Saving Stream lifts the lid on high interest rates
Have you noticed how low the interest rate is for your savings account?
Yours may differ slightly from mine, but for too long our savings have been earning interest of about 0.01% (I’m serious!). As you can imagine, that makes little difference to the savings balance.
This Saving Stream review is for you!
Regularly check your finances, and regularly compare your Bank account’s small-print against other accounts.
After all, you could be missing out on a more beneficial or higher interest rate just because you didn’t bother to look. Perhaps put some time aside this weekend to check your bank accounts’ features, or arrange to chat with an FCA adviser. They’ll explain how any financial decisions could impact your circumstances.
What features should a good savings account have?
Ok, so now that you’re looking to find a higher interest rate savings account, these features are a good place to start:
- high interest rates (obviously!)
- easy short term or long term access
- good financial security
- good reviews
- FCA regulation
You may want to consider whether a crowd funding/peer-to-peer lending platform is a suitable alternative for your circumstances. Perhaps if the available bank accounts don’t offer high interest rates, but there’s a crowd funding/peer-to-peer platform which has excellent financial stability, excellent reviews and an excellent track record, it could be a viable option for you. But always consider your own financial circumstances.
Of course, past performance doesn’t guarantee future performance.
For our family, crowd funding/peer-to-peer lending was an option to use which is why I’ve written this Saving Stream review. There’s a list of alternatives below, if you’d prefer.
Saving Stream’s high interest rates
Saving Stream review
Saving Stream is a trading name of Lendy Ltd which is a UK-based company, regulated by the FCA. It was launched in 2013 and already has over 2,000 investors signed up to its online crowd funded investment platform.
Saving Stream lends against property purchase, refinance and refurbishment, commercial property loans and raising capital, as well as assets such as vehicles, boats and aircraft.
The FCA insists that authorised crowd funding platforms must have a minimum of £20,000 in capital, and strong plans in place for collecting loan repayments in the event of default. Reassuringly, Saving Stream’s contingency plans exceed the FCA’s requirements, by having:
- as at March 2016, a provision fund (to compensate lenders if disposal of the security fails to accrue the loan value) of £1,929,586, and a live loan book balance of £96,479,283 against security held of £178,870,000. The provision fund balance increases each time a new loan is provided, by a percentage of the loan fee being deposited; and
- loans are checked for credit worthiness, secured against property with a legal charge, and have a purposefully low maximum LTV (70% for property and 50% for vehicles, boats and aircraft). This means that if the borrower defaults, it’s very likely that the sale of the asset would raise sufficient funds to repay the crowd funding plus any interest owed.
Using the Saving Stream website
The registration and funding process is very straightforward and quick to review. Saving Stream’s website’s well designed, and it’s easy to switch between tabs to see the information listed for current, pipeline and repaid loans. This helps you make an informed choice as to which loan(s) you’d like to fund – but do speak to an FCA registered financial adviser for further guidance, as necessary.
All property’s valued by a professionally qualified chartered surveyor. For those of you who like to know more about the asset you’re investing in, a redacted valuation report is often available with a short description of the borrower’s requirements.
There are no fees to pay and the minimum investment is £100 (interest accrues at 12% per year, which is tax-deductible according to your financial circumstances). Your money is held in a separate client account with Barclays Bank plc until you choose to fund any loan(s).
Saving Stream sends weekly email updates of each loan’s progress, as well as emails (and texts, if you choose) whenever a new loan becomes available for investment.
What’s it like using Saving Stream?
I’ve enjoyed using Saving Stream. Just like any other savings account, you can choose how involved you want to be – reading the weekly emails and/or logging-in to Saving Stream on a regular basis to find out more about your loan(s)’ position.
It’s helpful that Saving Stream provide background information about available properties to loan against, so that we can make an informed choice when deciding which one(s) to fund. As well as providing a full breakdown of all monies received, invested and repaid, together with interest amount earned, Saving Stream also has a page showing the total amount invested and interest accrued for use when contacting HMR&C to arrange payment of any tax.
Of course, I also like seeing my money accrue on a monthly basis with the high interest rate; something which is pretty much negligible to track with the banks. Although I’ve not yet needed to withdraw any money, the system to do so appears quite straightforward and the reviews suggest that it’s an easy, quick process.
You can join Saving Stream via its website, or via this << Saving Stream link >> to start earning 12% interest per year.
As mentioned, there’s always an element of risk involved with crowd funding/peer-to-peer lending, so do chat with your FCA adviser if you have any queries.
Other types of savings accounts
The list below represents some of the savings accounts that I researched, as at March 2015. I didn’t choose these, mainly because the interest rates weren’t very high.
Of course, there are other factors to consider when deciding which high interest rate savings account is best for you – such as financial stability, investment amount etc …. and that’ll be for you to consider.
Financial packages change often, so do check the relevant websites and user reviews for more information and current interest rates.
Banks and Building Societies
|Type of account||Provider||Annual rate of interest||Comments|
|Instant access savings account||Virgin Money|
|1% to 1.25% |
(dependent on which provider you choose)
|These interest rates are currently above average for most banks/building societies.|
|Easy access ISA cash savings account||Halifax|
Royal Bank of Scotland
|0.5% to 2%|
(dependent on which provider you choose)
|These interest rates are currently above average for most banks/building societies.
Not all banks/building societies (eg, The West Brom) offer this type of account,
Crowd Funding and Peer-to-Peer Lending
|Types of account||Provider||Annual Interest Rate||Product type loaned against||Comments|
|Peer-to-Peer||Landbay||4.2%||Residential buy to lets||Free to withdraw funds during loan term, as long as loan amount is re-allocated to new lenders.|
|Peer-to-Peer||Ratesetter||2.4% to 5.9%||Ordinary people with checked credit worthiness||Interest rate varies according to length of loan term. Fee charged and interest rates lowered if withdraw funds during the term of the loan.|
|Peer-to-Peer||Wellesley & Co||3% to 6%||Property developers||Interest rate varies according to length of loan term. Free to withdraw funds during loan term, as long as loan amount is re-allocated to new lenders.|
|Peer-to-Peer||Funding Circle||6.5%||All types of businesses||£20 minimum investment.|
|Peer-to-Peer||Assetz Capital||9%||All types of businesses||£1 minimum investment. Auction process for each loan funded. Investors provide details of capital amount and rate of interest to be charged.|
|Crowd Funding||Kickstarter||N/A||All types of new creative projects, such as films, games, and music to art, design, and technology.||Kickstarter explains that "Backers are supporting projects to help them come to life, not to profit financially. Instead, project creators offer rewards to thank backers for their support."|
Note: this review is a general resource and does not constitute professional advice. PeasOnToast.co.uk is not authorised by the Financial Conduct Authority with whom you should seek financial advice.
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