Yotta Savings
Yotta Savings
New York City, USA, Aug. 10, 2020 (GLOBE NEWSWIRE) -- No one thinks saving accounts are exciting, right? Who wants to set money aside for the future, when there are so many things to spend our money on right now? In fact, according to a 2019 GOBankingRates survey, nearly half of all Americans have no savings at all. Unfortunately, without sufficient savings, millions of Americans are in a highly vulnerable financial position.
Luckily, Yotta Savings is working to change this. Entrepreneur and co-founder of Yotta Savings, Adam Moelis, says, "Yotta is using the idea of prize-linked savings to help everyday people save far more than they realized was possible.”
So how does the process work?
What Is Prize-Linked Savings?
Prize-linked savings is the concept of offering cash prizes or other incentives to people who deposit money into their savings account. Many people in the U.S. are unfamiliar with the idea of prize-linked savings. This isn’t surprising, since it hasn't been around for very long in America.
The American Savings Promotion Act is what makes this type of savings account possible. This act allows financial institutions to hold contests, in which the more money you've deposited into a savings account, the more likely you are to win cash prizes. This act was made law in 2014.
The Lottery System
Every year, Americans spend $80 billion on the lottery. The average household spends over $640 per year on lottery tickets. All this money goes toward lottery tickets, despite the fact that the chances of winning are very low.
The lottery has a terrible ROI. The reason people buy tickets, though, is because it's fun. According to co-founder, Ben Doyle "The lottery provides immediate hope and excitement. Yotta Savings does that, as well, while also helping people become more financially stable."
For every $25 you save with Yotta in their FDIC-insured account, you get a recurring ticket, which enters you into weekly drawings with prizes ranging from a few cents up to the $10 million jackpot. Unlike the actual lottery, when you lose, you still have a pile of money in your savings account. For anyone who plays the lottery, Yotta offers an alternative that feels similar but offers a much higher long term reward.
Using Human Psychology
Before Moelis began working on Yotta Savings, he had a major interest in behavioral psychology. He wanted to use his knowledge of human behavior to build something that helps people with their finances.
Moelis spoke about how human nature plays a role in his business. He said, "Human nature makes it difficult to adopt habits we know are healthy in the long-run but painful in the short run. Think about exercising. It’s the same thing. The idea behind prize-linked savings is to use psychology to make saving exciting in the short run so that people will get the long-run benefit."