Ratesetter Investment Review & £100 Free Cashback Bonus

Before I get into the Ratesetter investment review, I’ll explain how to get this £100 bonus. They have just re-opened their new investor offer where if you invest £1,000 for only a year, you’ll get a £100 bonus for free.

To get the bonus, follow my links to Ratesetter in this article. When you use my links I will also be paid by the “refer a friend” bonus, don’t worry this won’t affect your returns, although is greatly appreciated!

Utilising this offer will allow you to get a guaranteed 10% return on your money, plus the interest that is made during the year. That’s brilliant considering the low level of risk with this investment!

Ratesetter Investment Review

What You Need to Know


Ratesetter is one of the leading platforms for both safety and returns. It was established in 2010 and close to £4 billion has been lent through the platform.

If you invest in the Max market, you can enjoy 4% returns. This in comparison to keeping your cash in everyday savings accounts with a few percent interest at best makes it quite an attractive option, especially if you’re wondering how to diversify your portfolio with the recent volatility in the stock market.

Like one of their main competitors Zopa, they aim to make the investing process as simple as possible with 3 investing options.

Their investment markets are Access, Plus and Max with the average returns shown below.

Access – 3%
Plus – 3.5%
Max – 4%

When Will the Capital and Interest Be Paid?

There are two types of loan contracts that Ratesetter offers. Amortising contracts, and non-amortising contracts.

Amortising – capital and interest each month

Non-amortising – end of term max 24 months

Both appear in monthly account statement.

Is Ratesetter a Safe Investment?

Just to put your mind at ease and highlight just how safe this investment is I want to make you aware of the FE score.

An FE score is a metric used to measure risk, which is defined as the relative volatility of an investment compared to the UK Leading 100 shares, analysing the previous 18 months of historical pricing. The UK Leading 100 shares have an FE score of 100.

Ratesetter has an FE score of 1, which to put in perspective, it is just above cash which has a score of 0. So for those investors that are looking to have a diversified risk portfolio, this is an excellent return for the level of risk.

If a Borrower Misses a Payment or Defaults Will This Affect the Return?

Every borrower that uses Ratesetter pays a small risk premium which is pooled together into a Provision Fund. This Provision Fund is then used if any borrowers miss or default on a payment. If this happens the fund then pays back all the outstanding capital to investors.

To date this has made sure that no investor has ever lost money. As the fund increases in size every year, it only increases the security.

Although do remember that past records are no guarantee of future performance.

Can I Use an ISA to Invest?

In February 2018, Ratesetter released an Innovative Finance ISA. You can enjoy all of your interest tax free for all investments within the ISA allowance.

If you want to increase the amount you save every month, make sure you check out other pages on this site and make the most of compounding!

Who Can Open an Account and Invest with Ratesetter?

Anyone over the age of 18, is a UK resident and has a UK bank account.

If you aren’t a UK resident, there are still many attractive options. This includes both in the peer-to-peer investment space and other passive investment options.

What’s the Minimum Deposit and Investment?

To load money into your account there is a £10 minimum via debit card and no minimum by bank transfer.

Once the money is on the account, there is a £10 minimum to invest into loans.

Are There Any Fees on the Platform?

To invest your money in the platform, there are zero fees.

This is a welcoming sight, especially when diversifying your portfolio as when investing in stocks and bonds, even the best options, such as Vangaurd still have fees, even though they are low. Although fees can climb to over 3% for certain funds which can seriously damage long term returns.

However, for the Plus and Max markets there are fees if you want to withdraw your money. Below is a breakdown of the percentage fee for withdrawing early in each of the markets. This is taken as a percentage of the capital withdrawn.

Access Market Release fee:
No fee – free to release funds

Plus Market Release fee:
30 days of interest based on Going Rate at the time of release

Max Market Release fee:
90 days of interest based on Going Rate at the time of release

You are able to access your money at any time which is excellent as makes this a brilliant liquid investment.

However, access to your money is not guaranteed and in extreme cases repayments will have to follow the borrowers repayment schedules, although this is very rare. The average time to access funds for investors is only one day.

Is Ratesetter Regulated?

Yes, they are regulated by the Financial Conduct Authority #722768. However, investments made are not protected under the Financial Services Compensation Scheme (FSCS) which guarantees ordinary bank deposits. So please remember that your capital is at risk.

What Happens if Ratesetter Goes Bankrupt?

The way the loans are set up and structured makes them a true peer-to-peer lending platform as you contract directly with the borrowers. This means that if anything were to happen to Ratesetter, the loan capital and interest payments are separate, so will continue.

To handle the loans correctly in case any problems arise, an independent trustee has been appointed.

However, if they were to go bankrupt this would mostly likely cause a significant level of administration costs so ideally this won’t happen. If anything did happen it would be a huge problem within the whole peer-to-peer lending market as Ratesetter are one of the biggest and safest companies to use.

Tricks and Tips to Maximise Returns

Grab the New Investor Offer to Secure High Returns

The current offer to all new investors will net you an impressive £100 cashback bonus by investing only a £1,000 for a year, not a bad return! Even without the interest that’s a 10% return, so act fast in case they remove the offer.

Just follow this link to Ratesetter to claim your cashback bonus.

The cashback is credited to your account within 30 days of qualifying, which happens after you have invested at least £1,000 for a year. The money is added to the Access Market easy access account and can be withdrawn at any time, as well as your initial investment or reinvested to continue to earn interest.

Utilise the Going Rate to Maximise Earnings

The Going Rate in each market is based on supply and demand for lending and borrowing money. Each investor has the ability to customise their investment rate up to 5% above the Going Rate. Remember that it may take more time to invest your money if you increase your rate, so even though you’ll be earning a higher interest rate, the time out of the market could offset any marginal increases.

Maximise Your ISA

Make sure to maximise your ISA allowance. All interest earned is tax free allowing you to maximise your returns instead of paying any additional tax. Compounded over time, this tax saving can allow this investment vehicle to deliver superior returns when compared to other sources.

Utilise the Auto-Invest Feature

Ratesetter allows you to automatically transfer and invest money at a custom or market rate each month for free. This is a key tool as consistency in investing is the key to wealth creation. You can invest with any amount above £10 per month, so anyone can get started. Being free is also a huge benefit. Other platforms, mainly those tied to the stock market, you can pay upwards of £10 per trade. This can add up rapidly with regular investments, eating into that all important return on investment.

Ratesetter Investment Review Conclusion – Recommended

Overall Ratesetter is a solid and easy to use platform with brilliant returns for the level of risk.

This investment platform is definitely something that I would recommend to anyone to add to their portfolio. So whether you are a seasoned investor or you are just getting started, just follow the link to Ratesetter here and get started earning more money.

If you’re looking for more ways to generate passive income, both through investing and other strategies, discover new passive income ideas here.