Hacker News Reader

Comment by adav | Hacker News Reader

This looks really neat :) But I do wonder how well the Premium Bond (PB) idea will work when not backed by the state (NS&I, who issue PBs in the UK, is backed by the treasury). I would personally worry that my deposit will just be used for prizes in a Ponzi scheme situation.

Another thought is that while it is true that in the UK a large number of the population have PBs, these are usually bought by their parents when they are born. I still have my PB account that was set up by my parents, but I wouldn't consider it a tool for saving. Most people's balance in PBs are a tiny proportion of their total savings. Yotta's 0.2% base rate might change that behaviour though!

View on HN

Having the backing of the government like with Premium Bonds is huge. Both for marketing and for trust.

Building trust is definitely a challenge for us as a new company. Funds with Yotta are FDIC insured up to $250,000, which helps, and we communicate that to users, but people still need to trust us fundamentally.

We looked into Premium Bonds and also found that a lot of Premium Bond ownership comes from older generations. We are hoping that our UI and mobile first approach make the concept more appealing to a younger demographic in the U.S.

As a Brit not attuned to American retail banking I didn't notice the FDIC insurance element (aside: in the UK that's called FSCS Protection). Actually that's pretty huge for trust, great job :)

Yup - but people still need to trust that we actually are FDIC insured. We've had some people contact our partner bank directly to verify they are working with us, for example. But hopefully as we get some PR and more word of mouth, we won't have that issue as much.

Perhaps you could link directly to evidence of your FDIC insurance policy?

Yeah maybe there is something like that we can do. Hadn't thought of providing some sort of hard evidence. I will look into this now though!

I like the concept, but what you are offering isn't really comparable to Premium Bonds in the UK. The prizes in Premium Bonds are guaranteed every month. It's a raffle where every £1 deposited gives you a unique Bond ID. This is totally different from a lottery where the prizes are not guaranteed to be awarded for every draw.

Reply on news.ycombinator.com