I’ve been planning on writing this post for quite a while but I hadn’t found the time for it before now. I’m not normally one to write reviews or give recommendations lightly but after suffering from terrible savings rates for such a long time, I felt like this might help someone else facing the same problem.
It all started a while ago when I was searching for somewhere better to put my savings instead of the traditional high street banks. I have lost much of my faith in them as institutions I can trust and I was on the hunt for an alternative that would give me a return I deserved.
I read this review of Zopa and it convinced me of the virtues of lending my money to other people through what is known as peer-to-peer lending. In essence, it just cuts out the middle man, so instead of putting your money in a bank and them then lending it to people and businesses, you just do it yourself.
But what I didn’t realise is just how many people your money gets spread among. This gave me confidence that my risk was actually very low. The clincher was when I found out about the fund that Zopa keep to compensate people when a borrower defaults. In other words, you are virtually certain to get your money back no matter what.
Ok, hands up, I should point out that savings in Zopa are not covered by the government’s guarantee but if you actually take a look at their repayment rates, they are as good, if not better, than those of high street banks.
Anyway, it’s been over 12 months since I transferred a good chunk of my savings into Zopa and I’m receiving an interest rate of just over 5% although this is because I don’t mind keeping my money there for 5 years (I’m saving for the future anyway).
I don’t know about you, but finding 5% at high street banks is hard. I mean, there are some current accounts that give you this for the first couple of grand in your account but I’m talking about tens of thousands of pounds in savings and seeing as this is for my retirement in 12 years time, I need a good rate of interest on all of it.
Anyway, I’m going on a bit now when all I really need to say is that you should take a look at Zopa and read through the literature on their website. Make sure you are comfortable with how it works and then I’d advise that you use it for your savings going forward.