Just noticed today that the Zopa US Site has launched… I am not sure I like it…
The FDIC insured CD is a decent rate 5.1% (5.15% at Etrade is the highest 1 year CD I could find on Bankrate). But why would I reduce my yield just to help someone I don’t know?
So I tried to sign up for a $500 CD. No luck… Something broke. The error said they would get back to me. Oh well…
I just visited the Zopa site, since they launched today. Their concept is very different from Prosper and I can’t see myself putting any money in it.
Lenders get a 5.1% CD and then are asked ‘help’ a borrower by contributing a portion of their interest to help pay off the borrowers loan. The more you help the lower your APY. So by helping someone else you are reducing your own gain. That’s the complete opposite of Prosper (and Lending Club), where for some risk you get a better than CD rate and borrowers get a better rate than banks.
I’m astounded that Zopa went that way. I haven’t checked their cut-off for borrowers, but if Zopa set the credit limit high (A-C), then the only people who are really benefiting are Zopa and credit unions off the fees and rate spreads.
I thought Zopa was going to be the killer app of the P2P world, but apparently they are going off completely on their own.
Prosper continues to have only Lending Club as it’s competition.
The other sites, Microplace, Kiva, are charity sites.
Wow still stunned, if I want to reduce my income by helping others, I’ll contribute to organizations that’s tax deductible or at least helps a large group of people (Habitat for Humanity, etc).
Social finance is supposed to be a two way street.
I agree. But 5.1% is a decent 1 year CD rate. If I were interested in a 1 year CD I would think about a Zopa CD.