This is a paid collaboration with RateSetter investment income.
From paying off £15,000 in credit card debt a few years ago and saving to buy a house this year, we’ve had a lot of financial goals and commitments lately, and one area I’ve been keen to grow is our passive income through investments. In this post I’ll talk about how RateSetter’s investment income helped us achieve this goal, and how you can get a £20 bonus when you start investing.
Who are RateSetter?
RateSetter is a peer-to-peer lender It was launched in 2010 by Rhydian Lewis and Peter Behrens in their quest to make finance fair and to help people like you and me earn more for their money. By addressing the investment gap between cash and stocks, they were able to achieve better returns for everyone, not just the wealthy.
One of the great achievements of RateSetter is that every investor received all of their capital and expected benefits – including me. Of course, past performance is by no means a guarantee of future success and your capital is at risk with the investment, but this is a proven track record.
Since its launch in 2010, it has had over 600,000 clients and is fully regulated and authorized by the Financial Conduct Authority (FCA).
What is peer-to-peer lending?
Peer-to-peer lending is the practice of lending money to creditworthy individuals or businesses through websites that connect lenders directly with borrowers. They usually operate with lower overhead costs and are able to offer their services at a cheaper price than traditional financial institutions. This in turn helps lenders often achieve higher returns on their money compared to those offered by banks, and borrowers are also able to borrow money at lower interest rates as well.
Often known as crowdlending, interest rates may be set by the lenders themselves or set by the company. This method of lending has emerged in recent years as people look to get higher returns on their money than what is traditionally offered. RateSetter itself operates with a high level of caution and only matches investors with borrowers who meet their strict criteria. In this case, it is RateSetter that handles the matching.
One issue that investors worry about when it comes to peer-to-peer lending is not getting back their principal or interest when borrowers default. Thanks to RateSetter’s savings fund, investments are protected against missed payments.
Shouldn’t I put my money in a savings account with my bank?
The problem investors face with cash savings is that there are not great interest rates at the moment, especially from banks.
This is due to how banks are regulated, with the aim of keeping cash deposits safe. The payoff for this is usually low returns. This is where RateSetter differs, as it can offer returns of between 3.1% – 5.2%. To put this into perspective, my online savings account with my bank offers me 0.25% interest. What’s more, you can get a £100 bonus when you invest with RateSetter, increasing your returns significantly.
It’s a really good idea to have a diversified portfolio. To do this, I have cash savings, property, premium bonds and ISAs.
How to invest with RateSetter
Rate_Setter We’ve come up with two great investment accounts and three markets you can choose from, depending on your needs. You can start investing from as little as £10, making it affordable for everyone.
Their three markets are:
- Traded Market – Access your investment for free with a previous return of 3.4%*
- 1-Year Market – Pay a 0.3% fee to access your investment early with an ex-return of 4.3%*
- 5-Year Market – Pay a 1.5% fee to access your investment early with an ex-return of 5.4%*
*Average prices in June 2019
The two investment accounts you can choose are the Daily Account which allows you to invest in all three markets or Innovative Finance ISA Which also allows you to access the same markets, but so do your returns (your investment income). Tax free.
With RateSetter’s innovative Finance ISA, you can not only benefit from great returns, but you can also enjoy them tax-free.
Get a £20 bonus on your investment with RateSetter
In the past, Ratesetter have offered a £100 bonus when you invest £1,000, but now they have a new and improved referral program that I think you’ll love.
You need to deposit just £10 into Ratesetter to get a £20 bonus using my referral link.
Please remember that if you take advantage of this offer, there will be no FSCS (Financial Services Compensation Scheme) cover for this and if you lose capital, you will not be protected. Please be aware of the risks involved.
My investments in RateSetter
I thought it would be helpful to show you my results from RateSetter.
As you can see, a £1,000 investment generated a return of £1,149.64 over 12 months.
As part of a diversified investment portfolio, I’ve been really pleased with my results from RateSetter.
Want to check it out for yourself? Click here to learn more about RateSetter.
