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Investing & Market Orders
What is a holding account?
The Holding Account contains deposits made into your RateSetter account as well as capital and interest repayments on existing loans. You can withdraw these funds from your account immediately or place them on market to be matched against borrower loans.
Funds in your Holding Account are held as cash on trust in an account with an Australian Authorised Deposit-taking Institution, in the name of RateSetter’s appointed custodian. You do not earn any interest while your funds are in your holding account.
The custodian also acts as the legal lender of record in relation to loans made to borrowers.
How long before my order is matched to a borrower?
Once you’ve made an order, it can take anywhere from a few minutes to several days or more for the order to match with a borrower. This depends on the amount and rate you are offering, as well as the rate that borrowers are willing to accept.
As a general guide, investors bidding lower rates in our lending markets are matched with borrowers more rapidly. This is because our borrowers are matched at the lowest rate.
For more information, you should see our Product Disclosure Statement.
How do I see previously matched rates?
We believe that transparency is fundamental to peer-to-peer lending. That’s why we’ve made it easy for lenders to view historical rates and other statistics.
How do I see all in market orders?
Simply login to your RateSetter Account and then click the “RateSetter Data” tab. Click “View Full Market” to view all current lending and borrowing orders in the corresponding market.
How do I change the rate of an existing order?
Please note that it’s only possible to change a lending order if it hasn’t yet been fully matched. If your order has been partially matched (that is, only a portion of your order has been matched to a loan or series of loans), you can change or cancel the order only in relation to the amount that hasn’t been matched.
To change a lending order, log in to your RateSetter Account and click the relevant lending market under “Your Loans and Orders” in the menu on the left. Then expand the box titled “Unmatched” and click “Change” or “Cancel” next to the relevant lending order.
How do I create automatic reinvestment settings?
You can elect to reinvest interest and/or principal automatically as it is received. To access your reinvestment settings, login to your RateSetter Account, then click ‘Reinvestment settings’ in the left hand menu.
You are able to select:
- The lending market into which your reinvestments are made
- Whether the full payment is reinvested, or just the capital amount
- Whether your reinvestment is made at the market rate or at a specific interest rate (selecting the market rate option will help to ensure your funds are reinvested relatively quickly)
To process an order or reinvestment, there must be at least $10 in your holding account.
Can I draw an income from interest payments and reinvest capital?
Yes, you can. By combining the ‘Reinvestment’ and ‘Auto-Withdrawal’ settings, you can re-invest only the principal component of the payments you receive and draw an income to your nominated bank account.
How to enable the reinvestment of principal amounts paid
Log in to your RateSetter account, then click ‘Reinvestment settings’ in the left hand menu. You can then enable the reinvestment of your principal from the relevant lending market to the lending market of your choice. Interest will accumulate in your holding account as it is paid.
How to automatically withdraw the balance of your holding account
To automatically withdraw the accumulated interest in your holding account to your nominated bank account at a frequency of your choice, simply enable the auto-withdrawal setting. Log in to your RateSetter account, click ‘Withdraw funds’ in the left hand menu, and then choose ‘Auto-withdrawal’ and follow the prompts. Please note that you will need to have made a successful manual withdrawal before being able to use the auto-withdrawal feature.
Why is my rate of return less than the rate at which I invested?
Our displayed rates of return may assume that a lender is reinvesting their borrower payments into the same lending market at the same rate. If your actual rate of return is less, this may be because of processing times, because you have not reinvested your repayments, or because you have reinvested them at a lower rate than the original rate of your order.
Why did I receive my loan repayment before the indicative loan term?
For borrowers, one of the attractive benefits of taking out a loan on the RateSetter platform is the ability to repay their loan early without facing any early exit fees or charges. This does mean that the lender may occasionally be repaid early. Lenders can use reinvestment settings to ensure their funds are automatically reinvested back into a lending market of their choice if this happens.
What is the interest rate limit?
The interest rate limit is the highest interest rate at which an order can be placed in a lending market and is determined by us from time to time. The interest rate limit is currently 9% across all lending markets.
Why were my funds in the 1 Month Rolling market not returned to my holding account at the end of the indicative term?
When you invest via the 1 Month Rolling market you are funding loans up to 36 months in term. Typically, the 1 Month Rolling market provides you an opportunity to exit your investment each month (or earlier if a borrower makes an early payment). This is subject to there being sufficient funds from replacement funders to replace your investment at that time.
If you did not receive your funds at the end of the one-month indicative term, there may not have been sufficient funds available from replacement funders to replace your investments in loans.
Importantly, until repaid to you, your funds will remain on loan and you will continue to earn a return at the same interest rate. You will also continue to benefit from Provision Fund protection if one or more borrowers miss payments or default on their loan. You can see additional details about the loans to which you remain matched, and any expected future payments from borrowers, in your RateSetter Account.
Your funds will be returned to your holding account as borrowers make payments and/or as funds from replacement funders are available to replace your investment. See FAQ below for further details.
When will my funds in the 1 Month Rolling market that remain invested beyond the indicative term be returned to my holding account?
Funds that remain on loan beyond the indicative term are added to an access queue. Replacement funders placing new lending orders in the 1 Month Rolling market will replace existing investors in the access queue on a pro rata basis by indicative term date (from oldest indicative term date to newest).
Note that replacement is subject to several conditions, including the “funds replacement buffer” (see FAQ below).
You can view additional details about the access queue, and the position of your funds relative to the queue, in your RateSetter Account.
What is the funds replacement buffer?
The funds replacement buffer is the amount of funds that must remain on the 1 Month Rolling market after any existing investor funds are replaced (except where there are no investors whose funds are matched to a loan beyond the indicative term). The funds replacement buffer will be determined by RateSetter on an ongoing basis and is currently $300,000. See section 7.7 of the PDS for further details.