RateSetter tells investors withdrawals are taking longer

RateSetter has notified investors that withdrawals are taking longer due to a spike in demand.

The platform suggested that coronavirus uncertainty could be to blame, as more people want to withdraw their money in the face of stock market losses.

RateSetter told investors that it is continuing to process ‘release investment’ requests as quickly as possible but that this is likely to take more than a week as opposed to its usual one day.

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“This is a global shock, stock markets are processing the news and trying to find a new level, resulting in a volatility not seen for 40 years,” said Rhydian Lewis, chief executive of RateSetter.

“Interest rates have been cut which will result in savings rates falling further.

“RateSetter avoids volatility and delivers stable, uncorrelated returns that keeps your money earning and this is a moment when the asset class can prove its worth in a diversified portfolio.

“We are continuing to see inflows, especially as ISA season approaches, but we are not isolated from the wider investment environment and in response to a spike in requests from investors this week we have provided guidance that it will temporarily take longer than usual to process investment release requests.

“Our focus is on keeping investor access open and flowing, while managing our obligations on the borrower side, and getting back to normal as quickly as possible.”

In a note to investors, RateSetter added that it has kept interest rates unchanged and its portfolio is continuing to deliver steady returns to investors.

“There is no change in the credit performance of our portfolio and we continue to believe that the Provision Fund is sufficient to cover all future expected credit losses,” the platform added.

“Given the context of the wider investments environment, it is understandable that we have received a spike in requests to release invested money.  This has meant that we have not been able to process requests as quickly as usual.

“We have taken action to prioritise these requests by materially reducing lending while taking into account ongoing obligations on the borrower side.”

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RateSetter said that withdrawals from investors’ holding accounts to their bank accounts are unaffected by current events and are being processed as normal in one working day.

“You will understand that we are acting in this way in response to extraordinary circumstances,” RateSetter told investors.

“We have experienced something similar once before in our 10-year history and we delivered all of our investors their money with a short delay.

“We aim to return to our regular speed of processing ‘release investment’ requests as soon as possible and in the meantime, we thank you for your ongoing support.”

Meanwhile, Assetz Capital has paused withdrawals from its Access Accounts.