Out of these choices what should I invest in and why?

4 week T-bills bought directly from:

http://treasurydirect.gov/

The only virtually ZERO risk investment in the world!

Unless you're a credit analyst, i don't suggest particiapting in prosper.com. U.S Govt T-bills at the moment are yielding less than 5.25%, so i would suggest placing your money in the savings account. As long as the account is fdic insured it offers a zero risk investment, and yields a nice return.

Invest in the online savings account.

The U.S. Govt T-Bills will pay out less than the online savings account and you won't be able to touch your money until it matures.

Prosper.com involves much more risk. The people with AA credit ratings seems safe if their data is correct, but I myself wouldn't do it because I know that incomes in America are decreasing, GDP is slowing, and the subprime lending is blowing up. But a bigger reason is I don't think that this website can affect people's credit scores. When people take loans out on the bank, they try hard to make payments because it can affect their credit score. I'm not so sure that you would have the ability to collect that a bank has.

Good luck.

None of the above. The stock market is the only place to invest to a achieve a long-term goal.

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pends on your money but 5.25% is impressive.