Wednesday, February 13, 2013

Don't Settle For Paltry Savings Account Returns...Become A Bank Yourself

Not since 5 or so years ago have we seen interest rates on savings accounts anything worth talking about.  According to, the average savings interest rate now is .12%, and supposedly we are in a recovery.  You are practically better off keeping your money in your mattress at that rate.  But, it doesn't have to be this way.  There are other alternatives to park your cash and invest it yielding much better returns.

For almost two years now, I have been using to juice my returns, and it has worked out well so far.  I am not going to quit my day job just yet, but it is helping me get there.  While individual experience on this site varies, Prosper boasts 9.69% returns, which is on par with stocks.  If you aren't familiar with Prosper, and other sites like it, it is a peer-to-peer lending platform whereby consumers have access to a pool of capital they may not otherwise.  Some, among many examples, are that they have less desirable credit ratings, want to consolidate debt, or are looking to start a business.  Banks aren't always willing to take a chance with the little guy.  Prosper is your chance to do someone a favor, and earn a great return, too.

With Prosper, as a lender, you can scan the list of available funding opportunities, narrow by your risk criteria, and invest as little as $25.  The $25 minimum is imposed to provide a broad, diverse array of opportunities to you, while minimizing risk.  Prosper is not FDIC insured, so you can lose money.  But, with a broad array of risk categories, while funding several loans overtime, you chances of loss are substantially reduced. Alternatively, if you need cash to consolidate debts, such as student loans or credits cards, Prosper is also an excellent means to do so.

There are a lot of other opportunities to earn a better return than banks will provide you as well.  In future posts, I will discuss my experiences with them as well.