Using Worthy, investors earn a fixed 5% interest on the money they invest. This amount is paid to the users daily. Money invested in a Worthy Bond is given to Worthy who then takes the money you lend them and loans it to other companies. These other companies secure the loans with inventory or other assets. In the case that the company defaults on their payments, Worthy Bonds can seize the companies assets to repay the investor.

Worthy funds their operations by earning more than the 5% interest that they pay to their customers. They take the difference between the interest they are getting and the 5% interest that they guarantee customers and that is how they fund their business. (https://support.worthybonds.com/en/articles/2419551-how-does-worthy-make-money)

Worthy Bonds are not insured. Worthy Bonds mitigates risks by securing company assets to use as back up for its loans. In the case that a loan default occurs, company assets will be sold off to recover the amount the investor was owed. If the business does not have assets backing up the loan, the loan my not be able to be repaid. Worthy does not have information on what would happen to the principal in the case that a default occurs. Worthy Bonds is not a bank which means the bonds cannot be insured by the FDIC. However, the bonds are SEC-registered.