Worthy Bonds Review: Can You Really Earn 5% Interest?

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Are you looking for a way to invest without putting all of your money into the stock market?

Worthy Bonds can be the alternative investment you’re looking for. You invest in small business loans that earn 5% annual interest, and you only need to invest $10 at a time.

The 5% annual yield is higher than the current savings account and bank yields. As long as the borrower makes their monthly payment, you make money and only lose money if the borrower defaults on the loan.

Overall Rating


Worthy Bonds lets you earn an attractive 5% annual return by investing in small business loans and only requires a $10 investment. This is an easy way to add to your fixed income. 

  • Investment amounts


  • Easy to join


  • Risk



  • Can invest in small amounts
  • No early withdrawal penalties
  • Non-accredited investors


  • Taxed as ordinary income
  • Newer investment company
  • Not FDIC Insured

What is a Bond?

A bond is a loan where a business or government is the borrower. Most investors invest in individual bonds and bond funds through their online brokerage or 401k plan.

Also, some choose to buy savings bonds from the U.S. Treasury.

Each month, your bond investment can pay fixed interest payments until either the bond matures or you sell the bond.  

Worthy Bonds lets you invest in small business loans. Each bond costs $10 each and has a 36-month repayment term.

Each bond earns 5% annual interest although you receive weekly interest payments.

How Does Worthy Bonds Work?

Worthy Bonds is a crowdfund investing platform that started in 2016. They let investors directly invest in small business loans without using a bank.

This investing option was previously only available to “accredited investors” with a high annual income or liquid net worth. Worthy Bonds is open to all U.S. investors at least 18 years old.

One reason Worthy Bonds is open to every investor is that investors can’t pick specific loans in which to invest.

Even accredited investors can’t handpick which ones they invest in. With each $10 note you buy, you’re investing a tiny portion in every open loan in the Worthy portfolio.

Crowdfund investing can be riskier than a bank savings account. But because you’re a direct investor, your potential investment return is higher.

That’s how Worthy Bonds can offer a 5% annual yield.

In contrast, the highest saving account yields are closer to 2%. Worthy Bonds can be riskier than the bank but is still a legit way to earn more interest on your savings.  

You invest in small business loans secured by liquid assets that are worth more than the loan value.

In other words, Worthy should be able to access the borrower’s cash assets to recoup the remaining loan principal, so your bonds don’t lose money.

How Worthy Bonds works:

  1. You deposit the cash and buy bonds in $10 increments
  2. Worthy invests in business loans and charges an interest rate higher than 5%
  3. You earn fixed monthly interest payments with a 5% annual yield
worthy bonds interest earn

Each bond matures in 36 months. However, you can withdraw your money at any point during the term penalty-free.

This feature is one way Worthy is different than bank CDs and peer-to-peer lending platforms that charge an early withdrawal fee.

Another notable difference between Worthy and your local or online bank is that Worthy isn’t FDIC-insured.

So if your Worthy Bonds investments default, you can lose your entire investment and never receive repayment.

But, in spite of this, Worthy Bonds is a legit company. It is SEC-registered just like online brokerages including Vanguard and Fidelity.

Account Types

Worthy Bonds only offers taxable accounts. You must report your investment income on your federal and state tax return.

On a positive note, Worthy Bonds only requires a $10 initial deposit purchase your first bond.

You will receive a Form 1099-INT each year reporting your interest earnings. This form is similar to the ones you receive from your bank, and other crowdfund investing platforms.


There are zero fees to buy or sell Worthy Bonds. Not paying an early withdrawal penalty makes Worthy Bonds unique. Similar crowdfund investing platforms charge a 1% early withdrawal fee.

Who Can Invest?

All U.S. citizens and permanent residents at least 18 years old with a U.S. bank account can invest in Worthy Bonds.

Investing Limits

Although Worthy Bonds is open to all U.S. investors, there are income-based investing limits. Worthy Bonds has different investing limits for accredited and non-accredited investors.

You’re an accredited investor if you earn $200,000 annually ($300,000 for married investors). Or if you have a minimum $1 million net worth, not including your home value.

Most U.S. investors are non-accredited investors because they don’t meet the income or net worth requirements.

The current Worthy Bonds investing limits are as follows:

  • Non-accredited investors can invest up to 10% of their annual income or net worth.
  • Accredited investors can invest up to $100,000 (10,000 bonds) online. Worthy states investing is without limit if accredited investors visit Worthy’s physical office or contact their customer support team via phone.

How to Invest

You need to link your bank account to fund your investment account. Worthy only allows you to buy bonds in $10 increments.

It takes between four and six business days for Worthy to transfer the funds from your bank account and buy bonds.

Worthy lets you make one-time and recurring monthly contributions. You can also invest small amounts of money with the spending roundups from your credit and debit purchases.

Recurring Contributions

On the same date each month, you can schedule recurring contributions in $10 increments. All withdrawals come from your linked banking account.

Spending Roundups

Worthy Bonds can also monitor your credit card and debit card purchases. If you choose this feature, they round each purchase up to the next dollar. Then they make a new bond purchase when the round-up balance reaches $10.

For instance, Worthy rounds a $23.30 purchase to $24 and invests the 70-cent round-up. A full-dollar transaction, like $15.00, would add a $1 round-up to the total.

All cash withdrawals come from your linked bank account and never your credit or debit card.

This round-up option can be an easy way to invest each time you spend money. Plus, it increases your investing frequency.

worthy bonds round up

Earning Interest

All Worthy Bonds earn 5% simple interest with fixed weekly interest payments. This interest begins compounding (i.e., earning more interest) when you reinvest your interest into a new $10 bond.

Automatic Reinvestments

No matter how you fund your investment account, Worthy can reinvest your interest earnings in $10 intervals.

You must activate this feature in your account settings. Until you activate automatic reinvesting, your interest income sits idle until you sell the original bond.

If you plan on investing long-term, enabling automatic reinvestments is the best way to maximize your potential passive income.

Withdrawing Bonds

Worthy Bonds lets you sell bonds at any time penalty-free. Additionally, customers can access and withdraw their interest at any time, penalty-free.

To access your cash, you must sell the original investment. Another option is waiting for the interest to reinvest and you can sell the new “interest bond” for a $10 withdrawal.

You must withdraw the entire principal amount, so this is one way Worthy Bonds are more like a bank CD.

If this is a hindrance, a savings account or a bond ETF can be a better option. With these types, you can make interest-only withdrawals without touching your principal.

You sell your bonds in $10 increments. Then Worthy deposits the original investment and uninvested interest into your bank account within four to six business days.

If you withdraw at least $50,000 at once, it can take 30 days to complete the transfer.

Once the bond matures after the 36-month term, you can either withdraw your original investment or purchase new bonds.

Are Worthy Bonds Safe?

There’s an element of risk to any investment. For instance, businesses can go bankrupt. Stock share prices can drop to $0.

In general, Worthy Bonds are riskier than banks savings accounts and bank CDs.

However, they can be safer than investing in stocks whose share prices are more volatile and can even take years to recover from a steep price decline.

With a 5% annual yield, Worthy Bonds can be considered a less risky investment. They are a good option if you want to invest in bonds that don’t trade on the stock market.

Why Worthy Bonds Are Safe

The following reasons show how Worthy Bonds are potentially safer and riskier than other investment options.

Asset-Backed Loans

Worthy states they only invest in small business loans that are “fully secured.” The loan amount doesn’t exceed two-thirds of the business’ net worth. These loans require asset and inventory-backed collateral.

If a business stops making payments, Worthy can access the borrower’s business and personal assets to recover the remaining loan balance.

If these loans were not secured, then Worthy couldn’t use the borrower’s collateral to recover the loan balance. Worthy investors would lose the full unpaid balance as a result.

Regrettably, loan defaults are sure to happen. And Worthy may not be able to recover enough collateral to offset unpaid balances.

In this case, Worthy puts cash in an “emergency fund” as an extra safeguard. Then they can use these cash reserves to continue paying the 5% interest rate and covering bond withdrawals.

Invest in Multiple Loans

Worthy invests in multiple small business loans. Investing in as many loans as possible helps minimize risk to create a diversified portfolio.   

Worthy is SEC-Registered

Registering with the U.S. Securities and Exchange Commission means Worthy Bonds is a legit company. Any credible crowdfund platform or stock investing brokerage is SEC-registered.

Being SEC-registered isn’t the same thing as being FDIC-insured. Worthy isn’t a bank. If the bonds default and Worthy can’t recoup your original investment, you lose your remaining balance.

Potential Risks

Like anything, there are some potential risks to consider.

Borrowers May Default

Worthy Bonds inherent market risk is if too many borrowers default on their loan payments. Default rates can increase during a recession or if Worthy makes poor investment decisions.

But this is the same risk you face if you keep your money in a savings account, bank CD or invest in small business loans with another crowdfund platform.   

Cannot See Investment Portfolio

Investors cannot see the loans in which they are investing.

Worthy only states each loan is fully secured and doesn’t exceed two-thirds of the business net worth. Also, Worthy charges an interest rate higher than 5%.

Although the lack of transparency can be a risk, banks don’t disclose specifics of their loan details to savings and CD account holders either.

Only in Operation Since 2016

While Worthy Bonds didn’t pioneer small business loan investing, they have only been issuing bonds since 2016. So the company hasn’t been through an entire credit cycle.

Thus, if the default rate increases and too many investors sell their bonds before the 36-month maturity date, Worthy Bonds can become illiquid.

Is Worthy Bonds a Scam?

No. Worthy Bonds is a legit way to effortlessly boost your income. You can choose how much you want to invest, and you will earn 5% annual interest on each $10 note.   

Like any investment, Worthy isn’t risk-free. Worthy has only been around since 2016 and hasn’t been “recession-tested.”

Perform your due diligence and only invest money in Worthy Bonds if you feel comfortable investing in small business loans.


  • Can invest in $10 increments
  • No early withdrawal penalties
  • All notes earn 5% annual interest
  • Non-accredited investors can join
  • Potentially less risky than stock investments


  • Interest taxed as “ordinary income” instead of capital gains
  • No retirement plans that minimize taxable income
  • Worthy is still a relatively new investment option
  • Default risks increase during a recession


Worthy Bonds is a legit and affordable way to earn fixed income. The 5% annual yield is better than the current savings account and bank CD rates.

It can also be a good way to diversify your investment portfolio without relying only on the stock market to earn passive income.

You shouldn’t put all your money into small business loans. However, Worthy Bonds can be a pivotal passive income idea to diversify your investment portfolio and save for retirement.

2 thoughts on “Worthy Bonds Review: Can You Really Earn 5% Interest?”

  1. This sounds like a great way for investors to earn a higher interest rate than banks are presently paying on CDs or savings accounts. However, it is not accurate to imply that purchasers of Worthy Bonds are essentially taking on the same risk profile as someone holding deposit accounts at an FDIC-insured bank. If an FDIC-insured bank goes bankrupt most depositors will – in fact – NOT lose any money. More specifically, if an FDIC-insured bank goes bankrupt because they’ve made bad loans then holders of deposit accounts in that bank are federally insured against losses up to $250,000 per individual. Conversely, if too many small businesses should default on their Worthy Bond-backed loans the investors in those bonds actually ARE exposed to potential loss of their investment capital (i.e. there is no federally guaranteed program insuring investors against such losses). With that said, the higher interest rate premium associated with purchasing Worthy Bonds arguably represents reasonable compensation to the investor for assuming this added level of risk.

  2. For 6 months, so far, so good. Worthy is a simplistic way to increase your savings. I wanted to find out how long it took to initiate a withdrawal and actually receive the $ into my checking account, and the funds were there in 4 business days. As always, DIVERSITY. You know the drill. “Get rich SLOWLY”!

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