What you have to remember is that when lending on rate setter, you are not just a depositor, you are taking on risk to your capital, which you don't have as a bank depositor.
So its unfair to compare it to bank interest, you should compare it to bank dividends. which due to the franking credit pay higher than 6.5%.
As a depositor, the banks own capital + the non secured loans + the government guarantee all protect you, so you earn smaller interest rate because the bulk of the profit goes to those people who capital is at risk before yours e.g., the bank share holders and bond holders.
Rate setter allows you to earn more, because you are taking on more of the risk.
This being said I do have money in rate setter, and think its a good concept, it's just unfair to compare it a bank account.
