Steadfast FinancesTaking Advantage of Lending Club's 1.5% Cash Bonus on Recurring Deposits

Taking Advantage of Lending Club’s 1.5% Cash Bonus on Recurring Deposits

Filed in Investing 101 , Peer to Peer Lending 2 comments

Being a lover of free money, and who isn’t, I’ve decided to capitalize on Lending Club’s 1.5% cash bonus offer on recurring deposits.

Lending Club’s Recurring Deposit Bonus Details

  • Earn 1.0% cash bonus on recurring monthly deposits of $200 to $499 per month.
  • Earn 1.5% cash bonus on recurring monthly deposits of $500 or more per month.
  • Schedule and maintain a recurring transfer of more than $200 a month.
  • Invest your transferred funds within 60 days of the transfer.
  • The bonus will be paid on a trailing three-month basis on or before the 15th of the month.

(The enrollment image pictured above will be posted in your account summary page.)

The best part, aside from earning a 1.5% cash bonus in 60 days or less, is the rate of return on the cash bonus is equivalent to, or slightly higher than, interest rate returns for so called “high yield” savings accounts. For example, my ING Direct account is only paying around 1.1% at this time.

Granted, investing in a P2P lending account, such as Lending Club, isn’t anywhere near as safe as keeping your cash in a FDIC insured account. But once you’ve found a Lending Club investment strategy that works, an additional 1.5% cash bonus on top of earning 14% to 15% NAR on your Lending Club investments is a pretty sweet deal.

Let the E*Trade Baby beat that!

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Posted by CJ   @   14 September 2010 2 comments
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2 Comments

Comments
Sep 17, 2010
6:12 am
#1 Joel M :

Hi Matt … I was wondering if at some point you might do one of your notoriously insightful posts on LendingClub’s secondary note trading platform (https://www.lendingclub.com/foliofn/faq.action). As a recent transplant to new jersey, I can no longer trade notes directly :-( however, the note trading platform is available to me and I’d love to hear your thoughts on it.

Sep 17, 2010
2:48 pm
#2 Matt SF :

Joel,

I honestly haven’t tried the secondary Lending Club platform yet. I’m doing my best to be a buy & hold LC note investor, so I haven’t set up my FolioFN account fearing I’d be tempted to liquidate notes at the first sign of trouble.

However, if I were buying secondary notes on FolioFN, I’d keep my eyes open for sellers who want to break even on their notes, rather than sell at a premium. I’ve read cases where investors have a solid track record of picking notes that pay off in full, but will charge a 1% to 5% premium. Considering 1%-5% can eat up your profit margin, you’re not left with much ROI after fees.

I’d also be wary of buying notes “at a discount” that are 30+ days late or borrowers whose FICO has taken a hit. It might seem like a good deal, but like many things selling at a discount, it’s discounted for a reason.

Wish I could be more helpful Joel. Best of luck!

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