WHERE TO FIND THE BEST CD INTEREST RATES

You are probably here because you have extra money to invest. The stock market for dummies is risky right now and if you are interested in an alternative with a good return for some of your money, you might look into something called "social lending".

You can get the best interest rates at Lending Club by investing in prime borrowers. Now if you want to get the best interest rates on CDs or bonds, you are going to get a whole 1% or 2% interest at the most right now. Something very low at least that is hardly worth the trouble. This is where peer to peer lending comes in where people like you and me with money to lend are matched with people who want to borrow it at higher rates than you could get at a bank.

Lending Club is one of the big "people to people" lending companies online where you will get a much higher yield on your money than you could anywhere else. In this scenario, you are really acting as a bank and lending out money to people who need it. The Lending Club is the platform that lets the borrowers and lenders come together and work out a deal where both parties benefit.

Here is an example of how the Lending Club website works. If someone needs $10,000 to finish school and is having trouble getting a load in the traditional ways, they can come to Lending Club. If they have a good credit score of greater than the minimum FICO score of 660 and debt-to-income ratios not higher than 25%, among other good credit indicators, they might qualify for the $10,000 loan. They will see what rates they qualify for if accepted and then list their loan request on the website being careful to do a good job explaining their situation and why they need the loan. If you decide to lend money, it is really like you are giving the borrowers unsecured loans as all you are going by is their credit rating and history with Lending Club. There is no collateral put up by the borrower and you have only their good word and particular circumstances to make a your judgment off of.

Once the loan request is listed, thousand of individual lenders like you and me will see the loan and make decisions on whether they would like to loan money to this person. Each lender will evaluate the loan request and decide how much, if any, they want to loan. In the final analysis, this $10,000 loan may be funded by 10 people or hundreds of people combined who all have small parts of the loan!

Loaning money to what they call "prime borrowers" does not come without risk and it is up to each lender to only lend to the people they feel are the best risks and have the most chance of repaying the loan. The reward for this risk, though, is usually a return of between 6.7% and 19.37% which is much greater than you can get anywhere else. If you have some moeny in the bank just sitting there getting that 1%, it could be an option to give Lending Club a try. Of course it is best to be safe and you should never loan money in this fashion that you absolutely need to live on.

Disclaimer: I have not tried peer to peer lending.

NO RISK CDS - $250,000 FDIC INSURANCE EXTENDED THROUGH 2013

May 20th, 2009 saw President Obama extend the $250,000 FDIC insurance you get on your bank CD's through 12/31/2013. You can read about it here at the official FDIC website.

This is good news for anyone who has money to invest in certificates of deposit and anyone looking for a no risk CD. Finding a place to put your money now days that is safe is very hard and thankfully the FDIC insurance was extended. Let's hope that it is extended even to a later date than 2013 and for more as inflation is eating away at everyone's money.

There still is a problem though with exactly how the $250,000 is calculated. On this page of the FDIC website it does seem to explain the limits quite clearly for joint accounts. However there are many different scenarios you can have with individual accounts and joint accounts and people want to be absolutely sure their money is guaranteed by the government.

If you have a combination of individual and joint checking, savings, and CD's like I do, you want to be sure you are covered up to $500,000 for two people. The problem is, I have gotten mixed answers from several people. The person at my bank said she believed my wife and I were covered up to $500,000 but she wasn't ABSOLUTELY sure. I then asked my stock broker and he said much the same thing: that we each get $250,000 so as long as we stay below $500,000 in each institution (not that we have that much) we should be alright. Again though, he wasn't ABSOLUTELY sure of it.

This is like everything else that comes from the government: it is confusing for a normal person to understand and the professionals who should know, don't. If you are looking for the best interest rates on CDs you also need to know what limits you are covered for and all the minute details that really could become a factor if the economy doesn't make a recovery. It is frightening all the mainstream big names banks that are in trouble right now and guaranteeing the safety of your hard earned savings is paramount.