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"RateSetter increases provision and temporarily reduces interest"

Any other investment discussions eg. peer to peer lending
chas49
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"RateSetter increases provision and temporarily reduces interest"

#305601

Postby chas49 » May 4th, 2020, 2:18 pm

announcement here

We are announcing a temporary reduction in interest as a result of an increased provision we are making for the impacts of the current economic climate.

The COVID-19 pandemic is having a major impact on the economy. Central banks have cut interest rates, share prices have fallen and banks have cancelled their dividends for investors. Economic activity has reduced and, while the government is providing unprecedented support, individuals and businesses are having to adjust.

It is in this context that we are announcing a temporary 50% reduction in interest. This interest will go to the Provision Fund. This reduction is expected to last for the remainder of 2020.


and
We have therefore decided on an interest reduction of 50% for the remainder of 2020. We will keep the interest reduction under review every 30 days and update you in your monthly investor statement. If conditions improve, rates will rise as quickly as possible.

Code: Select all

What this means for interest rates |                              |                                       |                               
                                   |                              |                                       |                               
                                   | Annual rate so far this year | Annual rate for the rest of the year* | Effective annual rate in 2020*
Access                             | 3.00% p.a.                   | 1.50%p.a.                             | 2.00% p.a.                   
Plus                               | 3.50% p.a.                   | 1.75%p.a.                             | 2.33% p.a.                   
Max                                | 4.00% p.a.                   | 2.00%p.a.                             | 2.67% p.a.                   
                                 


*Assuming the interest reduction applies for eight months.

The interest earned on each investor’s existing personal investments will depend on the original interest rate of those investments.

AleisterCrowley
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Re: "RateSetter increases provision and temporarily reduces interest"

#305620

Postby AleisterCrowley » May 4th, 2020, 3:38 pm

Yep, got this delightful news earlier, a few days after the Nationwide ISA cut one... :(
At least their capital coverage ratio is healthy

Lanark
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Re: "RateSetter increases provision and temporarily reduces interest"

#331233

Postby Lanark » August 5th, 2020, 8:25 pm

and now they have agreed to a takeover by loss-making Metro bank
https://www.ft.com/content/00a8e96a-5ee ... fb49d3f9d3

RateSetter have also been losing money over the last few years so this feels a bit like they are joining together to lower the administration fees when they both get wound up!


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