Why we're building it
It's time to stop accepting crap interest rates.
We were all told as kids that we should put our savings somewhere safe. Somewhere they could grow. Not to leave them under the mattress to lose value as inflation kicks in. It was pretty simple: put the money in the bank and watch it grow.
But then everything changed. The 2008 financial crisis led to historically low interest rates. Suddenly, those living within their means watched their savings get slowly but steadily wiped out by inflation.
Today, the only way to get a decent interest rate is to sign up for introductory offers - pretty useless as they run out after a year and are only for small balances - or lock funds away for a long time. Even then, the best rates are still only around 2%.
We’re sick of low interest rates. We’re sick of savings getting eroded by inflation. We’re sick of savers getting a raw deal.
And we've decided to do something about it. We've decided to re-think how savings work. We've decided it’s time to fix saving.
How do we pay 3% interest?
Our mission is to fix saving. First step: interest rates. Banks collect savings and put it to work to earn a return. They make money by earning more on the loans they provide than they pay to the people whose savings they hold.
But there is another type of financial institution called a prime broker that most people don’t know about. Prime brokers are similar to banks in that they earn money by providing loans, amongst other things. However, they typically operate in a higher return end of the market, and usually work with high net worth individuals and hedge funds.
We have partnered with a prime broker to provide this 3% fixed return. They are able to earn higher returns on the funds they hold, and we pass those on to our users. They also pay us a fee, which allows us to make money to cover our costs and reinvest in the product.
By taking a revolutionary approach, Yomo is bringing the financial products of the wealthy to the everyday saver for the first time ever.
How we keep your money safe
We are working to make sure all deposits are covered by the Gibraltar equivalent of FSCS (the GICS). We expect to have that confirmed and in place shortly, and will update all our wait list users ahead of launch.
Our prime broker partner is fully authorised and regulated, and they hold 100% of user balances in cash and other liquid assets. This means that whenever you want to withdraw your funds, they are always there waiting for you.