The highest yield savings account rate offered so far is coming from SmartyPig, a free online piggy bank for people who want to save for a specific purpose.

Here are the highest yield savings account rates offered for May 2011:

• 1.35%APY – SmartyPig savings account
• 1.25%APY – Hudson City Bank internet money market savings
• 1.25%APY – SalemFivedirect eOne Savings
• 1.15% – Discover Bank online savings, American Express high yield savings and incrediblebank incredible money market account

SmartyPig has the lowest minimum balance requirement to obtain the APY, which is $25. SalemFivedirect requires $100, Hudson City Bank requires at least $2,500, Discover Bank $500, zero for American Express, and $2,500 for incrediblebank.

If you are comfortable investing in peer-to-peer lending, the returns you will get is high compared to what is being offered by most financial institutions.

For example, Prosper actual returns of investment, according to its website, is 10.4%. You can also borrow money from them at 7.4%APR. Refer your friends and you will earn $100 for friends who will get a loan from them. There is also Lending Club which offer a great return of over 9.6%.

Remember that though the returns are quite tempting, peer-to-peer lending is ideal only for those who are comfortable with these type of investments.

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For folks who are always looking for ways of making their money work for themselves, options are many. For example, you can invest your funds in a Peer-to-Peer Lending. This type of investment is very popular these days competing banks that offer good returns.

One Peer-to-Peer Lending that has 860,000 members is Prosper.com. With a total funded loans of $180,000,000 as of this writing, one can make an estimated portfolio return of up to 13%. Now, that’s something that banks can’t give you.

Prosper works like any other Peer-to-Peer lending. You invest your money directly to people who are in need of funds. It’s a risky investment build on trust.  However, you have access to each borrower’s credit history. You can then place a bid with the minimum rate you want to earn. With Prosper, one can start with just $25.

In addition, you have a choice on how to invest either listing directly from borrowers or bidding on Notes offered for sale on the Trading Platform. Note that you cannot start investing unless you become a member of Prosper — a process that requests basic information from you.

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