Update 12/4/20: They’ve now decreased the number of tickets you get to 1 per $150 in deposits versus the prior 1 per $25 in deposits, so it’s 1/6 as valuable now. This change is only for balances above $25,000; your first $25,000 in balances will continue to get 1 ticket per $25 deposited (even if your overall balance is higher than $25,000). This change will take effect for weekly drawings starting Monday, December 14, 2020. Those who have less than $25,000 in total deposits are not affected at all by the change. (ht to readers Jonathan, Billy, Noah)
Update 9/19/20: Yotta has sent out an e-mail stating the number of balls that the Yotta ball will be drawn from increases from 25 to 63. If prizes stay the same value then the expected APY will be reduced from 2.55% to 1.62%. We don’t know for sure how bad this reduction will be as they haven’t released the new prize list yet, but not a good sign. Hat tip to Mark
Original post 7/10/20:
Reader Jon reached out with a unique savings account called Yotta Savings, discussed on Y Combinator. They offer an FDIC-insured savings account which has a current earn of .2%; not exciting on its face. But they also offer lottery wins to earn much more based on how much you save which offer prize amounts as varying amounts – as low as $.10 and up to $10M.
For each $25 of savings you get a chance at winning big or little amounts from the lottery. Even if you don’t win any of the big prizes, the small prizes – on average – will significantly increase your actual return.
There’s an estimate that currently – during the launch phase – you should get around 3% APY return on your deposits after combining the regular .2% interest rate with the lottery earn. This is just an average; you may earn more or less. (Update: some in the comments have higher estimates of more like 4% or 5%. I haven’t crunched the number myself.)
The psychology behind Yotta is that people prefer having a chance at a big win, while keeping their base funds secure, rather than having steady smaller wins. They note similar programs in the UK which are wildly successful.
From a tax perspective, they say that lottery earnings under $600 do not get reported, and over $600 will get a 1099MISC. The actual .2% interest would be reported separately on a form 1099INT, presumably. (Update: the founder added on the Y Combinator thread that the .2% interest will count toward the 1099MISC $600 threshold. Doesn’t make any sense to me, but who knows.)
My guess is that this will be interesting to do for the time being while the lottery rewards are being subsidized by investors since you’ll hopefully end up with a return of ~3% which is better than almost any bank offers right now. In the long run it likely won’t be all that worthwhile as the rates will likely drop to be even with traditional high interest banks, according to what they are hoping/planing as of now. Maybe some will find it worthwhile in the long term as well.
I found it interesting from a quick look, and figured I’d put out this short review and let readers explore further for themselves whether its worth doing.
Signup with a referral and you get 100 tickets to start with. You can find referrals in the comments on this page. Do not leave them in the comments below.
I received an email from Yotta regarding a new Pool Play feature. Basically, you can create groups with other people to pool weekly tickets for increased chances of winning prizes. Prizes are automatically rationed out to pool members based on ticket contribution. Any interest in a private DoC pool?
There’s a big pool on reddit already. checkout /r/Yotta
Mark!!!! Are you the one that won the tesla???
if true, would be most deserving
Haha! Thanks and sadly no. If a Mark from Missouri wins the jackpot next week you might be right though.
Anyone else receive an email subject “Double disbursement reversal” ?
E-mail text as follows:
We are reaching out to notify you that we accidentally credited your account twice for the same exact amount of $X on or around 12-01-2020.
This should have only been one payment. Click here to see your statement that has the duplicate disbursement to your account.
This week, we will be reversing the duplicate transaction. You will notice this reversal of the accidental duplicate transaction on your January statement. Please mind, neither the mistaken disbursement nor its reversal will be visible in the app’s transactions history, only in your statements.
I’ve blacked out the exact amount but I was able to confirm there is indeed a double entry on the actual statement itself. But after manually adding all debits and credits I don’t actually see an extra $X in my account. It seems the extra amount was only in the “official” account and reflected in the statement but it was never visible to me in the app
Yup, same for me.
Yotta continues with steady growth. This week the estimated number of tickets is over 10M for the first time: 10.7M (up from 8.6M last week) with 95% confidence it’s between 8.3M and 13.1M. There were a few reports of people getting double their number of tickets this week so that may account for some of the rise.
Updated APYs are:
Base prizes: 1.66% (Most months it’ll be near this)
including the $1000 and $1500 prizes: 1.71% APY (Median return over a year will approach this)
and with all prizes: 1.96% APY (Over several eons you’ll get this)
https://docs.google.com/spreadsheets/d/1ovgrrD_fexVzgrCrzT1klKO509k1Atxs77Zo6iKMxG0/edit?usp=sharing
One the spreadsheet above just enter in your number of tickets to see a bunch of calculations about your range of expected winnings, chance to win each prize, time until you hit the jackpot, etc. Thanks and continued good luck.
How do you get information about Yotta’s growth? Do you have any information about PrizePool or know how to find the number of their tickets?
I’ve been tracking the tickets each week for the past 6 months. You can, with a pretty degree of accuracy, determine the number of overall tickets from the number of winners of the pooled prizes. And you can get this by looking at the amounts the winners of the $1000 and $1500 prizes win.
Unfortunately, Prizepool doesn’t have a mechanic like this as far as I know. So there’s no real way to estimate a ticket’s expected value or an APY.
Very smart. I applaud your dedication.
“(Over several eons you’ll get this)” This assumes the current interest rate climate will remain relatively unchanged over a period of “several eons”. 😉
I tried to leave my referral code on the other page but I couldn’t post. Was the feature to post in that thread removed?
https://www.doctorofcredit.com/heres-comment-isnt-showing-site/
The comments were locked on that page because some people leave their code more than once…
I know there’s a $10k withdrawal limit per day and $40k per month. What happens if I initiate a pull from another bank account above those limits?
We all saw this new update coming. And with the banks dropping to 0.50% now, Yotta had to do something too. I think the returns are still higher than the competing 0.50% ATM
Decent climb in predicted tickets from last week to 8.2M (from 6.2M) and so a slight drop in APYs:
Base prizes: 1.66% (Most months it’ll be near this)
including the $1000 and $1500 prizes: 1.73% APY (median return over a year will approach this)
and with all prizes: 1.98% APY (Over several eons you’ll get this)
I’ve made a few recent additions to the odds spreadsheet. Along with all the old calculations, I now list the expected amount you’ll win each win from the pooled prizes (if you get lucky enough to win), the odds at least one person will win the big prizes in a week or year, historical ticket estimate data, and a few other things.
https://docs.google.com/spreadsheets/d/1ovgrrD_fexVzgrCrzT1klKO509k1Atxs77Zo6iKMxG0/edit?usp=sharing
I got a Yotta email today that included a personal annualized APY calculation, 4.54% in my case, since the summer–no doubt boosted by some referral tickets. I can’t see this in the app, however, only Nov/Dec calculations. I wonder if everybody is getting this or if they are only sending if you have a reasonable high rate?
I think everyone got it, but the rate is misleading. For those familiar with the XIRR formula in excel, they’ll find this annual summary rate as being materially inflated. For 3 accounts I’m familiar with, the rate is inflated by over 50% of the actual XIRR derived rate. I’ll add that I don’t think Yotta is lying about the rate, but rather allowing a multitude of ways to calculate a rate that typically can be explained by the same English language, but isn’t representative of what your cash is actually producing for you.
EDIT: whoops just re-read to realize this was about the YTD APY. My deposits have fluctuated quite a bit as the expected rates changed so I’m too lazy to check any of that. Oh well, guess I’ll still leave the comment.
I calculated it for myself with some back of the napkin math and I don’t think it’s that far off. I forget exactly what I got for November but I remember I couldn’t replicate their exact number but it was only a couple tenths of a percent higher. I’m not sure how they calculate it and I’m sure I’m not using the most precise calculations of my own, but it seems close enough. I’ll show my calculations for December below.
So far, I’ve won each week:
Week 1: .45
Week 2: 7.90
Week 3: .70
Week 4: .55
After the prizes I have $3261.85 in the account. Technically, November’s savings bonus is showing as deposited on Dec 1, at .55. I am assuming it is not counted as part of the December APY, though maybe it is supposed to be.. Either way, I’ll get about the same savings bonus for the end of December anyway, I think maybe it’ll get bumped up a cent based on the week 2 win?
Anyway if we just assume an additional .55 bonus, that’s 10.15 for the month. 10.15/31 to get the daily rate, then multiplied by 365 for the yearly rate, divided by the starting principle of 3251ish, ie 10.15/31*365/3251 = 3.68%. What’s showing on Yotta is 3.52%. IF we assume it still will add the Dec savings bonus, the Yotta one would be bumped up to about 3.72%.
Obviously the above isn’t exactly how they would calculate any of it, but using my approximate calculations, it seems close enough.
Agree. It seems inflated by my calculations too. I think the simplest calculations is to see how many times your prizes exceed savings bonus (which has a constant 0.2 rate). Multiply that by 0.2 and add 0.2.
Since my balance in account was fluctuating, was looking for a way to calculate my total return.
Yotta breaks down the “savings bonus” and the “prizes”. Since “savings bonus” is 0.2 you get your annualized-principal by doing SavingsBonus*100/0.2. Then prizes/annualized-principal *100 gives u the rate of return of prizes. Rate of return of prizes+0.2 = total return.
Note: u will have to add in the rough savings bonus that u expect for this month, before doing the calculation, or do the calculation at the end of the month after savings bonus has been credited.
Some math wizards in this forum, can verify or correct my method or say this is too obvious. But thought it might be useful for others.
Using this formula, got my total returns in yotta, since account opening at 3.26 (Been with yotta since beginning of July). Of course I expect this to decline in the coming months due to all negative changes in yotta and as referral bonuses dry up. But it was great to see that I got this return