How to Earn Big ££££ On Your Savings

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How to Earn Big ££££ On Your Savings

Postby admin » Sun Oct 12, 2014 10:22 am

If any of you guys are from the UK* and you want to earn good rates of interest on your savings, then read on...

Are you saving up to quit your job and go to live in Asia for a while? Or are you just fed up with earning 1 or 2% interest on your savings account?

Here's my trick for earning >>between 3.7 and 12% a year<< on the hard earned cash from my day job :shock: . The income from these sites helped me pay for my year spent in Thailand, Malaysia and China during 2013.

So let's do some maths...

Hey - did you know that on a £1000 savings account 1% interest gives you £10 a year, but boost the rate to 3.7% and you get £37 back. Do a bit more work and achieving 12% interest gives you a whopping £120 a year of free money :P .

So what's the catch?

You can get these rates of interest from using P2P savings accounts. These accounts basically borrow your savings and lend the money out to other borrowers for car loans and other types of loans. By being online only operations, they don't need branches like banks and so their lower costs mean they can afford to pay YOU higher rates of interest.

The downside is that although P2P companies are now regulated by the Financial Conduct Authority, your savings in them are NOT guaranteed by the FCA like they are with banks. If these companies go bust, the government won't bail you out!

So don't put money in them that you cannot afford to lose! In practice though, even if a P2P company goes bust, you should still get something back, as the loans you've funded will still have a value in them.

The good news is that I've been investing in P2P companies since 2009, and it proved a great investment even in the depths of the financial crisis.

Here's my links for the various P2P sites out there:

Funding Circle (see below)

Make sure you sign up to any of these sites using the links above, because if you use these links then YOU get a good bonus for joining. The bonuses are:

If you join Ratesetter and lend £1000 we both get £25 in our accounts.
With Zopa you need to lend £2000 but we both get £50 put in our accounts.
If you join Saving Stream then I'm sorry there's no kick-back for you, but you can potentially earn 12% interest here!

If you want an invite for Funding Circle (and £40 cash back when you lend £1000), send me a PM (private message) with your email address and I'll mail you over the link.

About these P2P Sites

Zopa and Ratesetter do consumer loans, Funding Circle loans money to businesses. If you deposit £1000 in any of these, then the companies will loan out the money to borrowers in batches of £10. So your risk is spread around 100 different borrowers. The chance of all 100 defaulting on the money they've borrowed from you is pretty small. Since 2009 I've only ever had 3 defaults on Zopa. So I've lost a maximum of £30, but it's been more than covered by the rate of interest I achieve from the other loans I have with it.

Saving Stream is a bit different, it's kind of an online pawn broker that does short term loans secured against boats and property. You can earn a very tasty 12% interest on these loans. The loans are secured against boats sitting in marinas, or against bricks and mortar, so even if the borrower defaults on their loan, you shouldn't lose out.

I've been in Zopa the longest, you can get around 3.7% if you lend money for 3 years and 5.2% for 5 years.

I'm getting 3.7% in Ratesetter for a 1 year bond, 4.8% lending for 3 years and 6.3% for 5 year loans.

I've only recently joined Funding Circle. It predicts I'm getting 7.4% after bad debts and expenses but it's too early to tell. That's still way more than the miserly 1.5% I'm getting on my bank savings account!

Both Zopa and Ratesetter have a contingency fund and guarantee your loans against losses, but Funding Circle doesn't. Funding Circle is part funded by the UK government's business lending scheme, so the government has a vested interest in making sure it doesn't fail!

Incidentally, if you need your money back early you can forfeit some interest to get your cash back right away (the loans are sold to other members).

Disclaimer: before saving with any of these organisations, be sure to do your own research. Don't put all your eggs in one basket - spread your money around different companies and asset classes.

And if you've got any questions about P2P lending or saving in general, then leave your questions below...

*These companies operate in the UK but Saving Stream is probably open to overseas investors. Zopa does have operations in the US and Australia. But you'll find that P2P operations are springing up in most countries now.
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