Yotta: The Winning Lottery?!
Update Jan 3, 2021: Yotta got nerfed :(. It’s still worth it, but it’s not significantly better than other high-yield savings accounts.
TL;DR: Yotta may be the best savings account current, with a fun twist.
A YCombinator startup recently came out with a new savings account called Yotta that was inspired by the lottery bonds in the UK. Yes, it pays a steady 0.2% APY, but it also gives you lottery tickets, with a jackpot of $5.8 million! (Yes, I know the website says $10 million but if you look closely it’s actually $5.8million).
To encourage saving and deter people from spending on lottery tickets, Yotta offers 1 lottery ticket a week for every $25 you have deposited with them. So if you have $100 deposited, you’ll get 4 lottery tickets every week or roughly 204 every year. These tickets follow this prize schedule (search for prizes and odds). Some of the bigger prizes are shared among all winners.
What’s exciting is if you do the math, given the current prizes, the average return from this process is between 2.4% and 5.9% APY. With reasonable estimates of how many tickets there are in circulation, I’d estimate the return is around 3.3% APY. Add that to the 0.2% you get, and you’ll receive on average 3.5% APY (plus the excitement of dreaming about being a millionaire). Woohoo! That sure beats the lousy ~1% APY other savings accounts are paying right now.
How are they able to offer such high returns?
Great question. This is a startup flush with cash from Venture Capitalists, and it seems like they’re really pushing for a big user base. I wouldn’t expect these rates of return to last, but it’s definitely worth taking advantage of while it’s happening.
How do I know this is legit and not a scam?
The evidence that this is legit stems from two things:
- YCombinator and some big name VCs have a reputation to hold up, and they are backing Yotta.
- Yotta keeps their funds with Evolve Bank & Trust, and deposits are FDIC-insured.
I’ve come around to putting all my emergency cash now in Yotta. Of course, you should always do your own research to make your own informed decision. You can read more about the account here.
What if want to just try it out?
You can sign up and get 125 tickets (yes, more than the usual 100 ticket referral) if you use promo code THEJKW 🙂
After that, you can start making deposits (they have a limit of $10k a day, $40k a month, and of course FDIC insurance goes up to $250k, assuming you don’t have other accounts with Evolve Bank & Trust).
Happy Yotta’ing!
TheJKW