investing in ratesetter and selling out question

khampson

Hi I am wanting to invest about a grand in ratesetter but I dont know if I will need the money inthe near future for an unexpected bill, my question is do I invest it in the monthly, 3 year or 5 year market. I know I will be charged 1% by ratesetter to cash out the loans, and I am alson am aware that there is a minimum £10 loan sell out meaning if I only invest £10 as soon as the first payment has been made it can not be sold but I plan to invest in an initial £1000 and around £30 weekly after that so assuming they go to the same lender and the loan is not worth less than £10 I can sell it on. But I am hoping nothing crops up as we all do and I can invest for the intended duration so which market is best for me if I go down this route and not leave it in my bank account, I have a zopa and funding circle account but I feel these take more managing and dont have a provisional fund like ratesetter does even though the rates are better after tax.

Any help would be gratefully appreciated

Regards Keith

JoeCrystal

My only issue is that fact you have serious doubt on whatever you need the money for emergency. In this case, that £1,000 is better off in safe saving accounts. Ideally, you should invest money that you can afford to risk without worrying about it. You cannot do that if there is a chance that you are going to rely on the money in the near future.

Cheers,
Joe

khampson

Thanks joe, Ratesetter do offer a monthly option returning around 2.2% apr before tax which as it suggests will give me monthly access to the money if I need it. Also I could even split the money up by putting so much in the monthly so much in the 3 and 5 year options. I could also leave £500 or so in my bank savings account. Also in the mean tim I was thinking of topping up my ratesetter account and my bank savings account weekly to. Maybe Ive just answered my own question here but others may have a different approach but with all good intentions I want to save long term.

Keith

sharpe106

If you think you might need the money you will be best looking at a isa that you can withdraw might get a bit less but at least have access to money easily. The monthly rate is not really worth it, if you are a taxpayer.

With that amount in the 3/5 year option you will get very little intrest as each month part of the capatil gets paid back so unless you are going to reinvest every month you will not see much, plus you can not get the money back once its in the 3/5 without the sellout option. Which if you use will cost you most of any intrest you have made if not more due to the amount.

psychic_teabag

khampson wrote: »

I have a zopa and funding circle account but I feel these take more managing and dont have a provisional fund like ratesetter does

zopa's "safeguard" is not all that different from ratesetter's provision fund. And arguably takes less managing since you don't have (get) to choose your own rates.

Have you consider 5% fully-protected instant-access in a nationwide current account ? (With a few hoops to jump through.) Or a first-direct regular saver @ 6% for the £120 monthly savings ? (Though that does penalise early access heavily.)

khampson

psychic_teabag wrote: »

zopa's "safeguard" is not all that different from ratesetter's provision fund. And arguably takes less managing since you don't have (get) to choose your own rates.

Have you consider 5% fully-protected instant-access in a nationwide current account ? (With a few hoops to jump through.) Or a first-direct regular saver @ 6% for the £120 monthly savings ? (Though that does penalise early access heavily.)

I have an account with zopa but unaware about what and how safeguard is. And not seen the nationwide or first direct options but all 3 sound good. Does anyone have any more information on them. I prefer online only as I dont have time to go into banks due to working.

Thank you