RATESETTER plans to add one-year loans to its Rolling Market, after revealing that its average rate beat the FTSE 100 across 2018.
The peer-to-peer platform currently offers three options to investors: one-year, Rolling Market, and five-year loans. However, the one-year market is the only one which will repay investor’s money plus interest at the end of the term as opposed to loans that pay it back in monthly instalments. As a result, the one-year market is the platform’s least popular, holding just 15 per cent of RateSetter’s total funds.
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However, in February the firm will introduce new functionality so that the Rolling Market can also fund these loans.
“This will further enhance the depth of the Rolling Market, improving access for investors and providing greater certainty of funds for borrowers,” said RateSetter’s chief investments officer Mario Lupori.
“The Rolling Market will continue to work as it does now, with your money matched to borrowers for the term of the loan and you can request access to it any time, at no cost.”
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The update comes after RateSetter announced that its Rolling Market rate outperformed the FTSE 100 in 2018, delivering an average return of 3.1 per cent across the year, compared with a loss of 12.5 per cent for the stock market.
By comparison, Bank of England data found that the average interest rate for instant-access savings accounts in 2018 was just 0.2 per cent.
“We launched RateSetter to help people earn more on their money, filling the gap between the safety, but low returns, of cash savings and the volatility of shares,” added Lupori. “Increasingly, investors are finding that RateSetter offers healthy, steady returns in exchange for accepting an element of risk.”