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I remember when this came up on my Facebook feed a year or so ago. I shat all over it because they were essentially taking money in, calling it "saving" and the

I remember when this came up on my Facebook feed a year or so ago. I shat all over it because they were essentially taking money in, calling it "saving" and then not paying out any interest. Have they fixed that? Sort of. They now pay a $0.05 "savings bonus" for every $100 you hold with them for 3 months, for an annualized interest rate of 0.2%. Needless to say, the savings bonus won't go up when interest rates go up: it is a "savings bonus" and not an interest rate, after all. Let's call this what this is: a gimmicky savings account with a crappy APY. Call me when their savings algorithm is mated with an automatic investment in my choice of low cost mutual funds.

reustle 11y ago
Isn't that what Acorns does? http://acorns.com/ http://acorns.com/
- kchoudhu 11y ago
  I wasn't aware of them -- but yes, it is. 0.25% in fees is kind of rich for a pure passthrough service, though.
  - easytiger 11y ago
    anything charged as a percentage is a scam; and yet many industries are fully based on it (e.g. property). There is no justification in almost all services to charge a percentage where no risk is assumed.
    - pc86 11y ago
      It's about ability to pay. Of course it's extremely unlikely for a realtor to do $30k worth of work to sell a $1 million house. But they're also going to work to sell that $60k house and they will probably put in more than $1,800 worth of their time. Having a flat fee would make it practically impossible for the poor or even lower middle class to sell their homes without having to write a check for the privilege.
      - smileysteve 11y ago
        > But they're also going to work to sell that $60k house and they will probably put in more than $1,800 worth of their time. I find this uncommon. Many cheaper houses (<100k) in Atlanta won't be supported by Zillow. Similarly, cheaper homes will not have many pictures, sometimes just a street view picture. And if you do call a realtor to look at these, they vet you much more thoroughly than a 200-300k house.
dood 11y ago
I think that is a bit harsh. Some people find saving very difficult. Interest rates are rock-bottom anyway. This is a service which, for a small fee, helps you to save if you are really bad at it. It's not for me, but I can see this being a starting point for someone who has never managed to save successfully.
- kodablah 11y ago
  > for a small fee It claims to be free
  - 1stop 11y ago
    It is, like google is free.
callumlocke 11y ago
I've come to think savings interest is bullshit. In the past, whenever I calculated how much I'd earn in interest if I put away a decent part of my salary every month, it was always shockingly low, and this put me off saving. Now I think of saving purely as a way to put money out of my immediate reach. For me, the reason for saving £200/month is simply that after a year I'll have £2.4k, not so I can get a paltry amount of interest on top of that. From this point of view, all that matters in a savings account is customer service and what you call gimmicks. I would definitely try out this service if it came to the UK. I totally accept some people may choose to give their finances the time and attention necessary to earn real interest, but for me saving is just paying future-me some money.
- lsd5you 11y ago
  That's why it's called savings and not investment (I realise in some economic sense they are equivalent). We have been engaged in collective madness over investment/savings returns. I remember conversations (probably 2007ish) where I was trying to point out to a banker that the nominal return cannot exceed inflation in the long run. How is it that pension funds can be predicated on a 6-8% return. Well it only works if we have a 1) a crash every so often wiping out everyones gains or 2) hyper inflation (or 3 some other people just giving money away). In fact we seem to have reached a somewhat contradictory outcome where assets inflated once, and then we continue to live with low returns and inflated assets (some people would have it that the baby boomers are protecting their wealth), the zombie japanese economy mode. It is a somewhat arbitrary and feudal system of haves and have nots. You bought a house at the right place/time? Well you're a millionaire now (even if you paid nothing but intrest on the mortgage). Anyway it would seem to make a mockery of the economic precepts by which the modern economy is supposed to run. I have always been pro-crash (even more so anti-boom).
  - CPLX 11y ago
    > I was trying to point out to a banker that the nominal return cannot exceed inflation in the long run Someone should point out that this line of reasoning is just flat wrong for reasons obvious to any first year economics student.
Spooky23 11y ago
In 2005, when online savings were paying 5%, i would agree. Now, "high yield" savings pays 0.75%, and normal banks are 0.1% or less. If something like this helps you avoid spending, it's probably worth it.
jonknee 11y ago
Have you looked at interest rates lately? No one even wants deposits these days.
thescriptkiddie 11y ago
You're missing one huge benefit of this, and honestly it seems like they are too. For me, the biggest draw of a service like this is keeping your savings relatively inaccessible. Whatever money they're holding for you can only be accessed with a ~24 hour delay, which gives you pause before you blow it on something stupid, but is still quick enough for emergency use. They should really push this as a feature. They should make the delay arbitrarily configurable. They could have an option where you have to ask for a withdraw twice with a delay in between. They could even have an option where you have to explain what you need the money for. They could have a human send you an SMS trying to talk you out of any stupid purchases, but even just writing an explanation to /dev/null would help a lot of people avoid impulse buys. Plus, 0.2% APY is still better than my savings account pays.

reustle 11y ago

Isn't that what Acorns does? http://acorns.com/ http://acorns.com/

kchoudhu 11y ago
I wasn't aware of them -- but yes, it is. 0.25% in fees is kind of rich for a pure passthrough service, though.
- easytiger 11y ago
  anything charged as a percentage is a scam; and yet many industries are fully based on it (e.g. property). There is no justification in almost all services to charge a percentage where no risk is assumed.
  - pc86 11y ago
    It's about ability to pay. Of course it's extremely unlikely for a realtor to do $30k worth of work to sell a $1 million house. But they're also going to work to sell that $60k house and they will probably put in more than $1,800 worth of their time. Having a flat fee would make it practically impossible for the poor or even lower middle class to sell their homes without having to write a check for the privilege.
    - smileysteve 11y ago
      > But they're also going to work to sell that $60k house and they will probably put in more than $1,800 worth of their time. I find this uncommon. Many cheaper houses (<100k) in Atlanta won't be supported by Zillow. Similarly, cheaper homes will not have many pictures, sometimes just a street view picture. And if you do call a realtor to look at these, they vet you much more thoroughly than a 200-300k house.

dood 11y ago

I think that is a bit harsh. Some people find saving very difficult. Interest rates are rock-bottom anyway. This is a service which, for a small fee, helps you to save if you are really bad at it. It's not for me, but I can see this being a starting point for someone who has never managed to save successfully.

kodablah 11y ago
> for a small fee It claims to be free
- 1stop 11y ago
  It is, like google is free.

callumlocke 11y ago

I've come to think savings interest is bullshit. In the past, whenever I calculated how much I'd earn in interest if I put away a decent part of my salary every month, it was always shockingly low, and this put me off saving. Now I think of saving purely as a way to put money out of my immediate reach. For me, the reason for saving £200/month is simply that after a year I'll have £2.4k, not so I can get a paltry amount of interest on top of that. From this point of view, all that matters in a savings account is customer service and what you call gimmicks. I would definitely try out this service if it came to the UK. I totally accept some people may choose to give their finances the time and attention necessary to earn real interest, but for me saving is just paying future-me some money.

lsd5you 11y ago
That's why it's called savings and not investment (I realise in some economic sense they are equivalent). We have been engaged in collective madness over investment/savings returns. I remember conversations (probably 2007ish) where I was trying to point out to a banker that the nominal return cannot exceed inflation in the long run. How is it that pension funds can be predicated on a 6-8% return. Well it only works if we have a 1) a crash every so often wiping out everyones gains or 2) hyper inflation (or 3 some other people just giving money away). In fact we seem to have reached a somewhat contradictory outcome where assets inflated once, and then we continue to live with low returns and inflated assets (some people would have it that the baby boomers are protecting their wealth), the zombie japanese economy mode. It is a somewhat arbitrary and feudal system of haves and have nots. You bought a house at the right place/time? Well you're a millionaire now (even if you paid nothing but intrest on the mortgage). Anyway it would seem to make a mockery of the economic precepts by which the modern economy is supposed to run. I have always been pro-crash (even more so anti-boom).
- CPLX 11y ago
  > I was trying to point out to a banker that the nominal return cannot exceed inflation in the long run Someone should point out that this line of reasoning is just flat wrong for reasons obvious to any first year economics student.

Spooky23 11y ago

In 2005, when online savings were paying 5%, i would agree. Now, "high yield" savings pays 0.75%, and normal banks are 0.1% or less. If something like this helps you avoid spending, it's probably worth it.

jonknee 11y ago

Have you looked at interest rates lately? No one even wants deposits these days.

thescriptkiddie 11y ago

You're missing one huge benefit of this, and honestly it seems like they are too. For me, the biggest draw of a service like this is keeping your savings relatively inaccessible. Whatever money they're holding for you can only be accessed with a ~24 hour delay, which gives you pause before you blow it on something stupid, but is still quick enough for emergency use. They should really push this as a feature. They should make the delay arbitrarily configurable. They could have an option where you have to ask for a withdraw twice with a delay in between. They could even have an option where you have to explain what you need the money for. They could have a human send you an SMS trying to talk you out of any stupid purchases, but even just writing an explanation to /dev/null would help a lot of people avoid impulse buys. Plus, 0.2% APY is still better than my savings account pays.