The stock market offers a good potential return of your investment dollars but with lots of risk. You could invest your money in the bank, (via money market account, CD’s, or saving account) which comes with no risk at all but with interest rate so low — not much return either. So how are people making 20% on their investments these days? By lending money to Internet neighbor through sites like Prosper.com. It’s called Peer to Peer lending or Private borrowing.

People are skipping the bank and lending and borrowing money from other individuals. Sites like Prosper.com are web lending/borrowing sites where the two meet to exchange funds with no banks.

Peer to Peer Lending and Private Borrowing

Borrowers (Private Borrowing) – Tell your story (why you need the money)

Lenders (Peer to Peer Lending) – Read the borrowers’ story and decide whether to lend the money.

When borrowers and lenders agree on a rate the loan is made.

Some lenders reduce the risk by lending small amount to multiple borrowers.

What do you think about Peer to Peer Lending?

What do you think about Private Borrowing?

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Internet only banking can score you a higher interest rate. In days long gone you could yield 4% – 5% from Internet only banks. Now a day, you can expect 1.75% – 1.00%, which is better than the interest rates of traditional banks. Following is a brief write up of a few Internet only banks:

Internet Only Banks

• ING Direct
• EverBank
• WT Direct
• Ally

Internet Only Banking With:

ING Direct – the current interest rate at ING Direct Orange Savings Accounts is 1.4%

Internet Only Banking With ING Direct

EverBank – the current interest rate at EverBank is 1.77% with a 3-month introductory rate of 2.51%

WT Direct – the current interest rate at WT Direct is 1.66%.

Ally Bank – the current interest rate at Ally is 1.75%.

Internet Only Banking with Ally Bank

The interest rates listed above were posted as of 9/7/09 on the various bank’s sites. Interest rates changes are frequent, to get the current BEST interest rates check out “Current Interest Rates“.

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I’ve been banking with ING for a while now. Today, starts the upgrade to the ING Electric Orange features. This upgrade will be in process from Thursday, July 23rd until Sunday, July 26th. During this upgrade period some features will not be available like:

• Using the Address Book
• Sending Paper Checks
• Access to the Bill Pay Features

However, no pain / no gain. Here’s what the ING Electric Orange savers have to look forward too:

• A face-lift to the bill pay screen with easier navigation
• eBill, which is how you can receive electronic bills verses paper bills
• New sorting features
• All-in-One screen features like — make a payment, review pending transactions, and edit biller info
• Email reminders
• Multiple recurring payment options

What to have a sneak peek — go to ING’s Demo Preview

If you are not an ING customers/savers here is a brief overview of the ING and their online ways to save:

ING Select Banking Products:

• Orange Home Loans, which is ING’s Mortgage product to include Easy Orange and Orange Mortgage
• Investing, which ING offers accounts with ShareBuilder, and accounts for kids
• Orange Savings, which includes Orange Savings account (current interest 1.4%), Electric Orange Checking account (current interest 1.65%), and Orange CDs (12 mo at 1.5%). To keep up-to-date with interest rate changes go to ING Rates at a Glance.
• Retirement, which is ING’s IRA
• Orange for Business, which includes Business Savings Account (current interest 1.25%), Business CDs (current interest 1.5%), and ShareBuilder 401K

ING is a FDIC insured bank.

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Do you use your bank’s automatic bill pay service to pay your bills online? Despite, the popularity of automatic online bill payment systems — over half of Americans still write checks. I’m included in that population, although I do have an account with ING which is an online bank. In 2008, online automatic bill paying increased — over 3.3 billion people used automatic bill paying service to pay their bill online. One great feature about paying your bills online is the one time set-up. Meaning, you set-up your account to pay your car note (an example, with a fixed amount). Every month your car note payment will be automatically withdrawn and sent to the creditor. Nice, right? On the other hand, you must make sure your account has enough funds each month to cover your automatic withdrawal, or you will be bounces checks all over the place.

The advantages of automatic bill paying is obvious. To pay your bills online you don’t need stamps, envelops, and you avoid any late fees. The advantages of automatic bill pay can save you money in the long run, and give you peace of mind. However, there are disadvantages to automatic bill paying. One disadvantage discussed above is “bouncing checks” or what banks call overdrafts, which usually result in a penalty fee. Another disadvantage is for the lazy bookkeeper. Overcharges can happen, if you are using automatic bill paying services you should still reconcile your account each month to make sure everything is correct.

If you like the sound of automatic bill paying here are somethings you should do:

• Pay attention to your account
• Be selective – I would use a bank service, your bank primary. And on the creditor side, I would only pay creditor with monthly statements
• Keep a paper trail
• Print out the directions on how to stop the automatic bill paying — just in case something goes wrong

Did you know that you can use your credit card to make automatic bill payments? Well, you can. Using your credit card for automatic bill payments gives you about 30 days to correct any problems and your credit card statement can serve as you paper trail. However, went you use your credit card for automatic bill paying you should pay off the balance each month to avoid any interest fees.

Automatic Bill Pay

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