Zopa Now Live In The U.S. - All Loans are Insured CDs

After we broke the story that Zopa was en route to the U.S., their plane has finally landed at JFK and they are now open for business in the U.S. The big question that everyone was puzzled about was how they would federally insure loans. That question has been answered.

Loans that are federally insured will be through the Zopa CD up to currently 5.1% depending on which loans you back inside the CD. Zopa describes the CD as, "A Zopa CD is guaranteed and insured way to earn a fixed rate of return for a fixed term. Compare it to a "certificate of deposit" at a bank or a "termshare certificate" at a credit union. But it's different, too. Because your Zopa CD directly benefits the borrowers you pick by reducing their monthly loan payments."

So there is the entire program. It's different than Lending Club and Prosper and Zopa in the U.K. because it works completely on loans that are backed by CDs which are taken through a variety of credit unions in the U.S.

If the best I can do is a 1-year term at 5.1%, why not just go to a local bank or ING Direct who currently are at 4.7% with no hassles? I guess it's all about the idea of not only making a return on the CD but also helping someone in the Internet community.