New Year’s Resolutions are notorious for being kept … for about 6 days. But there are several resolutions worth keeping this new year. One of them really should be to make your money work for you by earning more interest and by using more cash back programs.
Start earning more interest
There are a couple of ways to earn more interest this New Year:
- Invest in peer to peer lending
- Put your money into an online savings account
Peer to peer lending
Peer to peer lending with sites such as Lending Club is a great way to increase the amount of interest you’ll earn this year. With rates in the 9% range and better, you can certainly earn more on your money with Lending Club than with a traditional brick-and-mortar bank. There is an element of risk so be certain to understand who you’re investing in and make certain their FICO score or credit score meets your requirements.
Investing in Lending Club
The great thing about Lending Club is you can limit your exposure by allocating as little as $25 to an individual borrower. For example, if you’re investing $1,000 you can actually invest $25 into each of 40 borrowers, effectively lowering your risk of any one borrower going belly-up. At the moment, you can invest in Lending Club notes if you live in California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Louisiana, Minnesota, Mississippi, Montana, New Hampshire, Nevada, New York, Rhode Island, South Carolina, South Dakota, Utah, Virginia, Washington, Wisconsin, West Virginia, and Wyoming.
What if I don’t live in a Lending Club state?
If you live in another state, you aren’t out of luck. Lending Club has a secondary note program available for people wanting to cash out early. You can buy those secondary notes and they probably make a lot of sense since you can see which borrowers are keeping their commitment to repay their loans.
Online savings accounts
Savings accounts at brick-and-mortar banks currently have interest rates only slightly better than putting money under a mattress. Online banks, though not offering stellar rates, tend to outperform their traditional cousins by orders of magnitude. ING has rates at 1.10 percent (as of this writing) while my traditional banks savings rate is a paltry 0.25 percent.
If your bank account needs a little interest boost (admittedly not a huge amount), try going the online bank route. Personally, I’m thrilled with my online bank, ING Direct. By putting my savings into ING Direct, I earned 477 percent more interest than at my old traditional bank!
The next step is up to you!
Your money CAN work harder for you, you just have to give it the opportunity.