I Just Bought a Bank – Yotta YC S20 | Hacker News Reader

I Just Bought a Bank – Yotta YC S20

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11 pointsjeffmorrisjr10 comments

>You would earn an average of a 2 to about 2.25% return. Now for reference that's about 3 times higher than even the best high interest savings accounts out there.

Is the implication of this that the "best" high interest savings accounts are about 0.75%?

The real question is, why would you ever keep any money at all in a savings account? 100% of my net worth is tied up in various investments, with $0 dollars in both my savings and checking account.

Though if I ever do need cash, I just overdraw my checking and money/margin is drawn from my brokerage.

I then liquidate assets as needed to pay off my credit card before the interest kicks in.

Yotta founder here. The issue with investments is that you risk losing money. People still need an emergency fund and that money should be in an FDIC insured account for a rainy day.

Perhaps you can clear this up? I still don't understand how Yotta bank intends to earn money. Not just to stay afloat, but also pay for the unprecedented interest rates of its savings accounts. Seems like another growth now, profit later/never venture to me. I wouldn't place my trust, let alone money (even if it's insured) in such an establishment.

I would love a solid answer as well, but you have to realize most "money" out there is credit and its effectively how our economy works, so you don't necessarily need to make real money to make real money.

Interchange, affiliates, and lending will be a strategy for us soon.

Historically it was more difficult to liquidate assets. If you do need to liquidate assets it can be poor timing (market crashes + herding) and create excess taxes. Cash is an investment. Yet the government is flooding the markets liquidity now so...

It's not unusual. An acquaintance from a hackerspace bought a bank charter from a closing regional bank to reduce the costs to complete an international transaction.

How is this not gambling? This just seems like they combined gambling with a pyramid scheme.

There's no risk of loss here. That's the major difference. Gambling is gambling because of the risk of loss.

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