RATESETTER has justified its decision to lower the rates on offer through its Plus and Max accounts, claiming it ensures the platform remains stable and liquid.
Some peer-to-peer investors have expressed frustration after the platform cut interest rates on two out of its three new investment products just a month after launching a new range.
As of 2 December, the interest rate on its Plus account will be reduced from four per cent to 3.5 per cent, while the rate on its Max product will be reduced from five per cent to four per cent.
There is no change to the interest rate for Access, which remains at three per cent.
Mario Lupori (pictured), chief investments officer, has revealed the increasing popularity of the platform’s longer term Max product meant the average rate across the platform was increasing, which meant the lender had to intervene to keep the rate sustainable.
“When we launched the new product we started seeing a different dynamic of where people where putting their money so our assumptions needed to be revised,” Lupori said.
“We have seen more money going into the longer term products.
“That is a sign of success and more are choosing to invest for the longer term.
“More money is going to Max than was previously going into five-year so the average rate across the three products is higher.
“The reasons it is important to have a lower investor rate is because we are targeting to be the most stable and liquid platform.
“We need an investor rate that enables us to lend to those borrowers who are creditworthy.”
He said the platform isn’t planning any more changes in the near future but needs to be responsive and move rates up and down.