The product marks the first time that peer-to-peer technology has been applied to a one year bond product: the initial Market Rate of 5.0% compares favourably with traditional high street one year bonds.
Like a traditional high street bond, a Saver signs up to a fixed rate for a one year term, receiving the capital and interest at the end of the term. The difference is that the P2P Bond is agreed as a direct loan between a Borrower and a Lender on the RateSetter exchange with the rate determined by thousands of Borrowers and Savers. The current rate sits at 5.0%.
RateSetter founder and CEO Rhydian Lewis said:
“RateSetter is combining the benefits of peer-to-peer finance with what is a very traditional and consumer friendly product. The One Year Bond is an entirely new concept in the world of peer-to-peer, and we hope this could become a popular savings alternative. Everything we do is designed to harness the benefits of P2P in creating simple, consumer friendly products.”
RateSetter has also extended its range of fixed income products to include a new 5 Year offering. Savers will now be able to lend and receive a fixed return for this period. The current RateSetter market rate is 8.3%.
Rhydian Lewis said:
“Every Saver has a different plan for the future - our new 5 year Income product, combined with the unique protection that RateSetter offers, will offer great value for someone with a long term investment view. Our unique Provision Fund has ensured that every Lender has received every penny of expected capital and interest – we are a unique proposition in peer-to-peer lending”.
