Fruitful Finance Review – Earn 6% interest on your savings!

To some, saving money comes naturally. There are a lot of people who can keep parts of their income in a separate account and save it for a rainy day, which is great. Having an emergency fund should be your No.1 priority before you even think of tying any of your money up. However, not everyone finds it easy to save and not everyone has the income that allows them to put money away.

A lot of British citizens rely on Buy Now Pay Later apps such as Zilch just to help them make ends meet or to afford large purchases, making it extremely difficult to save any of their income.

In this current low-interest-rate environment, savers have been the worst hit and people who take out loans are appreciating the low-interest rates. Many savers are beginning to feel ‘defrauded’ with the bank of England’s base rate which is at a record low of 0.5% and has been for the past 6 years. They are beginning to remove their money from one bank and give it to another, to make the most of more beneficial terms. When choosing a bank, remember that if it is a business account you’re opening, choose a merchant bank but if the account is a personal one go for a commercial bank instead. For more information on the differences between these kinds of banks, take a look at this commercial bank vs merchant bank analysis. There are many other things to consider when choosing your new bank too.

In years gone by, people would have had no choice but to put their savings in low-interest-rate high street bank savings accounts. But thankfully for them, technological advancements in the personal finance field in the past few years have given savers an alternative means to save money – one that offers a far higher rate than high street savings accounts. When it comes to finances, many people want to find ways to manage it a lot better, especially as it can be so easy to spend money here and there. Saving money will benefit people when it comes to becoming financially stable over time.

Leading personal finance advancement has been crowd-funding or peer-to-peer lending (p2p). Crowdfunding has to lead to people getting a higher rate of return on their savings than if left in the bank. There are many different crowdfunding websites and each has its own merits you can read an article I wrote detailing the different platforms here . In this article, we look the new kid on the block – If you have a business and would like some financial assistance to help your business grow then you may want to check out an outsourced CFO to support you with completing a strategy to maximize profitability and overcome financial challenges. This will be great for business as you can prepare for growth and save more money.

The rate on your savings?

Fruitful opened its doors for business in November last year and it offers you a rate of 6% on your savings. This is a very high return in this low-interest rate environment. Fruitful has promised to always give a return of 5% + the bank of England base rate, so if the interest rate rises, the return you get on your savings rise as well.

How is this rate of interest possible?

This is the first question you might ask yourself as I did the same. When something is too good to be true, it normally is. Thus, I went about doing my research to find out how they generate money to pay this kind of interest.

Fruitful lends your money to businesses that need a mortgage. This is a particularly niche area and I believe Fruitful are the first UK crowdfunding website to target the business mortgage market. Because business mortgages are specialist products, not many financial service firms offer them. This in turn means that the rates of return for business mortgages are higher and they typically cost around 7% at the moment. Thus by lending to businesses, Fruitful is able to offer you a higher interest rate on your money.

How it works.

Fruitful gathers money from a vast array of savers like you (the crowd) in order to loan out to businesses who seek a mortgage on the property they wish to buy.

Although they are other mortgage crowdfunding websites around, Fruitful is the first specialist business crowdfunding platform in the UK. So unlike other peer-to-peer lending platforms where you set your level of risk or choose individual loans you wish to fund, with Fruitful, once you put your money on the platform, that’s all you have to do. The team takes care of the rest and they will match your savings to different loans.

How risky is it?

I am a firm believer that any peer-to-peer lender exposes you to greater risk than the typical establishes high street bank. But because of this higher risk, you are rewarded with a higher rate of interest.

Fruitful states that all its loans are backed up by real bricks and mortar. So even if the borrower goes bust, fruitful will be able to recoup the loan, or most it, by the sale of the property the loan was secured on. Fruitful has even gone the extra mile to get itself FCA regulated.

But, like all other peer-to-peer lending websites, Fruitful is not covered by the Financial Services Compensation Scheme(FSCS) and thus there is no protection of money invested. This means that the government will protect none of your money if the company were to go bust, unlike a bank account where the government has up to £85,000 per account holder covered if your bank were to go bust.
As a rule of thumb, don’t invest more than 10% of your savings in non-regulated types of lending.

Why Fruitful as opposed to other Peer-to-Peer platforms.

  • More ‘bang for your buck’ for a given level of risk by – With Fruitful, your savings are secured against actual mortar whilst on other platforms you don’t know exactly where your money is going. I for one am more confident if my money is lent out against bricks and mortar than against businesses as the former offers less volatility and risk.
  • Get the same great returns irrespective of the amount you save and your timescale – Some banks or peer-to-peer platforms only offer the best rates to the savers with the most money but this is not the case in this instance. Furthermore, other peer-to-peer websites like Ratesetter only give you the best 6% annual return if you save for a minimum of 5 years. With Fruitful, you get this 6% return for whatever period you wish to save. I like this no discrimination policy as it helps small savers such as myself.
  • No Fees – Fruitful does not charge you a fee for saving your money with them. Websites like Funding Circle charge a 1% annual fee and a 0.25% sale fee. Having to pay someone to keep my money does not make financial sense to me and that is why I would prefer to save on a platform that has no charges.
  • Ease of use – The Fruitful website is easy to navigate and the ease of use of its platform is what has tempted me to save with them. What makes my experience even better is that the Fruitful team chooses who to lend my money to and thus unlike other platforms, I don’t have to worry about picking individual borrowers to whom I should lend to. Fruitful also has a canopy fund meaning that you will always get paid even if they don’t get paid for whatever reason – this alleviates a lot of the stress associated with peer-to-peer lending.

Withdrawing your money.

One of the best parts about fruitful is that it has a Zero lock-in period which allows you to withdraw money at any time you like. This goes against high street lenders where you have to have a lock-in of 2 to 5 years to get the best rates.

Fruitful also does not charge you to withdraw money. The withdrawal process is simple and it just involves a click of a button online and you will get your money in 7 days.

My experience so far.

I joined Fruitful when it launched in November. I was initially on a waiting list as they were taking on savers in batched and after around 2 weeks, I was finally allowed to open an account. The process of signing up was relatively straightforward. Once signed up you need to pay in a minimum lump sum of £250 to start earning interest. If you are depositing £5,000 or less you can simply do this by using your debit card. For amounts greater than £5,000 you will need to log on to your online banking and send the amount to the Fruitful bank account with a specific reference number you are given.

You will start earning interest from the day your money hits your Fruitful account. The interest is paid monthly and this is great as the effects of compounding work are even better. So if you invest £5,000 on 1 February 2015 this will grow at 6% pa (0.5% a month) over the next month so on 1 March 2015 you will have £5,025. Over the next month, interest will be calculated on the £5,025 and so on 1 April 2015, you will have £5,050.13 in your account.

Whenever I buy into an investment such as this, I always look to take out a chunk of money to see how fast they pay and just to see if it’s not another Ponzi scheme. I withdrew £750 last week and within 5 working days, the money was in my account.

Fruitful looks like a good alternative to high street savings accounts – and it should be treated as just that, an alternative for part of your savings and not a complete replacement. Only time will tell if crowdfunding websites like Fruitful are going to shake up the entire saving industry and be a force to be reckoned with. But for now, Fruitful looks like a great place to save a portion of your money if you are annoyed by the paltry interest you receive from high street banks.

10 thoughts on “Fruitful Finance Review – Earn 6% interest on your savings!”

  1. I have come across Fruitful but was debating on whether to give it a go. The 6% rate does seem high and as you mention does sound too good to be true. Might dip my toe in with the minimum £250 and see how it goes.

    • I’ve been using Fruitful for almost 4 months now and all the interest payments have so far been on time. Worth giving it a go but never invest what you can’t afford to lose.

    • Hey, can you please let me know what web browser and device you are using and I will see if I can fix the problem. Thanks

    • Hey Praveen. On the website it states that “anyone over the age of 18 can open an account. However, If you live outside the UK, please ensure you are not breaching any laws in your country of residence.” So it appears as though you can open an account but make sure you declare income for tax purposes in your country of residence.

  2. It’s just over one year later. Do you still have your money with Fruitful? Have you made a sizeable return or loss? Are they still as good as they appear? is this a long or short term plan? Sorry I have a lot of questions but I am super New to idea of passive income.
    many thanks helen

    • Hey Helen,

      Fruitful has actually closed down. The company took a different direction and is no more taking investments from individual investors. But I am glad to say that Fruitful was totally honest to investors about this and kept me up to date at all times. They have paid me back all the money I invested in them including all the interest, so I made a profit. Sure wish they would have stayed open longer as they had really good rates.

      There is a new sister company called Fruitful homes ‘’. I have no idea how good they are as I have never used it. Some of the people that are involved with Fruitful homes are ex employees of the original fruitful but besides that, I don’t have much information.

      If you are interested in passive income, read my articles on ‘ ‘ and ‘’

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