5 ms·

I saw the "Your Money is Secure" section, but after things like the Synapse fiasco, I would like to get confirmation from you. It says my money would be SIPC i

I saw the "Your Money is Secure" section, but after things like the Synapse fiasco, I would like to get confirmation from you. It says my money would be SIPC insured, which means if anything goes missing (obviously not through loss of equity value, but through missing funds or a ledger bug), I get my money back, up to the SIPC limit, right? I just want to ensure this isn't the same situation with fintechs that say your money is "FDIC insured", but that only protects you if the bank fails, not if the fintech goes bankrupt. I'm just really, really wary of new fintech products to save like .3% on fees when I hear all these horror stories of people trusting fintech startups with their money any then losing 95% of their deposits like the Yotta customers.

Cataleya 2y ago
[flagged]
don_neufeld 2y ago
Yup. Zero interest until there is a very clear answer here.
- stavros 2y ago
  Zero interest, just like my bank account.
  - arcticbull 2y ago
    I get like 4% at my bank. Sounds like you need a new bank! I'd suggest starting with Nerdwallet. [1] [1] https://www.nerdwallet.com/h/category/banking https://www.nerdwallet.com/h/category/banking
    - deathanatos 2y ago
      This is always the answer that gets posted. AIUI, though, the decent-interest-rate accounts are only available from online-only banks, and as recently as last year, I was required to visit a branch (…3, as it was…) in order to conduct some transactions, largely due to credit cards having a daily limit. (I also sort of loathe the idea of needing to continually update a bunch of ACH information every year while I chase whatever bank is currently trying to draw customers with a temporarily decent rate.) (And honestly the whole thing is kinda stupid every time I hit it. Businesses tend to give you shocked-pikachu-face when you can't use a CC due to the limit — like you've got to know these exist? And my limit is standard, as they go. And daily limits are trivially circumvented: you just spread the transaction across multiple payments spread out over time. In business, this hack^W method is called a "payment plan".)
      - dmoy 2y ago
        Fidelity can get you a better rate with their treasury money market, which works for Bill pay / etc. They have branches in most major US cities I think.
        camel_Snake 2y ago
        seconding. Recently transitioned to fidelity's cash management account and have done a cash advance on the debit card at a local, non-affiliated bank with 0 fees involved. Checks the boxes for me, personally.
        dmoy 2y ago
        You don't even need to use the official CMA, just a regular old brokerage account ticks basically all the boxes (debit card, checks, bill pay, etc) But yea there's a CMA too ostensibly the CMA offers better atm reimbursement, but then the brokerage debit card also does, so that's weird. The major difference: sweep in CMA is FDIC, the brokerage is SIPC (but held in treasuries). The underlying thing (US government ) is the same, but FDIC has way better turnaround. But because it's FDIC on the underlying bank (Fidelity has no banking charter), it's not clear to me how much benefit that even is. FDIC turnaround is faster, but only for failure of the underlying bank, not fidelity. If fidelity fails, you'll still have some SIPC latency to resolve things, instead of single-business-day FDIC awesomeness.
        neilv 2y ago
        https://www.fidelity.com/spend-save/fidelity-cash-management-account/overview https://www.fidelity.com/spend-save/fidelity-cash-management... (Note that SPAXX was up to about 5% 7-day yield within the last few months, IIRC, but currently 4.25%.)
      - matwood 2y ago
        Open a brokerage account and buy SGOV with your cash savings. Done.
        2y ago
  - blibble 2y ago
    at least with the bank you get your capital back more than can be said for those that trusted another YC fintech (synapse)
- deleted 2y ago
  [deleted]
chasebank 2y ago
IIRC, FDIC only covers the deposits if the underlying bank fails, not the fintec layer built on top of it. Please correct me if I’m wrong.
- hn_throwaway_99 2y ago
  That's literally exactly what I wrote in my comment.
  - chasebank 2y ago
    Either coffee hadn't kicked in yet or an edit on the parent? Not sure but I definitely missed it. Probably the coffee.
- jacobr1 2y ago
  So how does it work now with bank fraud or technical issues? Ignore the fintech layer for a moment, just consider a bank like Chase or Wells Fargo. If their mobile app causes an erroneous transfer, or the backend removes money from your account or maybe doesn't give you the expected interest amount your saving account due to a bug ... what is the recourse? For a reputable company, even if their support is a hassle, they'll probably make you whole eventually. But presume they don't address the issue or repeatedly have widespread issues, what then? Do banking regulators step in? Does the public just need to rely on torts and threat of a suit or bad press?
  - freeone3000 2y ago
    The consumer finance protection bureau is your best bet. Banking regulators will also get involved for patterns of conduct, but this can take years.
    - dboreham 2y ago
      Isn't that getting deleted after January?
runako 2y ago
This from the site feels reassuring: "Your funds are held in your name at Apex Clearing, one of the largest US Custodians holding over $114B in funds." The "in your name" part is specifically what I was looking for.
- hn_throwaway_99 2y ago
  Yeah, FWIW I think their disclosures look good, but I want some explicit reassurance. I want to ensure "in your name" is not the same thing as "for benefit of". The thing that actually gives me the most reassurance is that they say definitively that they are a Registered Investment Advisor. In the Synapse situation, all the regulatory agencies were essentially saying "not my problem" because Synapse itself wasn't covered under any explicit regulatory regime. That doesn't seem to be the case here, but I'd feel better if the founders said something along the lines of "This is how we're different from Synapse..."
  - jjmaxwell4 2y ago
    The account is opened in your name and your securities are held in your name at Apex Clearing. Apex has more than 19M brokerage accounts opened. We are Registered Investment Advisor (RIA) regulated by the SEC.
    - e1g 2y ago
      If you want to hold people's serious money and not play money, understand that priority #1 is not growth or expense ratios - it's risk mitigation. Swiss banks are notoriously expensive and have terrible investment products that hold trillions because of their obsession with protecting capital. As a startup, you must figure out how to convince ordinary people to change their family safety net. Full transparency, audits by a known firm, and an entire brochure/mini-site explaining every significant fintech failure, showing how my money would remain safe if that scenario happened again.
      - murderfs 2y ago
bachmeier 2y ago
> I'm just really, really wary of new fintech products to save like .3% on fees when I hear all these horror stories of people trusting fintech startups with their money any then losing 95% of their deposits like the Yotta customers. That's immediately the scenario that comes to mind when I see any of these offerings (this one might be perfectly legit, but the reality is that I have no way to know). Then I remember George Costanza exploiting a loophole to save money by seeing a holistic healer: https://www.youtube.com/watch?v=8uVSKgMpnuo https://www.youtube.com/watch?v=8uVSKgMpnuo
shmatt 2y ago
This would explain only $10M in AUM within 3 months. Id guess just the commenters on this thread hold 10x that in etfs and funds If a big bank launched this it would have $1B in AUM within less than an hour
- TuringNYC 2y ago
  >> If a big bank launched this it would have $1B in AUM within less than an hour I love the M1 product (and while I am not a Double customer, I love the value proposition). Note that ShareBuilder (eventually Capital One), FolioFN have tried and didnt get traction. Fidelity has "Fidelity Basket Portfolios" and I'm assuming they have no traction -- the product is broken 3 of 5 days of the week, and almost nothing works. I could file a dozen Jira SEV-1 bug tickets "Fidelity Basket Portfolios" is so bad. Chase has a basket product but it is barely surfaced on their OneVest menus.
deleted 2y ago
[deleted]
jjmaxwell4 2y ago
If Double goes out of business, your assets are safe and held in your name at Apex Clearing. They have processes in place for these scenarios to help you access and transfer those assets. SIPC protection covers against a brokerage firm failing, which in our case is Apex Clearing. We are not currently a brokerage so SIPC would not apply if Double goes bankrupt.
- TuringNYC 2y ago
  >> If Double goes out of business, your assets are safe and held in your name at Apex Clearing. They have processes in place for these scenarios to help you access and transfer those assets. >> SIPC protection covers against a brokerage firm failing, which in our case is Apex Clearing. We are not currently a brokerage so SIPC would not apply if Double goes bankrupt. Dear @jjmaxwell4 -- I'm not really worried about your service given you're a layer atop Apex, however, this is a very common conversation happening right now on many forums -- could you clarify a bit more, how one would "get comfortable" with a new product? I'm assuming the list is something like this, but that is an non-expert guess: - Is the institution i'm interacting with regulated (in your case, Yes, Double is regulated by The SEC) - Who holds my funds, and are they regulated (in your case, the funds are held by Apex Clearing, and if I understand correctly, Apex is a broker dealer regulated by The SEC) - Are the funds held in my name or pooled in with other money? (in your case, I think the funds are held by Apex only in my name) I think one of the problems with the Yotta/Synapse/Evolve collapse is -- its unclear how one even evaluates their level of risk. It is also unclear how one validates SIPC coverage, like could I go to SIPC and enter an account number and validate the funds are actually covered somewhere across the layers? Would be great for someone who knows this area to comment.
  - AznHisoka 2y ago
    Ditto. I would really love to know if theres a site where you could enter the ID of a company and tell me if SPIC really backs them up..
  - makrmark 2y ago
    Appreciate diving into the details! You can sign up directly with Apex (completely separate login) and view your holdings in your name in their web portal, along with all documents that Double sends you on your account activity. The process requires a bit of verification so I've written up a help article here on how to get set up: https://help.double.finance/en/articles/10262406-how-can-i-verify-my-holdings-at-apex https://help.double.finance/en/articles/10262406-how-can-i-v...
FactKnower69 2y ago
>I'm just really, really wary of new fintech products to save like .3% on fees off by an order of magnitude, you're saving 0.03% on fees
- pkkkzip 2y ago
  in the long run its negative because order flows are sold to hedge funds who ultimately trade against the masses. I'm also not sure I would trust any fintech startup from YC after Yotta and Coinbase. Matter of fact, I increasingly find YC rewards unscrupulous and morally cavalier founders and products that does more harm to society than good. i find myself increasingly growing wary of YC affiliated founders not to mention the obvious CCP money involved.
- deleted 2y ago
  [deleted]

Cataleya 2y ago

[flagged]

don_neufeld 2y ago

Yup. Zero interest until there is a very clear answer here.

stavros 2y ago
Zero interest, just like my bank account.
- arcticbull 2y ago
  I get like 4% at my bank. Sounds like you need a new bank! I'd suggest starting with Nerdwallet. [1] [1] https://www.nerdwallet.com/h/category/banking https://www.nerdwallet.com/h/category/banking
  - deathanatos 2y ago
    This is always the answer that gets posted. AIUI, though, the decent-interest-rate accounts are only available from online-only banks, and as recently as last year, I was required to visit a branch (…3, as it was…) in order to conduct some transactions, largely due to credit cards having a daily limit. (I also sort of loathe the idea of needing to continually update a bunch of ACH information every year while I chase whatever bank is currently trying to draw customers with a temporarily decent rate.) (And honestly the whole thing is kinda stupid every time I hit it. Businesses tend to give you shocked-pikachu-face when you can't use a CC due to the limit — like you've got to know these exist? And my limit is standard, as they go. And daily limits are trivially circumvented: you just spread the transaction across multiple payments spread out over time. In business, this hack^W method is called a "payment plan".)
    - dmoy 2y ago
      Fidelity can get you a better rate with their treasury money market, which works for Bill pay / etc. They have branches in most major US cities I think.
      - camel_Snake 2y ago
        seconding. Recently transitioned to fidelity's cash management account and have done a cash advance on the debit card at a local, non-affiliated bank with 0 fees involved. Checks the boxes for me, personally.
        dmoy 2y ago
        You don't even need to use the official CMA, just a regular old brokerage account ticks basically all the boxes (debit card, checks, bill pay, etc) But yea there's a CMA too ostensibly the CMA offers better atm reimbursement, but then the brokerage debit card also does, so that's weird. The major difference: sweep in CMA is FDIC, the brokerage is SIPC (but held in treasuries). The underlying thing (US government ) is the same, but FDIC has way better turnaround. But because it's FDIC on the underlying bank (Fidelity has no banking charter), it's not clear to me how much benefit that even is. FDIC turnaround is faster, but only for failure of the underlying bank, not fidelity. If fidelity fails, you'll still have some SIPC latency to resolve things, instead of single-business-day FDIC awesomeness.
      - neilv 2y ago
        https://www.fidelity.com/spend-save/fidelity-cash-management-account/overview https://www.fidelity.com/spend-save/fidelity-cash-management... (Note that SPAXX was up to about 5% 7-day yield within the last few months, IIRC, but currently 4.25%.)
    - matwood 2y ago
      Open a brokerage account and buy SGOV with your cash savings. Done.
      - 2y ago
- blibble 2y ago
  at least with the bank you get your capital back more than can be said for those that trusted another YC fintech (synapse)
deleted 2y ago
[deleted]

chasebank 2y ago

IIRC, FDIC only covers the deposits if the underlying bank fails, not the fintec layer built on top of it. Please correct me if I’m wrong.

hn_throwaway_99 2y ago
That's literally exactly what I wrote in my comment.
- chasebank 2y ago
  Either coffee hadn't kicked in yet or an edit on the parent? Not sure but I definitely missed it. Probably the coffee.
jacobr1 2y ago
So how does it work now with bank fraud or technical issues? Ignore the fintech layer for a moment, just consider a bank like Chase or Wells Fargo. If their mobile app causes an erroneous transfer, or the backend removes money from your account or maybe doesn't give you the expected interest amount your saving account due to a bug ... what is the recourse? For a reputable company, even if their support is a hassle, they'll probably make you whole eventually. But presume they don't address the issue or repeatedly have widespread issues, what then? Do banking regulators step in? Does the public just need to rely on torts and threat of a suit or bad press?
- freeone3000 2y ago
  The consumer finance protection bureau is your best bet. Banking regulators will also get involved for patterns of conduct, but this can take years.
  - dboreham 2y ago
    Isn't that getting deleted after January?

runako 2y ago

This from the site feels reassuring: "Your funds are held in your name at Apex Clearing, one of the largest US Custodians holding over $114B in funds." The "in your name" part is specifically what I was looking for.

hn_throwaway_99 2y ago
Yeah, FWIW I think their disclosures look good, but I want some explicit reassurance. I want to ensure "in your name" is not the same thing as "for benefit of". The thing that actually gives me the most reassurance is that they say definitively that they are a Registered Investment Advisor. In the Synapse situation, all the regulatory agencies were essentially saying "not my problem" because Synapse itself wasn't covered under any explicit regulatory regime. That doesn't seem to be the case here, but I'd feel better if the founders said something along the lines of "This is how we're different from Synapse..."
- jjmaxwell4 2y ago
  The account is opened in your name and your securities are held in your name at Apex Clearing. Apex has more than 19M brokerage accounts opened. We are Registered Investment Advisor (RIA) regulated by the SEC.
  - e1g 2y ago
    If you want to hold people's serious money and not play money, understand that priority #1 is not growth or expense ratios - it's risk mitigation. Swiss banks are notoriously expensive and have terrible investment products that hold trillions because of their obsession with protecting capital. As a startup, you must figure out how to convince ordinary people to change their family safety net. Full transparency, audits by a known firm, and an entire brochure/mini-site explaining every significant fintech failure, showing how my money would remain safe if that scenario happened again.
    - murderfs 2y ago

bachmeier 2y ago

> I'm just really, really wary of new fintech products to save like .3% on fees when I hear all these horror stories of people trusting fintech startups with their money any then losing 95% of their deposits like the Yotta customers. That's immediately the scenario that comes to mind when I see any of these offerings (this one might be perfectly legit, but the reality is that I have no way to know). Then I remember George Costanza exploiting a loophole to save money by seeing a holistic healer: https://www.youtube.com/watch?v=8uVSKgMpnuo https://www.youtube.com/watch?v=8uVSKgMpnuo

shmatt 2y ago

This would explain only $10M in AUM within 3 months. Id guess just the commenters on this thread hold 10x that in etfs and funds If a big bank launched this it would have $1B in AUM within less than an hour

TuringNYC 2y ago
>> If a big bank launched this it would have $1B in AUM within less than an hour I love the M1 product (and while I am not a Double customer, I love the value proposition). Note that ShareBuilder (eventually Capital One), FolioFN have tried and didnt get traction. Fidelity has "Fidelity Basket Portfolios" and I'm assuming they have no traction -- the product is broken 3 of 5 days of the week, and almost nothing works. I could file a dozen Jira SEV-1 bug tickets "Fidelity Basket Portfolios" is so bad. Chase has a basket product but it is barely surfaced on their OneVest menus.

deleted 2y ago

[deleted]

jjmaxwell4 2y ago

If Double goes out of business, your assets are safe and held in your name at Apex Clearing. They have processes in place for these scenarios to help you access and transfer those assets. SIPC protection covers against a brokerage firm failing, which in our case is Apex Clearing. We are not currently a brokerage so SIPC would not apply if Double goes bankrupt.

TuringNYC 2y ago
>> If Double goes out of business, your assets are safe and held in your name at Apex Clearing. They have processes in place for these scenarios to help you access and transfer those assets. >> SIPC protection covers against a brokerage firm failing, which in our case is Apex Clearing. We are not currently a brokerage so SIPC would not apply if Double goes bankrupt. Dear @jjmaxwell4 -- I'm not really worried about your service given you're a layer atop Apex, however, this is a very common conversation happening right now on many forums -- could you clarify a bit more, how one would "get comfortable" with a new product? I'm assuming the list is something like this, but that is an non-expert guess: - Is the institution i'm interacting with regulated (in your case, Yes, Double is regulated by The SEC) - Who holds my funds, and are they regulated (in your case, the funds are held by Apex Clearing, and if I understand correctly, Apex is a broker dealer regulated by The SEC) - Are the funds held in my name or pooled in with other money? (in your case, I think the funds are held by Apex only in my name) I think one of the problems with the Yotta/Synapse/Evolve collapse is -- its unclear how one even evaluates their level of risk. It is also unclear how one validates SIPC coverage, like could I go to SIPC and enter an account number and validate the funds are actually covered somewhere across the layers? Would be great for someone who knows this area to comment.
- AznHisoka 2y ago
  Ditto. I would really love to know if theres a site where you could enter the ID of a company and tell me if SPIC really backs them up..
- makrmark 2y ago
  Appreciate diving into the details! You can sign up directly with Apex (completely separate login) and view your holdings in your name in their web portal, along with all documents that Double sends you on your account activity. The process requires a bit of verification so I've written up a help article here on how to get set up: https://help.double.finance/en/articles/10262406-how-can-i-verify-my-holdings-at-apex https://help.double.finance/en/articles/10262406-how-can-i-v...

FactKnower69 2y ago

>I'm just really, really wary of new fintech products to save like .3% on fees off by an order of magnitude, you're saving 0.03% on fees

pkkkzip 2y ago
in the long run its negative because order flows are sold to hedge funds who ultimately trade against the masses. I'm also not sure I would trust any fintech startup from YC after Yotta and Coinbase. Matter of fact, I increasingly find YC rewards unscrupulous and morally cavalier founders and products that does more harm to society than good. i find myself increasingly growing wary of YC affiliated founders not to mention the obvious CCP money involved.
deleted 2y ago
[deleted]