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RateSetter Review + £100 New Investor Bonus Offer!


RateSetter are one of the most well-known peer to peer lenders in the UK. In this RateSetter review, we look more closely at the company through the eyes of an investor to examine how the investment process works, what kind of returns you can expect to see and also to answer that all important question of whether or not your money is safe with RateSetter.

Who Are RateSetter?

RateSetter* started life in 2010 and are one of the most recognised peer to peer lenders in the UK. They have won many awards such as the ‘best peer to peer lender’ award from investing publication ‘Investors Chronicle’ for the past 3 years running, and they are best known for introducing their ‘provision fund’ to peer to peer lending. The RateSetter provision fund* is hailed by the company as being the primary reason why not a single one of its 58,000+ investors have lost any money during RateSetter’s 7 year existence.    

Why Invest With RateSetter?

Now that you have a little bit of background info on RateSetter, you may be wondering why somebody might want to invest with the company, rather than leaving their money in a Cash ISA or some other type of investment? The simple answer to this is that the interest rates on offer to Ratesetter investors can far outweigh the rates you’ll receive on a standard savings account or Cash ISA at this time. They also don’t charge any fees to invest.Ratesetter £100 signup bonus offer

How Does RateSetter Work for Investors?

RateSetter are a peer to peer lender who connect investors who want to lend out their own money with individuals or businesses who are looking for a loan. To start the investment process, the first thing you’ll need to do is to register your details on the RateSetter website* and then decide how much money you’d like to invest.

The most popular RateSetter account is The Everyday Account*, as there are no limits on the amount you can invest with this type of account and you can invest as an individual investor and also as a business. The company also recently launched the RateSetter Innovative Finance ISA* which works in just the same way as the Everyday Account but all of your earnings in the Ratesetter ISA are tax-free.

Once you invest your money, you’ll then need to decide what rate of interest you want to receive. Ratesetter offer you the option of choosing how much interest you want to earn on the money you invest. However, Ratesetter will also recommend a ‘market rate’ and this is the interest rate that will give you the best chance of successfully lending out your money and earning interest right from the start. For example, if the market rate is at 3% but you set your rate at 5%, then your money would only be lent out if there is enough demand from potential borrowers who are willing to pay your chosen rate. If you select the suggested market rate, however, then this will mean that you drastically increase the chances of your investment being matched with a borrower.

Once your money has been matched to a suitable creditworthy borrower, you will start earning interest as soon as the repayments on the loan start to be made. While you are able to withdraw your capital and interest repayments as you go, there’s also an option to automatically reinvest your capital and any interest earned as the repayments are made, to make the most of your invested cash and avoid it lying idle in your holding account.

How Much Interest Can You Earn?

As mentioned earlier, how much interest you earn with RateSetter is up to you, as you have the option to set your own interest rates. To ensure that your money gets lent out and you start earning interest in a timely fashion, however, most investors select the current ‘market rate’ and at the time of writing this is set at between 3.7% and 5.3% annually, depending on whether you invest in the Rolling, 1 year or 5 year market. To see the current rates on offer head on over to the RateSetter Website*.

What If You Want to Withdraw Your Money?

With The RateSetter Everyday Account*, you can always withdraw your capital and interest when it has been repaid by borrowers free of charge if you have not chosen to automatically reinvest it. If for some reason you need to access all of your investment, then this is also not a problem – even if your money has already been matched to a borrower – as you can release your investment at any time just as long as there are sufficient funds available from other investors to take your place on any matched loans. Depending on which type of market you are invested in, there may be a small ‘transfer fee’ payable to facilitate this.

Is Your Money Safe With RateSetter?

Now we come to that other all important question, is your money safe with RateSetter? While there is no FSCS protection with RateSetter, they do proudly state that – due to their provision fund – no investor has ever lost a penny when investing with the company. This doesn’t mean that it won’t happen at some point in the future as past performance is no guarantee of future success, but it is encouraging nonetheless. To find out more about how the Provision Fund works, check out this page on the RateSetter website*.

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If you’re looking to earn a better rate of interest on your savings and you are interested in the idea of peer to peer lending, then RateSetter* could be a great place to start. With a proven track record of safeguarding investments and with the Everyday Account and Innovative Finance ISA offering a good rate of return and easy access to your money should you need to get your hands on it for any reason, RateSetter offer an interesting proposition for frustrated savers looking for better returns.

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