Gen Y prefer one-month investing
Millennials and Generation X investors are driving growth in RateSetter’s one-month peer-to-peer lending market, while older investors prefer the three and five-year lending markets.
The peer-to-peer lender’s data showed that the one-month market was the most popular with it millennial investors, 72 per cent of whom have invested in this market since the company launched in 2014.
The one-year market followed in popularity, with 40 per cent of its millennials investing in this market over the last three years.
RateSetter chief executive, Daniel Foggo, said: “Far from wasting money on avocado toast, these young investors are seizing the opportunity to make their money work hard”.
“For a variety of reasons, they may want ready access to their money, so the one-month market gives them a stable, attractive return of around four per cent per annum and easier access to cash if they need it.”
Nearly three quarters (71 per cent) of Gen X investors have used the one-month market, with 51 per cent utilising the three-year market. Retirees preferred the three-year market, with 61 per cent utilising it, while 57 per cent used the one-month market.
The average amount invested in the one-month market has grown from an average investment of $3,777 two years ago to $11,483 today.
The research also found 56 per cent of the firm’s customers had moved money from a bank savings account to peer-to-peer lending, while 17 per cent had moved from domestic equities (shares), and 17 per cent from bank term deposits.