How to Earn 80 Times More on Your Savings

Photo by Daniel Jedzura / Shutterstock.com

Does the measly interest rate you earn on your bank account make you feel a little cheated? You are not alone! The national average interest rate on savings is a measly 0.06% according to the FDIC. But here’s the good news: There’s an alternative that allows you to make 5% interest and help your community at the same time.

Here’s how it works: You buy 36-month Worthy bonds for just $10 each. Your money is loaned to small businesses through a peer-to-peer system, also known as P2P lending. Small-business owners using this system gain access to capital, and you earn 5% on your investment.

Not only that, but you can set up an app to make regular, automatic bond purchases, or funnel your spare change into this investment in small increments as you make purchases — which allows you to invest money that you will hardly miss. (We’ll explain how that works below.) What it means is that we ordinary mortals, with ordinary amounts of money, can get in on returns that are usually the domain of wealthier people.

“We created an alternative way for people to save that not only pays 5% interest but helps support growing businesses across the country,” says Sally Outlaw, founder and CEO of Worthy Financial. “Ultimately, I want to help as many people as possible have a more secure financial future.”

Worthy bonds are an investment for the masses, not just the wealthiest 1%, Outlaw says.

“It’s about time we have access to the types of institutional-quality investments that the wealthy have always had, so we too can see some real financial growth,” she says.

Think about it: If you invest $1,000 in Worthy bonds paying 5% interest, you’d have $1,050 after a year. If you put that money in a typical bank savings account paying the national average interest of 0.06%, you’d have only $1,000.60 at the end of the year.

How to get started

One easy way to invest is by using the Worthy Financial app available through Apple’s App Store or Google Play.

Link the app to your bank account or credit card — Worthy then will track each debit or credit card transaction you make and round up the total to the next whole dollar, keeping track of the resulting “spare change.”

Worthy’s example: If you purchase a bottle of water with your debit card for $1.39, Worthy tracks the 61 cents difference between the purchase and the next whole dollar. The next day when you fill up your gas tank for $24.20, again Worthy tracks the 80 cents difference from the next whole dollar. So far, Worthy has tracked $1.41. As you go about your spending, Worthy keeps tracking your “spare change” and shows it to you on the app’s dashboard. When the “spare change” adds up to $10, it triggers the purchase of a $10 bond, which earns 5% interest.

Despite the bond having a 36-month term, you can cash out at any time with no penalty.

You don’t have to wait for the spare change to add up to buy a bond, either.

You can buy as many bonds as you like at any time, Worthy says. You can even set up recurring purchases to put your bond investments on autopilot.

Besides using the app, you can also make transactions on your computer through the Worthy Bonds website.

Where your money goes

Worthy Peer Capital, a Worthy Financial company, invests all bond sale proceeds into fully secured, asset-backed, small-business loans made to creditworthy, mostly veteran-owned firms.

In $25 increments, Worthy invests in fractions of loans to qualified borrowers who use online financing marketplaces rather than banks.

The Worthy loans typically offer more competitive rates for borrowers while offering you, the investor, a higher rate of return.

That’s the kind of action usually reserved at a grand scale for investors trading on Wall Street, Outlaw says.

Corporate bonds traded on Wall Street are issued by companies to raise money for themselves. With Worthy, the smallest investors can benefit from strong returns usually reserved for institutions and the wealthy. Also, stock market volatility won’t impact your investment return.

While your money is at risk if borrowers don’t repay their loans, the bonds are backed by a reserve fund that holds money aside in the event of unexpected losses, Worthy says. This fund is designed to give you your full return.

Important reminder

Worthy reminds investors that it is not a bank and that investments in Worthy bonds are not bank deposits, nor are they insured by the FDIC. They have received regulatory approval from the Securities and Exchange Commission, Outlaw says.

“You should be comfortable with your understanding of the investment and its risks,” the Worthy website says.

Outlaw says she created the bonds so as many people as possible would have access to higher-yielding, community-based investments.

“I think everyone is worthy of economic security, and if we can help provide this, while offering both a financial and a social return, it’s a home run,” the Worthy CEO says.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
5 Ways Social Security Will Change in 2021
5 Ways Social Security Will Change in 2021

These adjustments will affect both workers and retirees in the new year.

5 Ways Your Phone Can Slash Grocery Costs
5 Ways Your Phone Can Slash Grocery Costs

These free apps and websites can help you get cash back on groceries, shop more efficiently or squeeze the most from the ingredients you have on hand.

Could You Give Up These 7 Expenses to Save Thousands of Dollars a Year?
Could You Give Up These 7 Expenses to Save Thousands of Dollars a Year?

You could save more than $30,000 by setting aside these costly expenses for just one year.

How to Fix 6 Common Retirement Mistakes
How to Fix 6 Common Retirement Mistakes

Here’s how to strengthen your nest egg before or even during your golden years so these missteps don’t ruin your retirement.

36 Things That Will Be Obsolete Soon
36 Things That Will Be Obsolete Soon

The writing is on the wall for dozens of things we have grown up with.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
9 Mistakes Everyone Makes When Shopping on Amazon
9 Mistakes Everyone Makes When Shopping on Amazon

Are you losing money due to any of these missteps?

7 Changes Coming to Social Security and Medicare in 2021
7 Changes Coming to Social Security and Medicare in 2021

Recently, both Social Security and Medicare made some major announcements about benefits for 2021.

Can a Divorced Widow Claim Her First Husband’s Social Security Benefits?
Can a Divorced Widow Claim Her First Husband’s Social Security Benefits?

The rules are complicated when it comes to eligibility for survivors benefits.

Can a Twice-Divorced Woman Claim Social Security Survivors Benefits?
Can a Twice-Divorced Woman Claim Social Security Survivors Benefits?

Understanding survivors benefits rules is the key to getting the most from your benefit.

These Are the 10 Worst Cars for Depreciation
These Are the 10 Worst Cars for Depreciation

Two types of vehicles are especially likely to see steep plunges in value.

10 Things I Always Buy at Trader Joe’s
10 Things I Always Buy at Trader Joe’s

From snacks to sweets to side dishes, stock your cart with these time-tested favorites on your next TJ’s run.

9 Things You’ll Never See at Costco Again
9 Things You’ll Never See at Costco Again

The warehouse store offers an enormous selection, but these products aren’t coming back.

11 ‘Disposable’ Items You Should Be Reusing
8 Things You Should Buy at Restaurant Supply Stores
8 Things You Should Buy at Restaurant Supply Stores

You don’t have to be a chef or a restaurant owner to shop here.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

19 High-Paying Jobs You Can Get With a 2-Year Degree
19 High-Paying Jobs You Can Get With a 2-Year Degree

There are easy high-paying majors available in the U.S. — and no bachelor’s degree is required. We’re here to help you find easy degrees that pay well.

Stop Buying These 19 Things Online
Stop Buying These 19 Things Online

The internet has changed how we shop. But for some things, you’re still better off buying the old-fashioned way.

Cut These 11 Expenses Now If You Hope to Retire Early
Cut These 11 Expenses Now If You Hope to Retire Early

Like the idea of financial independence? Part of the FIRE equation is cutting costs.

27 Things You Should Never Pay For — and How to Get Them for Free
27 Things You Should Never Pay For — and How to Get Them for Free

When you know the tricks, you can save big on all kinds of useful things that others pay for.

4 Tax Credits That Will Be More Generous in 2021
4 Tax Credits That Will Be More Generous in 2021

If you are eligible for these tax breaks, they will slash your federal income tax bill — dollar for dollar.

15 Things You Can Get for Free in December
15 Things You Can Get for Free in December

December is here, which means it’s your last chance to take advantage of fabulous freebies in 2020.

7 Tips for Building an Emergency Food Supply
7 Tips for Building an Emergency Food Supply

A pandemic or natural disaster could leave you reliant on your existing emergency food supply. Is your pantry well-prepared for emergencies? Knowing what to stock up on for emergencies can be a difficult task and we’re here to help.

7 Reasons to Carry Mortgage Debt Into Retirement
7 Reasons to Carry Mortgage Debt Into Retirement

It often makes financial sense to not pay off your mortgage before retiring.

These Are the 4 Best Medicare Advantage Plans for 2020
These Are the 4 Best Medicare Advantage Plans for 2020

Medicare Advantage customers themselves rate these plans highest.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.