Today I withdrew all but $25 (1 Ticket) of my Yotta Account. I have had my account since October 1, 2020 as I really believed in the idea of the Prize Savings Account. And of course, Fed Fund Rate and thus savings account rates were close to 0%.
At its peak my account was over 15K, after starting at 10K. Of course Yotta have change the rules a lot over time and the way the prizes and "lottery" / "system" works. I went back to ~10K around May 2021, when they devalued the tickets earned for balances above 10K.
Then after changing the system again (multiple times), and reading other's experiences and opinions of performance probability, I went down to a little over $200 (9 Tickets) about a year ago in August 2022. The fact that high yield savings account (+ sign up bonuses) were rising fast as well at this time, made the decision even more straightforward.
So now that I am basically near the end of the journey (keeping the small balance almost like my version of a mini lottery ticket where I don't lose the principal), I thought I would do a simple analysis of performance as per chart below.
I know there are flaws in the 100% accuracy of my methodology but at least it gives some sort of idea of performance vs. Fed Fund Rate (which is really the best comparison for this type of asset). I used a 60 Day moving average of performance rate to smooth volatility. (this is obviously an arbitrary range but I think illustrates the trend well).
CHART ATTACHED
- From my account commencement in October 2020 thru about October 2022 (when Fed Fund Rate reached ~3%), Yotta was paying off for me in out performing the "risk-free rate". I seemed to average around ~2%, while the Fed Fund Rate was largely ~0% up to March 2022, and didn't hit ~2% until August 2022.
- I, of course, had already reduced my account dramatically by August 2022 so had pre-empted the upcoming underperformance
- I would hypothesize my seeming out performance between August and October 2022 (vs. Fed Fund Rate, may have been a lagging effect of the higher balance (plus whatever the Yotta 'system' was at the time as I recall they were trialling something temporarily last Summer)
- For the last 10 months, (since October 2022) my account has dramatically underperformed the fed fund rate. And if those same funds were invested in Treasuries (assuming a state income tax state which I do reside in), it makes the underperformance even worse.
- Since about May 2023, when Fund Fund Rate has been ~5%, I have been earning ~1% with Yotta, which any way you look at it is awful
I would argue based on all this anyone should park their money in a Money Market Account, a High Yield Savings Account, or Short Term Treasuries vs. anything they were considering putting towards Yotta.
I hope Yotta find a way to make things work as a business and a business model. Because what they have now makes no sense for the customer based on my experience.
Comments, critiques, your experiences, and other opinions are of course welcome. Would love to hear how this compares in performance to your own journeys!
NB: Fed Fund Rate data is from St. Louis Federal Reserve Database
