Money Market Accounts - Prosper
Invest  >  Online Investing  >  Money Market Accounts

How Do Money Market Accounts Measure Up Against Prosper's Peer-to-Peer Lending?

Money Market Accounts

Money market deposit accounts usually offer higher interest rates than regular savings accounts, but less than that of high yield CDs. A money market account, however, offers more liquidity than a CD. 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 using Quick Invest, which allows you to save time and diversify your investment—and by taking 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—the investor—need to know. 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 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 peer-to-peer money lending marketplace 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.

How Does Prosper Work?

Investors create an account, set their parameters, and purchase Prosper Notes. Each Prosper Note corresponds to a listing which sets forth the relevant details about the loan, including loan amount, Note rate, yield percentage, and borrower information. Any payment from a Prosper Note is dependent on the payments Prosper receives on the corresponding loan.

The Notes that correspond to specific borrower listings are offered by 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 the Prosper model 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 investing through Prosper. Not FDIC-insured. Notes may lose value. No Prosper or bank guarantee.