Yotta is a FDIC-insured, lottery-based, high-yield savings account. Previously, I’ve written an article singing the praises of this app (link). The current system offers you 0.2% APY plus lottery winnings. This averages out to be around 1.5 to 1.9% APY. While this return is lower than the 3% offered by Porte and HMBradley, you only have to put money in Yotta to get the APY. The other accounts require direct deposits and/or a certain number of qualified debit card transactions.
Here are the basics: Yotta offers you a recurring “lottery ticket” each week for every $25 you have saved, up to $10,000 (after $10,000 it is one lottery ticket for every additional $125 you save). This is, by far, my favorite savings account because it turns my savings into entertainment. Also, you can get bonus tickets for all sorts of things, such as referring people to the app (or signing up using a referral link), sharing your winnings, and using their debit card.
Now, the best savings account available is offering a new feature: crypto buckets. Made popular by companies like BlockFi, crypto buckets pay you interest (up to 8%) for holding cryptocurrencies with them. How it works is that you deposit cash and convert it to the crypto you wish to save with the company, say Bitcoin. From there, they pay you interest (like a savings account) to hold your crypto with them. Yotta is beginning to offer crypto buckets with around 4% APY plus a recurring ticket for every $10 you have saved in their crypto buckets (2.5x more tickets than their savings account). This should average out to be about 8% APY (based on the averages from the savings account plus the 4% APY fixed). The assets in the crypto bucket are stored in stablecoin USDC – cryptocurrency pegged with the US Dollar.
Now for the downside to these crypto savings accounts. These accounts are not FDIC insured, meaning that your money is not guaranteed by the government. For the non-USDC crypto accounts, they suffer from volatility equal to the volatility of the crypto they hold, both positively and negatively. So if a crypto drops to $0, you lose everything. USDC is a safer crypto investment, because it is meant to be a crypto version of the US Dollar and make transactions secure and efficient. However, it is still not as safe as the savings account in cash – hence the extra return on your money.
While Yotta’s crypto buckets are currently in early access with new features likely to roll out in the future. This offers users a way to expand into some crypto without removing funds from their savings. Later, Yotta will offer additional cryptocurrencies to invest in that are risker than USDC, which is a relatively safe, low volatile cryptocurrency, because Yotta is working with reputable companies like Compound that are backed by billions of dollars.
If you have not tried Yotta, sign up using the link below to get 100 bonus lottery tickets for your first week.
Please let me know in the comments what you think of crypto buckets and if you would use them.