New Ratesetter classes?

TUVOK

I've just had a quick look at the email from Ratesetter on their three new classes.
I have a small amount held with them, but I'm not an expert on this type of investment, can any forum member please give their opinions on the new classes?

bowlhead99

Per their FAQs they are all the same in terms of risk and liquidity except with the higher tier products have an exit penalty of 30 or 90 days interest (at the 'going rate'), which means people using those products are effectively committing to tie their money up for longer, which means one would expect to find the going rate to be higher.

masonic

There's plenty of discussion here:
http://p2pindependentforum.com/thread/15559/coming

The new going rate seems to have been set about 1% below recently achievable rates in the existing markets, but there has always been the problem that the market rate starts off the week low and increases as supply towards the end of the week dries up. Many people exploit this and time their lending to coincide with periods where rates are normally higher. That's how markets work, but RS doesn't want this to disadvantage people who reinvest automatically at the market rate.

Now, instead of your money being put back into the market the market rate, they will be put into the market at the "going" rate of 3%, 4% or 5% (fixed by RS) depending in which market you lend.

Initially, lenders will continue to be able to set their own rates. ISTM this ability to set your own rate (on which the RateSetter name is based) is being gradually made harder and harder and will probably be withdrawn. That would bring the offering in line with other similar accounts such as the Assetz Capital 'access' accounts, which pays 4.1% and is equivalent to the RS 'Access' 3% product and their 30 and 90 day notice products paying 5.1% and 5.75% respectively, which are somewhere between the RS 'Access' 3% product and 'Plus' 4% product. Of course the types of loan contained within those higher rate Assetz Capital products are different.

Prism

I just sold out of the rolling market (took about 3 minutes in total for 5k btw). I will consider putting some back in when these new classes arrive. Pretty happy with the liquidity for a small amount.