This must be a little bit of a kick in the teeth to RS's plan to reduce their overall rates by cutting the GRs a couple of weeks ago. They didn't much like lending at 3.0% / 4.0% / 5.0%, and now they find themselves lending on at, err, 4.1% / 4.6% / 5.1%.
Hooray for market forces!
At least until early tomorrow morning, when the automatic orders will suddenly yank the the going rate back down to the Going Rate.
Never has it been more clear that RS is acting contrary to investors' best interests.
With loans currently changing hands in the market at 4.2% (Access), when I choose to invest the website suggests I do so at 3.0%. Even when I click the tiny pencil, the initially selected rate is 3.0% ("you're at the front of the queue") -- never mind that I can click the "+" 12 times and still be at the front of the queue.
This is pretty underhand.
In fact, since only the GR is displayed along the typical route to placing an order, I don't think the average user would even have the faintest idea that 4.2% is the true market rate, let alone be able to find how to achieve it.
Invested a chunk of cash almost 40 minutes ago and it's still on market ? Surely it should have gone on loan by now ? Mind you I have not used my ratesetter account since February. Anyone know what to do?
Invested a chunk of cash almost 20 minutes ago and it's still on market ? Surely it should have gone on loan by now ? Mind you I have not used my ratesetter account since February. Anyone know what to do?
What rate did you set?
Assuming you're talking about Access :
Right now, setting 4.2% would put you at the front of the queue. Then you would match next time the system wakes up and does some matching (although you could be overtaken in the meantime by others selecting 4.1%). Matching happens in occasional little spurts. Perhaps they're holding back from matching too much ... wouldn't want to encourage lenders to think too high!
4.1% would get matched to an existing borrower order -- I'm not sure whether they changed how this works, but it used to be an instant match, and then potentially a bit of a wait for the loan to form.
As I'm, for the first time since the new products launched, considering re-entering the fray I'm just thinking out loud. Unless you think you'll need the money in a hurry, would MAX not always be the best product?
I say this as MAX rates are 1.00% p.a higher than access. The access fee is 90d interest i.e. 1/4 of the going rate, so currently 1.00%.
So providing you're confident that you will retain your investment for about a year (slightly less in fact as it will amortise away) then you're going to be earning a higher rate than access/plus even if you subsequently cash them in (unless the GR shoots massively upwards, which doesn't feel particularly imminent).
This combined with the fact that using P2P in general as "easy access" is a bad plan in my view, that seems to steer me towards always using MAX.
Aside from paying a fee, is there any other prioritising done between products when using RYI? That would be the only other thing to make me interested in Access - if RYI's were prioritised even after the Plus/Max orders have paid their fee.