How Do Money Market Accounts Measure Against Prosper Peer-to-Peer Lending?
Money market deposit accounts usually offer higher interest rates than a regular savings account, but less than that of a high yield CD. A money market account offers more liquidity. You can generally withdraw funds up to 2 -3 times per month without penalty, depending upon the financial institution.
There are many positive reasons to have a money market account. They are usually FDIC insured and guaranteed not to lose money, much like their high yield CD siblings. But what if you aren't satisfied with their rates? At Prosper, through smart investing you may be able to earn a better return.
Please keep in mind that investing money through Prosper does carry risk. Potential returns on Prosper may be higher because our loans are more risky than money market deposit accounts, and aren't guaranteed or FDIC insured, so may lose value.
While this still doesn't represent a "sure thing" like a money market account, the risk may be diluted by diversification, and by taking on more risk the rewards may be greater.
Here's how peer-to-peer lending works on Prosper
After a borrower joins, we run a thorough background check and detail the information you need to know on our site. This includes the borrower's credit information, purpose of the loan, debt to income ratio and more. The borrower will also explain why he or she deserves your business.
Searching through this information may require a little more thought on your part than simply scanning aggregate sites like Bankrate.com for the highest money market return. But, the extra work and risk may be worth it to you.
If you are someone who invests very conservatively and prefers to let others handle your money, Prosper's money lending community may not be for you. However, if you prefer—or even relish—being more “hands on” with your investing, you may find our peer-to-peer lending to be very rewarding, both socially and financially.
Join us now and learn more. It's absolutely free and we will never share your information with others. Your privacy is extremely important to us.
How Does Prosper Work?
Prosper is America's leading online loans marketplace. Prosper's lenders can invest in loans, and get great returns by bidding on borrowers' listings. Prosper's borrowers can borrow money, and get great rates as a result of the competitive bidding. People-to-people lending brings everyone together.
Prosper lenders bid on listings and purchase Prosper Notes. Each Prosper Note corresponds to a listing which sets forth the relevant details about the loan, including loan amount, price, yield percentage, and borrower information. Any payment from a Prosper Note is dependent on payments Prosper receives on the corresponding loan.
The Notes that correspond to specific borrower listings are offered pursuant to the prospectus. Investors should read the complete description of the Notes and risks associated with making an investment in the Notes as well as other information about us and our platform in the prospectus.
Prosper Notes are risk bearing and speculative investments for suitable investors only. If a borrower fails to make payments on the corresponding borrower loan related to your Prosper Note, you will not receive payments on your Note. There is the potential that you will not receive any payments on a Prosper Note. You should review the Prospectus before bidding on loans. Not FDIC-insured. Notes may lose value. No Prosper or bank guarantee.
