Money in the Bank

A good post on Prosper, the lending service that disintermediates banks from a loan.

In the US, whenever you deposit in a savings account or buy a CD you are indirectly loaning money to borrowers. The bank uses your capital to make the loans. But its better for you to loan to the bank - you are much more likely to be paid back, and your money is much more available if you need it. If a single borrower defaults the bank can still repay you. And even if the bank fails, the FDIC will cover you up to $100,000.

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Read more from this blogger: Prosper: peer-to-peer lending (long post!)