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Savings account + lottery

Nice Guy Eddie

By Nice Guy Eddie
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Nice Guy Eddie

Nice Guy Eddie 13507

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I’ve been playing around with a new US-based, online savings account called Yotta. They’re mimicking a UK savings bond or a topic of a famous episode of Freakonomics: no-lose savings account with prizes to encourage more savings. The more you save, the more prizes you can win.

Yotta is a .2% FDIC-insured, savings account. Better (double) return than major banks but worse (~1/3) than online banks. BUT the real return is that Yotta has an on-going daily/weekly lottery prize system that you’re automatically enrolled: 1 ticket for every $25 in deposits. Prizes and odds

Prizes range from $.10 to $10m. Basically this is like a state lottery except you cannot lose your base money. People smarter than me have calculated that an expected, reasonable annual return is ~1.5% with the prizes and interest. Reasonable = prizes that you have a reasonable chance to win over a year.  

They have an affiliate program so opening an account with the following link gets you and I both 100 free prize tickets for a week: https://withyotta.page.link/D2tSezXrm2NpEqTt7 Feel free to join on your own without an affiliate link.

Being a savings nerd + degenerate gambler I like the idea of passive savings plus the small chance of a big payday.

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18 minutes ago, Nice Guy Eddie said:

 

Prizes range from $.10 to $10m. Basically this is like a state lottery except you cannot lose your base money. People smarter than me have calculated that an expected, reasonable annual return is ~1.5% with the prizes and interest. Reasonable = prizes that you have a reasonable chance to win over a year.  

 

I'ma need a shitload of dimes...

ee0425a7-ba6c-42c0-a9ff-16f7d1513102_scr

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Nice Guy Eddie

Nice Guy Eddie 13507

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6 minutes ago, BurntEyes said:

So I checked this out, have yet to check out the Freakonomics stuff but will.

Prior I'll give my thoughts.

I think it's a fantastic idea. Setting aside my personal financial stuff entirely, there is a massive issue with savings by both the middle and more importantly lower socio-economic status folks in this country. At the same time, the lower socio-economic folks are much more likely to provide extra tax to the government by playing lotto, on a wing and a prayer, when that's the last thing they can really afford. 

So this helps, at least partially, two items. First, it's easy to set up the app via phone. Next, it entices folks to set up an auto deposit upon setup. That value can be low, but something small is a lot better than most are doing today. It encourages additional deposits. Accessing the funds isn't super easy, which is actually a positive as it makes withdrawal a tad more difficult. This is good, as it won't be used to buy bullshit at Walmart or Target that lower socio-economic and middle class don't fucking need. 

Those factors and the "game" aspect just might keep folks that don't normally save to save, even if it's just a bit.

It is great in general setting a side my personal need for investigation of how legitimate the company is currently. 

Barring some sort of squirrelly shit, I see it as a net positive for people that don't normally save and in a bigger picture better for the US economically.

 

Exactly. Even if people would just set up a $25/wk auto savings, in whatever bank, it adds up over time. When you read that people can’t come up with $400 for an emergency, a small auto save plan can get them there quickly. Of course that doesn’t stop them from having an every-month emergency because they still live paycheck to paycheck.

Adding some social and game features, plus the chance of $10m or a Tesla, can give you a thrill. Besides that, the bank draws one number a day, so the excitement can build if you start to match a few #s early in the week.

The similar UK savings program has reportedly enticed 1/3 of the residents to participate.

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B00M

B00M 6413

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Funny timing as I've broken up my huge (obviously) money market (that earns $dick.99) and created a bunch of relatively small savings accounts to get 0.25%  started doing 12-month 0.50% web certificates every month... So 1.5% sounds pretty great. Did the person that calculated the 1.5% effective rate show their work? 

 

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Nice Guy Eddie

Nice Guy Eddie 13507

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40 minutes ago, B00M said:

Funny timing as I've broken up my huge (obviously) money market (that earns $dick.99) and created a bunch of relatively small savings accounts to get 0.25%  started doing 12-month 0.50% web certificates every month... So 1.5% sounds pretty great. Did the person that calculated the 1.5% effective rate show their work? 

 

Actually, the math calculates 1.65% as the current expected worse-case.  I rounded it down to 1.5%. The math is on this page: https://www.asksebby.com/banking/yotta-savings-review

Some personal finance influencers (yes, there is such a thing) are claiming the expected return is 1.8-2.0%. However they are including the $10m prizes in their calc. Given that you're never going to win $10m, I think it's wrong to consider it. 

The game/lottery aspect makes it slightly more interesting than a boring, passive CD or savings account. You pick your #s, or auto-pick, on Mondays. Then every night @ 8pm, a number is chosen by an outside firm. If you deposit $25 and have 1 weekly ticket all year, you probably have to get very lucky to win enough to earn 1.5%. I'm sure some math whiz can figure out how much you need to deposit to have high confidence you will hit the average.

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High Plains Drifter

High Plains Drifter 11024

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Do I understand this correctly? The more you deposit, the greater your chances of winning. But you never lose your deposit, can withdraw whenever you like, without penalty? Every 25$ deposited is another chance to win? Please correct me if I'm wrong.

 

Assuming all that is correct, then someone with  25 million to deposit is one million more times likely to win (and thus get a larger return) than somebody with only 25 dollars to deposit. Sounds like another scam on the poors, unless i'm missing something.

 

Also, what is to stop you from depositing, withdrawing, and then redepositing?

 

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LebongJames

LebongJames 1791

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1 hour ago, High Plains Drifter said:

 

Do I understand this correctly? The more you deposit, the greater your chances of winning. But you never lose your deposit, can withdraw whenever you like, without penalty? Every 25$ deposited is another chance to win? Please correct me if I'm wrong.

 

Assuming all that is correct, then someone with  25 million to deposit is one million more times likely to win (and thus get a larger return) than somebody with only 25 dollars to deposit. Sounds like another scam on the poors, unless i'm missing something.

 

Also, what is to stop you from depositing, withdrawing, and then redepositing?

 

It definitely benefits people with more money just like every banking institution. No benefit in withdrawing, its a weekly lotto so every week you get a lotto ticket for every $25 in your account.

 

Your account is FDIC insured up to $250k. If they ever had to pay the $10 million they would make an insurance claim.

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Nice Guy Eddie

Nice Guy Eddie 13507

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As stated,  you don’t need to withdrawal and deposit again. You get a ticket each week for every $25. As for someone placing $25m in their account, they currently cap deposits (& withdrawals) to $40k/month.  And yes you can withdrawal whenever you want up to 6x/mo.

And even if you had 1m tickets hoping to win the top prize, you can’t prevent someone else from picking the same numbers. It’s a lottery not a raffle. The top prizes can be split with multiple winners. It’s one of the fallacies of trying to buy all of the possible power ball numbers.

and as far as large depositors winning more than a small depositor, of course that will happen but savings accounts are about percentages.  If I deposit $1K and get lucky with a $100 win, that’s an awesome savings account return. If you deposit $100k, you need to win $10k to keep up with me.  The $100k person has a better chance at the top prizes but their chances are still very low.

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Nice Guy Eddie

Nice Guy Eddie 13507

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29 minutes ago, wild_turkey said:

Do you have to actively pick numbers each week or do your picks get automatically generated on your behalf? In other words, can you deposit $25k and let your 1,000 weekly picks continue on autopilot without actually doing anything?

You can pick as many or as few numbers as you want, and then they auto-pick everything else. I think the deadline to enter your own numbers is Monday @ 3pm. Then auto-pick kicks in.

At that point, its like you're playing a slow powerball game:

  • 8pm nightly, the app displays the nightly number.
  • your best, winning tickets are highlighted
  • you see your weekly luck factor, and on-going stats.
  • and what number(s) you should be cheering for in the upcoming nights. 

I can't see any gotchas with this game. They appear to want you to win, have fun, which should entice you and others to deposit more. On that note, if you can convince others to join, you can rack up some decent one-week and on-going rewards. With that being said, here is my link for 100 free tickets (for one week) for both of us:  https://withyotta.page.link/D2tSezXrm2NpEqTt7 ;) 

I started with a small amount just to check it out and then bumped it up significantly. I have some 5-year CDs that mature soon so I plan to add a fair amount more by the end of the year. As for security, they use Visa (Plaid) to transfer from your current bank account to Yotta's host bank, Evolve.

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capnamerca

capnamerca 571

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On 10/4/2020 at 11:02 AM, BurntEyes said:

So I checked this out, have yet to check out the Freakonomics stuff but will.

Prior I'll give my thoughts.

I think it's a fantastic idea. Setting aside my personal financial stuff entirely, there is a massive issue with savings by both the middle and more importantly lower socio-economic status folks in this country. At the same time, the lower socio-economic folks are much more likely to provide extra tax to the government by playing lotto, on a wing and a prayer, when that's the last thing they can really afford. 

So this helps, at least partially, two items. First, it's easy to set up the app via phone. Next, it entices folks to set up an auto deposit upon setup. That value can be low, but something small is a lot better than most are doing today. It encourages additional deposits. Accessing the funds isn't super easy, which is actually a positive as it makes withdrawal a tad more difficult. This is good, as it won't be used to buy bullshit at Walmart or Target that lower socio-economic and middle class don't fucking need. 

Those factors and the "game" aspect just might keep folks that don't normally save to save, even if it's just a bit.

It is great in general setting a side my personal need for investigation of how legitimate the company is currently. 

Barring some sort of squirrelly shit, I see it as a net positive for people that don't normally save and in a bigger picture better for the US economically.

 

This, plus NGE's clarifications, is exactly where Freakonomics landed as well (saved you that 45 minutes). While probably not perfect, this idea is one of the better "new ways to incent saving behavior" that's come out of a VERY stagnant market. 

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Nice Guy Eddie

Nice Guy Eddie 13507

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I won $.90 last week. Not bad for a $1050 savings. However I had some free referral tickets. Who knows which ticket won.

This week I have the referral tickets from many of you.  Thanks again! 

2 hours ago, nineliveslost said:

 

I have no idea why I am having fun checking the daily number and enjoying all this 

I'm the same. I only watched the drawing live 2 of the days but I've been checking the numbers each night.  I'm a fairly good saver anyway but this has been the first time that I've ever set up a weekly transfer from my bank account to the Yotta bank.

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CBT

CBT 1282

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On 10/4/2020 at 9:26 AM, Nice Guy Eddie said:

I’ve been playing around with a new US-based, online savings account called Yotta. They’re mimicking a UK savings bond or a topic of a famous episode of Freakonomics: no-lose savings account with prizes to encourage more savings. The more you save, the more prizes you can win.

Yotta is a .2% FDIC-insured, savings account. Better (double) return than major banks but worse (~1/3) than online banks. BUT the real return is that Yotta has an on-going daily/weekly lottery prize system that you’re automatically enrolled: 1 ticket for every $25 in deposits. Prizes and odds

Prizes range from $.10 to $10m. Basically this is like a state lottery except you cannot lose your base money. People smarter than me have calculated that an expected, reasonable annual return is ~1.5% with the prizes and interest. Reasonable = prizes that you have a reasonable chance to win over a year.  

They have an affiliate program so opening an account with the following link gets you and I both 100 free prize tickets for a week: https://withyotta.page.link/D2tSezXrm2NpEqTt7 Feel free to join on your own without an affiliate link.

Being a savings nerd + degenerate gambler I like the idea of passive savings plus the small chance of a big payday.

I also expect a share in the $10m.

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