[HN Gopher] Show HN: Earn 9.62% on US Treasury I Bonds on Yotta
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Show HN: Earn 9.62% on US Treasury I Bonds on Yotta
Hey all My name is Adam, and I'm a co-founder at Yotta (YC S20),
an app that uses behavioral psychology to help people save money by
making saving exciting. We built a feature on Yotta where you can
earn 9.62% APY via US Treasury I Bonds.
(https://www.withyotta.com/i-bonds) This is an absurd yield for a
security that is backed by the full faith and credit of the United
States Government - the strongest guarantee you can get. For
comparison, most high-yield savings accounts with FDIC coverage are
paying ~2%. The backstory: I Bonds were established by the US
Treasury in 1998 to provide returns linked to inflation to protect
consumer purchasing power. The rate on I Bonds is determined from
the last six months of CPI data and is adjusted twice per year.
Inflation is typically around 2% per year, so I Bonds have never
been relevant since the rate was never that attractive. Inflation
spiked in 2022 driving I Bonds reached a record high yield of 9.62%
APY. If you buy them by October 31st, you lock in this rate for six
months from the purchase date. In the last 12 months, around $27B
has been deposited as a result of the insanely high yield. This
compares to $348m in 2020. Note that you have to hold I Bonds for
at least a year and you forgo 3 the last three months of earned
interest if you redeem before five years. You can deposit a max of
$10k into I Bonds per calendar year. So if you can get 9.62% APY
on a government backed security when savings accounts are yielding
2%, why doesn't everyone have I Bonds? A few reasons. 1. Most
people have never heard of them. 2. People don't want to tie up
cash for a year in a CD-like product. 3. The only way to buy I
Bonds has been on the world's worst website, Treasury Direct. You
have to fill out long forms, click on a virtual keyboard to type
your password, can't use the back button, and make one mistake and
you get locked out of your account. The whole thing is a colossal
pain in the ass. To solve 1) and 3), we wrapped an easy-to-use UI
to buy I Bonds within Yotta. Users opt into Yotta creating a
Treasury Direct account on their behalf, and we automate the
painful part - interacting with Treasury Direct on the backend.
This enables us to provide a great customer experience, making it
easy for people to get the 9.62%. If anyone wants to control their
Treasury Direct directly without Yotta, they can request it, and we
will transfer over their account to no longer be managed by Yotta.
Hope you guys check it out and can take advantage of the 9.62% rate
before 10/31! Note that if you already have a Treasury Direct
account, we are unable to support you for I Bonds unfortunately.
Happy to answer any questions and looking forward to any feedback.
P.S. We were featured in Bloomberg for the launch last week if you
want to check that out
https://www.bloomberg.com/news/articles/2022-09-28/buying-i-bonds-
there-s-an-easier-way-to-earn-9-62-interest
Author : adammoelis
Score : 43 points
Date : 2022-10-05 17:58 UTC (5 hours ago)
| pingle wrote:
| If you've already bought, say $5k, through treasury direct, can
| you buy your remaining $5k allotment through Yotta?
| adammoelis wrote:
| Unfortunately not. We can only support accounts that haven't
| previously created Treasury Direct accounts.
| koliber wrote:
| Are US citizens who live abroad able to use Yotta to create a
| TreasuryDirect account? I ask because the normal process requires
| one to get a form notarized with an American notary public, which
| is hard to do abroad.
| rkagerer wrote:
| That last link, without the paywall: https://archive.ph/ZKCEi
| adammoelis wrote:
| Thanks - good idea
| alexwasserman wrote:
| Yotta looks incredibly similar to what Simple once was (before
| being bought out and shutdown). The key Simple feature being the
| ability to allocate and lock portions of bank account holdings to
| specific goals, so you held it but couldn't spend it. Looks very
| similar to the buckets.
|
| I loved my Simple account, this looks like a great replacement
| for it.
| sparrish wrote:
| So how does Yotta make money? Do you charge to open an account or
| take a slice when the bond matures?
| adammoelis wrote:
| We don't. There is a completely optional way to pay us what you
| want when you buy the I Bond, but this is a brand awareness
| play for us. Our hope is to drive new acquisition and to
| convert a portion of that acquisition to other products down
| the road.
| kloch wrote:
| > All the time our customers ask us - how do you make money
| doing this? The answer is simple: Volume
|
| https://www.youtube.com/watch?v=KodqIPMbyUg
| adammoelis wrote:
| We don't make money really on I Bonds. User acquisition
| play.
| teraflop wrote:
| I'm curious about how the legalities of this work.
|
| If you create a TreasuryDirect account using my SSN, do you then
| require a durable power of attorney to manage it on my behalf, as
| laid out in 31 CFR SS 363.33? Or are you simply logging in using
| "my" credentials and performing actions as if you were me? If the
| latter, are you at all worried about the Treasury Department
| cracking down on this?
| adammoelis wrote:
| We do the latter. Performing actions as if we were you. I am
| not worried given that.
| codingdave wrote:
| Well, if the guy selling it isn't worried, we're in the
| clear, right everyone? /s
|
| I liked the description of the product when I first read it.
| I really did. But I'm losing confidence the more OP keeps
| pushing in the comments.
|
| This might be a decent product, but I'm wary of someone who
| is pushing hard to let them create investment accounts on
| other platforms on our behalf. It just feels like the kind of
| thing that when it blows up in the future, hindsight will
| say, "Why did you let someone do that in the first place?"
| klyrs wrote:
| You have sold me on I Bonds as a financial product, but
| you'll never touch my money. Hire a lawyer.
| UncleMeat wrote:
| > I am not worried given that.
|
| YOLO is definitely an interesting approach for a financial
| company. Didn't people shit all over Plaid for taking this
| approach? Training people to give their financial credentials
| to 3rd parties is not the best.
| tevon wrote:
| If I were him, I'd be pretty stoked about the Plaid
| comparison.
|
| Keep it up! You're acting for the good of the user, YOLO
| it.
| notch656a wrote:
| Hey, cut him some slack, he did say he was in the business
| of "making saving exciting." The risk of handing over your
| financial credentials is exciting because you never really
| know what may happen!
| paxys wrote:
| You don't need power of attorney to act on someone's behalf
| with their explicit permission and instruction. It may be
| against TreasuryDirect's terms of service (I have no idea, I
| haven't read them), but there's nothing specifically illegal
| about this.
| dpifke wrote:
| Interestingly, TreasuryDirect's terms of service are codified
| in the Code of Federal Regulations:
|
| https://www.law.cornell.edu/cfr/text/31/part-363/subpart-B
|
| From a brief reading, having a third party access your
| TreasuryDirect account does seem problematic:
|
| https://www.law.cornell.edu/cfr/text/31/363.22
|
| https://www.law.cornell.edu/cfr/text/31/363.17
| KindAndFriendly wrote:
| I already have a TD account, so I can't use Yotta :-/
|
| Can anyone tell me the ID of the bonds inside of TD which would
| be bought through Yotta?
| adammoelis wrote:
| What do you mean exactly by ID? We do Series I Bonds.
| abandohess wrote:
| Can I access my TD account after it's created by Yotta?
| adammoelis wrote:
| Yes just reach out and on request, we can give you full access
| to your Treasury Direct account any time.
| theonething wrote:
| I think this indirectly answered my question. What if Yotta
| goes out of business or decides to stop supporting this?
|
| We'll just get direct access to our TD account. Doesn't sound
| like this would happen automatically though? So if you guys
| suddenly closed shop with no warning, what recourse do we
| have?
| rkagerer wrote:
| What happens if you go out of business and a user doesn't
| realize until a year or more afterwards that they should have
| asked you for that info? Can they "reclaim" their Treasury
| Direct account down the road without you?
| adammoelis wrote:
| Yeah we have very easy way to give you your TD account
| directly. If this were to happen, we would give access to
| everyone and ensure they received the information to take
| over their accounts.
| rkagerer wrote:
| Thanks for the response. Is there any way a customer who
| slips through the cracks could do that directly with TD?
| (e.g. "I'm Jim Kirk, here's my ID, a notarized affidavit,
| a blood sample...")
| bm3719 wrote:
| I Bonds are 30 year bonds. Since the I Bond yield of 9.xx% is
| only guaranteed for the first 6 months, what's the consensus
| thinking here on a long term hold of them?
|
| Some info I found says: I bonds cannot be cashed
| for one year after purchase. If a bond is cashed in year
| two through five after purchase, the prior three months of
| interest are forfeited. There is no interest penalty for
| cashing in the bonds after five years.
|
| Sounds like you'd have to hold them for at least 1.25 years then
| to get a year's worth of interest.
| brk wrote:
| IMO, it's not worth over thinking. The rates are very good, but
| you are limited to a relatively small amount of money. My wife
| and I both bought an I bond at the recent rates. If we're
| lucky, we'll make about $1,000 each on them. You can do a lot
| with $1,000, but it's not like we're talking about life
| altering amount of money here (in the context of people who can
| afford to put $10K in an I bond in the first place). We
| basically used money that would ordinarily be earning less
| interest in some kind of emergency-funds checking account.
|
| It probably would not be worthwhile in the grand scheme of
| things to take $10,000 from some kind of actual investment
| account and move it over to these I bonds for a brief duration.
| bm3719 wrote:
| That's true. I'll probably grab one once the official site
| works again, but I was weighing that, plus the inconvenience
| of having to manage funds in yet another location and keep
| the tax implications in mind (you only have to pay federal
| taxes on interest here).
| francisofascii wrote:
| Is this the same as buying an inflation protected bond ETF? (TIP)
| adammoelis wrote:
| No these are different securities. I Bonds are very unique in
| how they are structured.
| seancoleman wrote:
| Feedback: I found a bug. I signed up with email/password, and
| then accidentally closed the tab (after creating my account).
| When I tried to sign in, it's asking for a code sent "to my
| phone" -- I never provided my phone number, and therefore can't
| sign in.
| adammoelis wrote:
| Thanks - reported this for us to look into. Will circle back
| brk wrote:
| My wife and I both bought I Bonds directly. It was not exactly a
| painful or confusing process at all. Granted, the UI/UX of the US
| government bonds website was not fantastic, but it was certainly
| usable.
| Rebelgecko wrote:
| Other than their goofy login page (which you can fix with a
| 1-liner in greasemonkey), I actually love the TreasuryDirect
| website. This is maybe a controversial opinion but it's one of
| my favorite US government websites.
|
| The UX is awesome and the layout is simple: no popups,
| interstitials or other BS. Even better, the page load times and
| responsiveness are significantly better than any other
| financial website a visit. I can check log in AND check my
| TreasuryDirect balance in about the same time it takes me to
| log into my Schwab brokerage account or load a thread on
| Reddit.
|
| Their FAQs are also written in an easily understandable way,
| which is good because I Bonds and the other bonds they sell
| have some complicated nuances. They even update the FAQs
| regularly so that all their I Bond example calculations use the
| current semiannual interest rate.
|
| One thing that would be cool about this Yotta offering is if
| they automate some of the I Bond annoyances (I needed a
| medallion stamp to open my account although not everyone is
| that unlucky), give a consolidated view of purchases and
| holdings across across multiple SSNs and EINs, and centralize
| that management.
| hotpotamus wrote:
| I 100% agree; the login is goofy, but overall I prefer the
| site because it uses a relatively simple UI (and isn't
| concerned with the latest design fad) to show me relatively
| simple data. I use Ally for retail banking and now the page
| loads but it takes several (very noticeable) seconds to load
| my account balances and while it's doing that, I have to
| wonder how computers which can do literally billions of
| operations per second with multi-gigabyte network links can
| take so long to load a single number. I'll take the 1998 look
| over that any day.
| adammoelis wrote:
| Thanks for the feedback and thoughts. I guess those aspects
| of TD are nice, but if you ever make a mistake, they don't
| handle it gracefully.
| Rebelgecko wrote:
| Just curious, how do you handle accounts that require
| medallion verification to open. Do you stamp it yourself?
| That could be a nice benefit for people that don't have a
| brick and mortar bank nearby
| adammoelis wrote:
| We can't support those unfortunately right now. Maybe in
| the future.
| adammoelis wrote:
| Glad you didn't have to deal with any of Treasury Direct's
| nonsense. If you make a mistake logging in, you have to wait on
| hold with customer support for around 2 hours.
| bagacrap wrote:
| real yields on TIPS are roughly 2% which likely makes them a
| better bet than ibonds now. IBonds real yield is approx 0.
| donclark wrote:
| Do you have data/URL on this that you can share please?
| UncleMeat wrote:
| TreasuryDirect. It shows the rates for both kinds of bonds.
| Today's Ibonds have a real yield of 0.00% and are expected to
| keep at that rate for a while. The variable yield is based on
| inflation, which was very high but has been much more muted
| for the past several months. That flashy 9.62% is going to be
| much much lower when it swaps.
|
| TIPS currently have a nonzero real yield.
| paxys wrote:
| Everyone here is criticizing your product but it's funny that as
| I type this https://www.treasurydirect.gov/ is completely down. I
| wish this was available back when I invested and had to navigate
| my way through that hellish website.
| typpo wrote:
| Saw this post, signed up on TreasuryDirect.gov, and it
| immediately went down. That'll teach me for not using Yotta.
| adammoelis wrote:
| Thank you - Treasury Direct is the worst.
| jonnybgood wrote:
| Doesn't look down to me
| tiku wrote:
| Is it only for American citizens? Or can anyone get sweet yield
| and invest?
| adammoelis wrote:
| You need a US SSN or TIN
| bithavoc wrote:
| Can a foreigner, non-living in USA, get a TIN?
| tiku wrote:
| Can't get past pin code confirmation on my cell phone
| anyway..
| adammoelis wrote:
| I don't think TD does pin confirmations via sms
| paxys wrote:
| From treasurydirect.gov:
|
| - The person must have a Social Security Number.
|
| - The person must also meet any one of these three conditions:
| - United States citizen, whether the person lives in the U.S.
| or abroad, or - United States resident, or
| - Civilian employee of the United States, no matter where that
| person lives
| c0nsumer wrote:
| Why would I want to use your company for buying an I-Bond myself?
| Treasury Direct kinda sucks, but it's really not that bad. And
| once you're through the initial setup repeat purchases (like each
| subsequent year) is a lot easier.
|
| Why would I want to insert a middleman into a long term
| investment? If you all go sideways -- which is incredibly likely
| within the next 10 years -- then it'll be far more hassle than
| the up-front TD signup irritation.
| adammoelis wrote:
| 1) Easier UI and management of your I Bonds. Treasury Direct
| has lots of issues and you'll likely end up having to call in
| and wait on hold for 2 hours with customer support at some
| point. Maybe not if you're on top of things, but most people
| aren't.
|
| 2) Having your money all in one place. It's annoying to have
| money different places, so if you already have a Yotta account
| with us, it's one tap to do this. If you are starting from
| scratch, it's not as much of a no-brainer, but I still think
| it's much better than TD.
|
| If we go sideways, we would just give everyone their TD account
| information directly, and you would take over your account.
| DoesntMatter22 wrote:
| Are there legal protections to ensure that you'll give us the
| TD account directly, like is it like a bank or is it that we
| just have to trust you?
| adammoelis wrote:
| Yes it would not be legal if we didn't give you access. So
| there are protections there.
| cantSpellSober wrote:
| They just updated the Treasury website in order to meet demand.
| You took away your value add for Point #1 by making this post,
| and Point #3 isn't really that hard anymore.
|
| Thank you for your transparency in advertising.
| adammoelis wrote:
| They only updated the front end main landing pages, not the
| core experience of opening accounts logging in, filling out
| forms, making mistakes. That is all the same as it's always
| been. Painful.
| ryandrake wrote:
| Although the TreasuryDirect UX is pretty bad, it's not impossible
| to navigate. My biggest beef with TD is that there appears to be
| no way to convert the bonds purchased electronically to paper
| bonds. You have to keep them on the web site, which seems risky.
| You are hoping that 1. their database does not get corrupt or
| something and they lose tens of thousands of your dollars, 2.
| your account doesn't get compromised, 3. your account doesn't get
| banned or deleted.
|
| With a bank, you (typically) have a brick-and-mortar building you
| can walk into to resolve edge case problems, and also FDIC
| insurance. For brokerages, you have SIPC for fraud and sloppy
| accounting, and usually have decent telephone support. TD has a
| phone number--that's it. Ever try calling it? It's a long hold
| time, and who knows if they can even handle these edge cases. Who
| would you sue if you lost your account or became a victim of
| fraud?
| pradn wrote:
| This is a fantastic initiative. Yotta is gamifying savings,
| because why not? And it's FDIC-insured so I don't have to worry
| about trusting money to a start-up.
|
| I think the UI-improvement over dealing with the treasury website
| is substantial. Good work on finding the opportunity and setting
| it up transparently via your already-existing buckets feature.
|
| A note of appreciation, that's all.
| adammoelis wrote:
| Thank you - appreciate it!
| MrFoof wrote:
| Been using Yotta since the early access-ish launch. I was
| always prowling for something like it once the American
| Savings Promotion Act (https://en.wikipedia.org/wiki/American
| _Savings_Promotion_Act) was passed. Does its job, does it
| easily, and my effective APY has been MORE than competitive.
| For certain.
|
| I have always bought I-bonds direct so doesn't apply to me,
| but making that easier for the average person -- and more
| importantly, increasing awareness of their existence -- is a
| good thing. It's about accessibility for people still getting
| their financial footing.
|
| Just getting the average person to save more is a good thing,
| and accessibility is key to that.
| adammoelis wrote:
| Thank you!
| pb7 wrote:
| Your I Bonds are not FDIC-insured. FDIC does not insure bonds.
| If your account gets compromised, there's nothing they can do
| for you.
|
| https://www.fdic.gov/resources/consumers/consumer-news/2022-...
| dpifke wrote:
| TreasuryDirect doesn't have an API, so there's no way to
| implement this without storing your users' TreasuryDirect
| passwords. How do you protect those passwords?
|
| With reference to https://www.law.cornell.edu/cfr/text/31/363.17,
| what recourse would I have if I use your service and my
| TreasuryDirect account is compromised as a result?
|
| Your other products include FDIC insurance via Evolve Bank &
| Trust. I can't imagine the FDIC would cover losses related to
| this product--i.e. funds are only FDIC-insured up until they're
| used to purchase an I-Bond. The FDIC recently sent a cease-and-
| desist to FTX in relation to a similar scheme (in FTX's case,
| funds are only FDIC-insured at Evolve up until they are used for
| cryptocurrency purchases); see
| https://news.ycombinator.com/item?id=32524527. In light of that
| action, what have you done to clarify the limits of the FDIC
| insurance to your customers and potential customers?
| room505 wrote:
| Add this to your uBlock filter:
| treasurydirect.gov##+js(remove-attr, readonly, input.pwordinput)
| UncleMeat wrote:
| You can't get 9.62% APY.
|
| The final data isn't available, but the upcoming rate is going to
| be _way_ lower.
| dpifke wrote:
| The yield changes every 6 months. I-bonds bought on or before
| October 31st are considered retroactive purchases to the 1st of
| the month, and keep the 9.62% rate until the 1st of April.
|
| This is disclosed on the linked page
| (https://www.withyotta.com/i-bonds):
|
| _I-Bonds purchased now through the end of October will have a
| 9.62% Interest Rate guaranteed for 6 months. Future changes in
| rates are not disclosed by the US Treasury._
| sometimeshuman wrote:
| Is this service only for individuals or can you set up an account
| for my corporation too ? The process of setting up a treasury
| account for my business at Treasury Direct is stalled for some
| reason.
|
| Edit: I noticed a related comment:
|
| Rebelgecko: how do you handle accounts that require medallion
| verification
|
| adammoelis: We can't support those unfortunately right now.
|
| That was the problem on my end. I went through the hassle of
| getting a medallion verification for my business 2 months ago,
| mailed in the paperwork, and never heard back from the treasury
| department.
| joncfoo wrote:
| The virtual keyboard on the Treasury Direct login page is
| terrible, especially for those of us who use a password manager.
| I use the following bookmarklet that "types" each letter via the
| exposed JavaScript function on the page itself.
| javascript:prompt('treasurydirect.gov password
| please').split('').forEach(PasswordVK)
|
| easy-peasy
| hemloc_io wrote:
| hah! I edit the frontend html every time so I can use my
| password manager
| joshiee wrote:
| Meh imo it's easier to have the bookmarklet remove read only on
| the form and then just use the password manager like normal
| sebk wrote:
| Similarly, I have a Greasemonkey userscript to remove the
| readonly attribute for the password input form so my password
| manager works: for (const e of
| document.getElementsByClassName("pwordinput")) {
| e.removeAttribute('readonly'); }
| adammoelis wrote:
| Does any other website in the world use a virtual keyboard like
| that? I don't really understand why they do it. To prevent
| keystroke tracking I guess? It's bizarre.
| ryandrake wrote:
| I always just paste my password into the field. That's always
| worked for me. Safari/macOS.
| adammoelis wrote:
| Didn't know pasting worked.
| hirop wrote:
| Yes I believe it's to counter key loggers.
| testesttest4 wrote:
| Yea, start 5 LLCs and have them each by ibonds to get around 10K
| limit I would be more interested. As is, treasury direct website
| is fine.
| sebhook wrote:
| I hope everyone reading this post knows how easy it is for Yotta
| to open any account at any other brokerage with this information.
| From there, they could initiate a transfer from your OTHER (non-
| Yotta) brokerages and drain your account. It really is that easy
| with the in-kind (or ACAT) process. Even if Yotta isn't
| nefarious, they could be hacked and a bad actor could use your
| data to accomplish the same thing.
|
| I recommend locking down all of your investment accounts,
| Fidelity specifically has a lockdown mode designed for this. You
| can still trade/add money/pay bills, but no one can drain your
| account just because they opened up another account with your
| SSN.
|
| https://www.nerdwallet.com/article/investing/switch-brokers-...
| sp332 wrote:
| Also, individuals can only buy $10,000 of I bonds per year, plus
| your tax return up to another $10,000.
| adammoelis wrote:
| Correct - good point. Edited the post to add this piece of info
| which is important.
| awb wrote:
| https://www.treasurydirect.gov/savings-bonds/i-bonds/
|
| >Is there a maximum amount I can buy?
|
| > In a calendar year, one Social Security Number or one
| Employer Identification Number may buy:
|
| > * up to $10,000 in electronic I bonds, and
|
| > * up to $5,000 in paper I bonds (with your tax refund)
|
| > For individual accounts, the limits apply to the Social
| Security Number of the first-named in the registration.
| belltaco wrote:
| > plus your tax return up to another $10,000.
|
| $5K, not 10K.
| [deleted]
| mherdeg wrote:
| There's a $10k annual limit per individual, LLC, or trust. (Plus
| a bit more as paper I bonds in your income tax refund.)
|
| Can you partner with Stripe Atlas to help me spin up a trust or
| business entity and buy another $10k? I'll pay you a 5%
| commission.
| adammoelis wrote:
| Not a bad idea...
| mindslight wrote:
| You can create as many simple revocable trusts as you'd like
| using a Nolo offering and a visit to your bank for
| notarization.
|
| I've heard TD will sometimes complain about a trust with your
| SSN as its TIN, but I've had no problems. After all, it is
| still a separate entity and that is the technical requirement.
|
| Managing your own records and dealing with TD's horrible login
| process are the main hoops to creating multiple accounts. I
| appreciate the GreaseMonkey snippets for fixing their password
| input (listed elsewhere in this thread).
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