Not just avocado toast! Younger Oz investors flocking to RateSetter
RATESETTER is proving popular down under with millennials – typically those born in the early 1980s up to the mid 1990s – leading to a surge of investment into the lender’s one-month rolling product.
Data from RateSetter’s Australian platform, launched in 2014, shows its one-month product is the most popular among all generations, with 72 per cent of millennials having invested.
The platform says this goes against claims that millennials are wasting their money on fads such as avocado toast.
The one-month product is also the most popular among those described as Generation X – those born between 1965 and 1984 – with 71 per cent of this cohort investing in the one month product, followed by 59 per cent of pre-retirees and 57 per cent of retirees.
% investing in each of RateSetter’s lending markets since 2014
Millennials
|
Gen X
|
Pre–retirees
|
Retirees
|
|
1 month
|
72%
|
71%
|
59%
|
57%
|
1 year
|
40%
|
42%
|
47%
|
52%
|
3 year
|
39%
|
51%
|
56%
|
61%
|
5 year
|
36%
|
43%
|
44%
|
44%
|
The average investment across all RateSetter’s products has also increased from an average investment of $3,777(£2,244.95) two years ago to $11,483 today.
The platform says it has now facilitated $150m of loans and now has more than 7,700 investors, with 56 per cent moving money from bank savings accounts, while 17 per cent have shifted funds from their equity portfolio.
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“Far from wasting money on avocado toast, these young investors are seizing the opportunity to make their money work hard,” Daniel Foggo, chief executive of RateSetter, said.
“For a variety of reasons they may want ready access to their money, so the one-month market gives them a stable, attractive return of around four per cent and easier access to cash if they need it.
“RateSetter’s savvy investors are making their money work hard. Instead of leaving it in accounts offering poor returns, they are seizing the opportunity to earn a decent rate of return, even if it’s only for a month.
“Younger Australians realise that they won’t get ahead by leaving their cash in a low interest rate bank account, so they are prepared to take a small amount of risk to earn better interest rates.”
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