund, which in the last 5 years has been roundly trounced by all of its non-income focused equivalents. OK, not a disaster, but nowhere near as good as VWRL for example either. In my limited understanding, because: 1) Dividends can be cut. 2) Your high yield dividends may not compensate for the loss of capital growth you experience relative to other firms which pay lower dividends and are growing more quickly. Of course there's nothing to say you won't do well buying such firms/funds, but equally nothing to say conclusively that they'll do any better.. I.e. guess what, yet again, no free lunch in investing so high dividends yield funds are designed for relatively immediate income like the vanguard one you mention, but capital growth doesn't occur with p2p either... Has it been trounced by non-income focussed equivalents in dividends or growth (had you decided to sell at that point)? So "other firms which are growing more quickly" (and deliver growth which out performs dividends) would be packed into a passive product, do you mean? (I'm not under the impression that I can beat the market at all, except temporarily and I haven't got the time for that). My thinking is around risk, as you say, there's no guarantee that funds will grow, but if p2p platform fails, there's no recovery potential. Whereas if a broad and well managed passive fund struggles, there's the option for it to be recalibrated and pick up again eventually?? P2p platform will not eventually recover.... I wouldn't compare equities and P2P, they're not really alike at all. With shares there's capital growth and income, with some funds specialising in one or the other and some just disregarding the distinction entirely. I was generally talking about passive products, but the same applies for active investing too. The extremes are a very young company re-investing any and all profit in their own growth with zero dividends, or an aged old behemoth paying big dividends but which has maxed out all of its growth potential. Both can be good or bad investments. IMV, the lesson I learned is that it's the total return that's more important, not the focus on capital growth or income. Risk-wise, then IMV yes, providing you stick to broad-based index funds, then its my view they're much less risky than P2P as you say. Individual stocks a whole different kettle of fish, see recent Thomas cook thread for an example The only reason I'm anywhere near P2P now personally is that equities are currently so expensive.
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Post by dan1 on Sept 26, 2019 21:48:48 GMT
As I understood, high dividend yield funds (e.g. VHYL that r00lish67 mentioned) were a (weak?) proxy for 'value', and as per the 'size' premium, you effectively take a (comparatively modest) higher risk for higher reward. I also recall reading sometime ago that according to French/Fama the performance of the size, value and momentum premiums are cyclical when compared to the underlying indices. I'm sure I'll get "walled" before long  |
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Post by propman on Sept 27, 2019 9:31:09 GMT
Re P2P, there are 2 distinct potential loss scenarios:
1) losses exceed those expected but platform still viable: return disappoints but, assuming that you have diversified among many loans and no fundamental economic event (see property below) unlikely to lose more than a small proportion of the investment.This is the more likely scenario. 2) platform failure: variety of possible outcomes that could potentially lose you most of your funds and has the capacity to lose any access for a sustained period even if ultimately a significant amount is recovered. For established genuine P2P (ie lending to third parties NOT an originator) this is an unlikely event.
Re 1), economic events impacting broad based loans is likely to result in a major correction of shares although international diversiification may avoid this in a way difficult with P2P.
Re 2), lending outside UK does require more due diligence eg the number of failures in China. Also with smaller platforms 1) could morph into 2) as they are overly impacted by a large loan that may cause widespread divestment and platform collapse. Hopefully the required wind down plan under FCA rules should mitigate this, but especially with the pooled funds the losses on 1) could still be significant and wind down arrangements are by definition untested in practice so might not operate as intended.
I personally do worry about property loans. These are frequently only supported by the property asset with no other substance. Furthermore the only "exit" to the loan is often refinancing as many loans are shorter than the underlying developments so there is no saleable asset to realise security. As a result, if teh property market declines appreciably (and such declines have often been broad based and significant) then a large proportion of such loans may default together. In a bad position, the only real method of recovering a significant proportion of the investment (to take over and complete the project) may be very difficult to achieve so losses may be steep. As to magnitude of declines. Commercial property has often declined 50% in value in recessions. Tables suggest that residential have fallen much less. But that is completed residential. The market for development is critically dependent on continued development finance, while the holding cost of a slow market at conclusion can eat deep into project recoveries. As a result large losses have occurred in each property recession even where there has just been a slow down in price rises and sales!
JMHO
PM
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Godanubis
Member of DD Central
Anubis is known as the god of death and is the oldest and most popular of ancient Egyptian deities.
Posts: 2,011
Likes: 1,013
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Post by Godanubis on Sept 30, 2019 16:43:38 GMT
This Bank of Scotland Current account... Good for <£4000 investor 7.18% AER well within £1000 tax allowance
Your Interest Rates
Any balance up to £5000.00 will earn the interest rate in the table below subject to account conditions. No additional interest will be paid on any balance over £5000.00.
Balances of AER% Gross p.a.%
£5,000.00+ 0.00 0.00
£4,000.00+ 3.90 3.83
£1.00+ 7.18 6.95
To get interest paid each month, all you need to do is:
• Stay in credit during the month.
• Pay in at least £1,000.00, for example your salary, each month.
• Have at least two different direct debits paid from your account during the calendar month.
AER is the Annual Equivalent Rate and illustrates what the interest rate would be if interest was paid and compounded once each year.
From 6th April 2016 your non ISA interest is paid gross, this means that we will not deduct tax automatically from your interest. Depending on your personal circumstances tax may be due on the interest and it is your responsibility to disclose and pay any tax due directly to HM Revenue and Customs (HMRC).
We will give you at least 14 days notice before we take any Overdraft fees or interest out of your account. Interest rates and fees are detailed as at the date of this statement.
Back in 1983? These were the rates on my current account as of today.
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r00lish67
Member of DD Central
Posts: 2,692
Likes: 4,048
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Post by r00lish67 on Sept 30, 2019 17:03:51 GMT
These were the rates on my current account as of today. As I'm sure you well know, there is no publicly available 7% interest offer currently ongoing for a BoS current account and hasn't been for many years. So what are you referring to? Some employee/legacy perk or something?
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