Yotta Savings, Interest Rate & How it Works?

Yotta savings : App for saving money Yotta Savings, a company cofounded by two Under 30 winners, said today that it has secured $13.2 million in a Series A round headed by Base10 Partners and including Y Combinator, Core Innovation Capital, and Slow Ventures.

In Yotta’s prior round, notable supporters included billionaire Cliff Asness and Ken Moelis.

Yotta, a savings app cofounded by under 30 entrepreneurs, has raised $13 million in a Series A funding round

Yotta is a smartphone application in which a user registers, links their external bank account, deposits money into their Yotta savings account, and instead of receiving interest on their savings balances like they would in a regular bank, they earn tickets ($25 each) with Yotta.

They can win rewards ranging from 10 cents to $10 million with each of these tickets.

According to Adam Moelis, cofounder and CEO of Yotta, 40% of Americans have $400 in emergency funds, despite the fact that the average household spends over $600 each year on lottery tickets.

According to Moelis, persons who play the lottery and those who have very little or no money have a lot in common.

“The reason why individuals struggle to save is because saving pays off in the long run but provides no immediate gratification, whereas playing the lottery provides instant gratification but is terrible for you in the long run,” Moelis explains.

Yotta makes money by receiving payments from partner banks on their balances and interest rates, which they then pass on to the end user in the form of prizes.

Yotta will have almost 8 million tickets deposited this week, totaling $200 million.

Around 2% of the tickets will be winners, with the most typical winning sum being in the $10-20 cent area.

130,000 people have signed up for Yotta since its start in July of last year, 90,000 have a balance in their Yotta account, and 60,000 have a ticket this week.

“We’ve heard from a lot of consumers that it scratches the same itch they’d get otherwise, but in a safer way,” says Doyle, cofounder and CTO.

“People prefer the thrill, optimism, and potential to win large when it comes to tiny dollar amounts, rather than getting one or two dollars guaranteed from the bank where they’re saving. That’s the psychology at the root of it.”

All of the funds are insured up to $250,000. They are insured by Yotta’s partner bank, Evolve Bank and Trust.

Moelis, a Wharton graduate, and Doyle, a University of Michigan graduate, met in New York through Moelis’ cousin, who was Doyle’s roommate in the city.

In October of 2019, the two cofounded the company, and the platform became online in July of 2020.

Since then, the two have taken part in Y Combinator’s Summer class and have been named to the 2021 Under 30 Social Impact list.

According to Moelis, they plan to expand their banking services in the near future.

“We’ll be offering a debit card shortly, and we’ll be more of a full bank account than just a savings account,” says Moelis.

“People will be able to spend from their account and do a lot of the things you’d anticipate from a digital banking product,” says the author.

The company previously raised a $500,000 pre-seed round and a $4 million seed round in New York.

According to TJ Nahigian, cofounder and managing partner at Base10 Partners, which led the Series A, Moelis and Doyle founded Yotta to inspire Americans to save while simultaneously having a fun gaming experience.

“Essentially, it was created to assist in the transformation of existing user habits that may not be particularly productive or savvy into something that will benefit them in the long run,” Nahigian explains.

“This game and lottery-like mechanic will be embedded into the heart of Yotta’s products in the future, so it will be a way to both have fun and reward people for making wise personal finance decisions.”