Understanding the term of your investment

To make your money work harder so you don't have to it's important to understand the key features and terms around your investment. Or if you'd prefer a video explaining it to you rather than reading, jump over here to watch JB's 15 minute simple presentation.

Regular repayments  

Our Investors choose either an interest-only or principal and interest investment product, with interest rates between 6% and 8.5% per annum. Actual rates achieved are dependent on the investment product and term selected and the Investor bidding process. The available investment terms range from 12 months (interest-only) up to 7 years (principal and interest).  

Borrower repayments are made on a regular basis back into the Investor's Squirrel Money account (held on trust), ready for the Investor to reinvest or withdraw as a regular income. Repayment frequencies are determined by the borrower at the time they take out the loan and can be either monthly or fortnightly.  

The power to get your money out early - Secondary Market 

We get that sometimes things can change. We provide a Secondary Market which gives Investors the opportunity to seek to sell an investment at any time. The Secondary Market attempts to match investments made available for sale with other Investors who are happy with your existing investment terms and are keen to take it on. Please note that the Secondary Market relies on other willing Investors taking up the loans put up for sale. If no willing Investors are available, the original Investor may not be able to transfer their interests in a loan and may be required to remain invested in that loan for its full term. 

For more information on the rules that apply when selling an investment, read our Secondary Market Policy. For details about the fees associated with selling an investment via the Secondary Market, please review the Fees section of our website. 

Manage your investment anywhere, anytime

Once you’ve set up your investment entity in our platform, the Squirrel Money app will let you quickly and easily manage your ongoing investments. Manage. View. Stay updated. All of this power in the palm of your hand.

Download now from either the App Store or Google Play. 

For more information about investing with Squirrel Money download our Investor Booklet. Or watch JB's presentation here.

What sort of return can I expect with Squirrel Money?

Investors in the Squirrel Money platform have locked in an average investor interest rate of approximately 8.6% p.a. with investments made over 2, 3 and 5 years1. This return compares pretty favourably against the returns achieved across alternative asset classes in New Zealand. With products that offer regular repayments2, investments in Squirrel Money can be used as a source of regular income. The chart illustrates the repayment profile of a $10,000 loan over five years at an investor interest rate of 8.0% p.a.

The below table provides a summary of the indicative repayments an Investor can expect to receive across two $10,000 investments.

  • The first investment is into a 5-year amortising term loan at an investor interest rate of 8.0% p.a. (before tax). This investor receives both principal and interest repayments from the first month;
  • The second investment is into the 1-year interest only product with an investor interest rate of 6.0% p.a., that transitions into a 5-year amortising loan at the end of the first year with an investor interest rate of 8.0%. 

How a 5 year principal and interest loan (investment) repays 3

Example of Investor repayments

Investor repayments Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Total
$10,000 Investment (amortising for 5 years with 8.0% interest)

Interest

Principal

Investor repayments

$739

$1,694

$2,433

$598

$1,835

$2,433

$447

$1,986

$2,433

$281

$2,152

$2,433

$102

$2,332

$2,434

$0

$0

$0

$2,167

$10,000

$12,167

$10,000 Investment (interest-only for the first year at 6.0%, then amortising for 5 years at 8.0% interest)

Interest

Principal

Investor repayments

$600

$0

$600

$739

$1,694

$2,433

$600

$1,833

$2,433

$446

$1,987

$2,433

$281

$2,152

$2,433

$102

$2,332

$2,434

$2,768

$10,000

$12,767

1The investor average return is pre-tax and is current as of 30 June 2018. The investment product mix within our active loan book changes over time and the average return will also vary depending on that mix and the investor bidding process. Investor returns are lower than the interest rate paid by a borrower due to the Service Margin paid to Squirrel Money (between 1.0% - 3.0% p.a.) and the applicable Reserve Levy. Investor returns can vary between investment products and terms.

2Repayments can be monthly or fortnightly and are determined by the borrower in the loan that Investors investment orders are matched to. The product invested in will dictate whether your investment is principal and interest immediately, or whether there is a preliminary interest only period.

3This illustration is indicative only and assumes no pre-payment of the loan by the borrower, monthly repayments with all borrower repayments made when scheduled or the Reserve Fund is sufficient to cover any borrower arrears. Repayments may be at other regular intervals based on the terms of the loan.

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