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Sounds like a great idea, I made an account. I was looking at the official rules and noticed the mail-in option to get tickets. Was it a regulatory requirement to provide a way to get tickets without deposits?
Your FAQ says you use a third party that draws the random numbers. Is this number drawing verifiable somewhere? Can you say anything about their techniques?
Earlier quoted context omitted.
There is a federal requirement with savings accounts that you can only make 6 withdrawals per month. Right now that has been lifted due to covid, so there is no limit. If you withdraw, you lose tickets so that is a deterrent to continuing to deposit and withdraw to game the system
Is there a limit to the amount of money you can withdraw at once?
Right now it's $2,000 per day. If you want to withdraw more than $2,000 per day, you can upload a driver's license to verify your identity (prevents fraud) and then you can withdraw up to $100,000 per day.
I'm surprised the play here is to make your own bank rather than integrate existing banks. I've never worked in finance though, maybe integrating with banks is a PITA.
Your FAQ says you use a third party that draws the random numbers. Is this number drawing verifiable somewhere? Can you say anything about their techniques?
The insurance company we work with that is responsible for paying out the jackpot prize draws the winning numbers. They have no access to the numbers users have selected, so it's completely blind.
This looks really neat :) But I do wonder how well the Premium Bond (PB) idea will work when not backed by the state (NS&I, who issue PBs in the UK, is backed by the treasury). I would personally worry that my deposit will just be used for prizes in a Ponzi scheme situation. Another thought is that while it is true that in the UK a large number of the population have PBs, these are usually bought by their parents whe…
Building trust is definitely a challenge for us as a new company. Funds with Yotta are FDIC insured up to $250,000, which helps, and we communicate that to users, but people still need to trust us fundamentally.
We looked into Premium Bonds and also found that a lot of Premium Bond ownership comes from older generations. We are hoping that our UI and mobile first approach make the concept more appealing to a younger demographic in the U.S.
Very interesting. An idea that has long held interest (har) for me. I note from your comments the socially-laudable aim of attempting to help people in financially vulnerable populations. I wonder if emulating more elements of a lottery-like game would assist with this... EG imagine if I could walk into a shop, buy what looks and feels like a lottery ticket, but I've actually effectively added money to my phone-numbe…
Appreciate the feedback.
> We provide a rate of return on savings that on average is in-line with the top yielding savings accounts out there like Marcus or Ally. You might get a higher return if you’re lucky and win more prizes than expected. You might get a lower return if you win fewer prizes than expected. Even in a worst case scenario where you never win a prize, you still have your savings. Can you elaborate more on this? (Maybe you ca…
Yeah. Right now, the EV from prizes is actually higher than that. We are subsidizing to provide an even better value for early users. But in the long run, that's exactly right. The base rate plus prizes will be, on average, what you would earn in a vanilla but high yielding HYSA
Odds from here: https://www.withyotta.com/official-rules
I might be completely wrong but looks like your estimate yield is heavily dependent of amount of other people saving as well.
I bet the real model gets pretty damn interesting. Would love to get a closer look for sure.
If you wanted to be a bit more "evil genius". It would be interesting if somehow the money in the grandprize grew based on how many people participated. This would give people incentive to join and lower the overall EV for everyone, but also give you guys more funds to manage :)
This looks really neat :) But I do wonder how well the Premium Bond (PB) idea will work when not backed by the state (NS&I, who issue PBs in the UK, is backed by the treasury). I would personally worry that my deposit will just be used for prizes in a Ponzi scheme situation. Another thought is that while it is true that in the UK a large number of the population have PBs, these are usually bought by their parents whe…
Having the backing of the government like with Premium Bonds is huge. Both for marketing and for trust. Building trust is definitely a challenge for us as a new company. Funds with Yotta are FDIC insured up to $250,000, which helps, and we communicate that to users, but people still need to trust us fundamentally. We looked into Premium Bonds and also found that a lot of Premium Bond ownership comes from older genera…