It's no secret that banks charge ridiculous rates when you take a loan. So it depends on your credit score but even with a good one, you can still get loans at up to 17% (speaking from experience). Isn't that insane? Yet when you save in the bank you barely even get 0.5% in returns.
If you have money saved in a bank for the long term, that's a bad move.
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There are institutions where you can become the lender and lend money out to borrowers. You basically become the bank or lender.
On one site, borrowers are rated from A to E, based on their credentials worthiness. You decide if you are willing to take a chance with risky high return investments(such as with the D and E borrowers). I prefer to stick with A and B clients.
The risk here is there's a chance that some people can default on their payments . If you are well diversified, it usually isn't a significant loss. I think this is worth checking out especially if you save in the bank. Or if you are considering where to invest your money. There are several YouTube videos on such investments that are worth checking out. The bank is such a wrong place to keep your money because it does not match the inflation rate.
Two examples of such peer to peer lending institutions are
Prosperity and
Lending club.
I'm sure there are many others.
