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Comment by unwoundmouse | Hacker News Reader

So if I buy into a 100m dollar powerball, I'm actually getting the net present value of 100m in 40 years? I'm amazed this is standard practice

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Yeah exactly. Almost any grand prize you see is really the sum of the annuity value. We kind of have to use the same practice in order to be competitive, and we think a lot of people assume it's the annuity value sum as well. (https://www.magnifymoney.com/blog/banking/powerball-annuity/)

You should definitely rethink this. You're a savings account. Be honest (read: obvious and clear) with your customers.

It’s common knowledge that jackpots have an annuity or a lesser lump sum, that’s how lotteries work already. This is really just a way to gamify savings as a lottery, I think it’s a great idea and may sign up. I have a really low yield savings account right now anyway and was planning to sign up for an online high yield account.

Yes, but here you can't get the annuity. You can only the lesser lump sum, which after taxes won't be enough to get the annuity.

You're talking about lotteries. I'm talking about savings accounts. My point is that savings accounts should be held to a higher standard, because obviously.

But this product is literally a savings account with a lottery attached to it. Why would you not use the terminology/methods used by the lottery industry when describing the lottery aspects of the account?

If you do not understand, I cannot help you.

I think you could flip the status quo on its head, by promoting a full 10M (or 5M...), and making it clear it is NOT the annuity value sum like you do for lesser prizes, since I would argue that your competitivity/differentiation comes from the fact that you don't lose money to play.

Also describing the lottery mechanism without any gotcha is the right thing to do for consumers, and being in the unique position you are, you have the opportunity to lead that change.

With powerball I think you get the 100m spread out over 30 years or a lump sum now which is less.

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