APY GUY: Maximize Your Savings & Earnings

Yieldstreet Review – 11.27% Avg Annual Returns Since Inception


image credit: yieldstreet.com

Yieldstreet is an online investment platform that offers several alternative investments in marine projects, art, real estate, litigation deals, and commercial loans like merchant cash advances. Most of the assets available through Yieldstreet are open to accredited investors only. Their Prism Fund launched in August 2020, however, and nonaccredited investors can participate with a minimum investment of $500. 

While competing real estate investment and alternative investment sites allow investors to buy a portion of a block of commercial real estate properties, Yieldstreet crowdfunds debt that finances those (and other) deals. 

The company’s first offering rolled out in 2015 in litigation finance, pairing investors with plaintiffs who need a loan to cover lawsuit expenses before the settlement. 

While there’s always a risk of default, Yieldstreet investors can earn interest payments and eventually receive a principal return over the investments’ life. 

What is Yieldstreet?

Yieldstreet is an online platform that allows investors to participate in crowdfunding a variety of alternative investments backed by several asset classes, including real estate. Investing with Yieldstreet may provide passive income and allow diversification of portfolios to reduce correlation to the stock market. 

Qualified Yieldstreet investors can choose from short-term investments (fund options, equity deals, etc.) with a maximum term of three years. 

Yieldstreet employs experts in every asset class offered on the platform, and they vet the sponsors and originators who want to list on the platform as well as the deals offered to investors. Retail investors may not have the knowledge necessary to properly evaluate the deals offered on Yieldstreet, so it’s crucial that there are experts on staff there who can make sure that investors get access to high-quality deals. 

Yieldstreet favors investment opportunities with the following characteristics:

  • Low minimums
  • Short durations
  • Target 8%+ yield
  • Low stock market correlation

There are risks associated with investing in debt, even if assets secure it. A higher potential reward attracts investors willing to take a chance, but hopefully, investors realize that they may lose money with Yieldstreet. 

Yieldstreet backers include Citi (NYSE: C); the company plans to use Yieldstreet to invest $2 billion for wealthy clients. Billionaire philanthropist George Soros is also backing Yieldstreet. 

Yieldstreet Pros and Cons

Pros

  • Investors have access to alternative investment classes, including real estate, marine, legal, art, and commercial loans. 
  • Individuals can invest in privately structured credit deals. 
  • Investments are backed by assets, providing some degree of protection from the negative ramifications of default.

Cons

  • Investments are not liquid. 
  • The majority of investments available to Yieldstreet are reserved for accredited investors. 
  • Limited investment offerings. 

How Does Investing With Yieldstreet Work?

To invest with Yieldstreet, users look for a deal on the platform that interests them. They can search by asset type, loan term, and net yield parameters. Investments are a loan to the asset owner, with the asset serving as collateral for the loan. 

Most of the investments available on the Yieldstreet platform are for accredited investors only. Accredited investors must meet the following criteria:

  • Minimum net worth of $1 million, excluding the value of a primary home
  • Minimum annual income of $200,000 ($300,000 for couples filing jointly) with the expectation that current income will continue. 

Prism Fund Investment Requirements

The Yieldstreet Prism Fund is available to non-accredited investors as of late 2020. Retail investors can access multiple investment opportunities across several asset classes in a single fund.

Minimum investments for the Prism Fund are $500, which is much lower than Yieldstreet investments reserved for accredited investors. 

How Yieldstreet Sources Investments

Yieldstreet investors lend money through the platform and make a return on the yield borrowers pay. Yieldstreet charges fees to manage the loan, collect payments from borrowers, and distribute funds + interest to borrowers. If a borrower defaults on their loan, Yieldstreet works to recover the investors’ funds. 

Minimum Yieldstreet Investment

Certain investments on the Yieldstreet platform require an initial investment as low as $10,000. These investments are likely Borrower Payment Dependent Notes. Special Purpose Vehicles (SPVs) structured as LLC subsidiaries of the platform are owned by investors, and minimums may be higher for SPVs. 

Short-term note options have a $1,000 minimum investment requirement.

How Investors Keep Tabs on Their Account

Investors can check their portfolios on the Yieldstreet platform to understand how their specific investments perform over time, the amount of money earned so far, and progress toward the fund’s goals. Yieldstreet sends every investor monthly and quarterly statements and updates any time there’s new activity with their investments. 

What You Should Know About Yieldstreet Before Investing

Investment minimums: Yieldstreet states on their website that the typical minimum investment is $10,000. However, deals in the past have offered minimums of $5,000, and some reach a $60,000 minimum requirement. 

Type of investments: Yieldstreet investments are debt-related, and investors lend money to the platform to fund high-risk loans in various sectors. Fortunately, the loans are secured by property, which reduces the financial risk if a borrower defaults. 

Yieldstreet platform: Investments featured on the website include details like the minimum and maximum investment accepted, expected annual return, duration of the investment, the total offering size, and information about why Yieldstreet recommends the investment, any associated risks, expenses, and projected repayment schedule. 

Asset-based investing: Yieldstreet investments are backed by underlying assets, which helps protect investors from losing the money they invest on the platform. 

Fees: Annual management fees range from an average of 1% to 2.5%. There may also be an originator listing fee. Certain investments have an annual fee of $100 to $150 during the first year and $30 to $70 in subsequent years. Expenses come out of initial interest payments. 

Self-directed IRA option: Investors can choose to participate in Yieldstreet’s opportunities through a self-directed IRA. The custodian broker is IRA Services. 

Liquidity: Yieldstreent investments can’t be cashed out at any time during the target duration. 

Investments have limited availability: Investments are open for a set period of time and are first-come-first-served. 

Are Yieldstreet Investments Any Good?

Net IRR = overall rate of return to investors.

Yieldstreet has a 7% to 12% target rate of return.

To put this into perspective, private investment vehicles had an internal rate of return (IRR) of 11% across all investments between 2015 and 2021 after the deduction of expenses and management fees. 

Investors have entrusted Yieldstreet with nearly $2 billion since the company’s inception. As of early 2021, the company has returned nearly $750 million of capital to investors, $140 million of which is interest. In 2020, Yieldstreet appeared on the 2020 Inc. 5000 and was ranked number 46 on the list, a collection of the fastest-growing privately held companies in the United States. 

As of July 2021, more than 300,000 people have joined the platform, surpassing the company’s goals. During the first six months of 2021, investors requested participation in a total amount that exceeds the sum of 2019 and 2020 investment requests. Investors request an average of four investments each on the platform. 

Yieldstreet has experienced some challenges, and it’s willing to go after borrowers if they default on loans. The company recently won a $77 million judgment. A vessel deconstruction project didn’t go as planned, and the borrower defrauded numerous investors, including Yieldstreet. The lawsuit allowed the company to seize assets in an attempt to return investors’ money as promised. 

Assuming economic conditions remain strong, investors with Yieldstreet could reasonably expect the company to continue to make profitable loans yielding the promised rate of return. If borrowers default, the company is expected to continue to make every effort to recoup their investors’ money. 

Several deals on Yieldstreet are short-term, with projected high-interest yields. Each deal on Yieldstreet has unique risks, however. Lower-than-average minimum investment amounts for nonaccredited investors may attract those who have less than $1 million in the bank but want to get involved in non-traditional deals. Building a diversified collection of loans could help reduce the overall risk of default resulting in permanent losses. 

A Note About Yieldstreet Liquidity

Yieldstreet investments are illiquid, and each individual investment opportunity has a term of 180-days to four years. Like other crowdfunded investments, it’s not possible to pull money out of the investment before its end date. 

The Prism Fund has a duration of 48 months. During this time, investors can’t liquidate their assets and receive a return of capital. It may take up to one year after the fund’s end date for investors to receive their capital plus interest. Certain investments offer limited liquidity every quarter, however. 

Yieldstreet vs. REITs

Investors interested in the real estate market can buy shares in real estate investment trusts (REITs) or invest directly through a platform like Yieldstreet. REITs allow investors to buy and sell stock quickly, just like investing in any other stock. Even so, like the investments on the Yieldstreet platform, much of the REIT market is reserved for institutional investors. 

Yieldstreet investments are illiquid; investors must wait until the target date attached to the specific investment to gain access to their money plus any interest it earned. Target dates aren’t guaranteed, however, and investors may end up waiting longer than they planned to access their investment funds. REITs provide instant liquidity, restricted only by the stock market’s operating hours. 

REIT values fluctuate according to the stock market, while alternative investments like Yieldstreet offerings are largely unrelated to stock market activity.

Yieldstreet vs. Competitors

Here are some of the other big players in the online alternative investment world and their annual returns to investors since inception.

Keep in mind, these online platforms primarily provide passive real estate investment products.

FundriseCrowdStreetDiversyFundYieldstreet
201412.25%NRNRNR
201512.42%NRNR11.27% avg
20168.75%NRNR11.27% avg
201711.44%NR18%11.27% avg
20189.11%NR17.3%11.27% avg
20199.47%NRNR11.27% avg
20207.42%17.7%NR11.27% avg
NR = Not Reported

Not all real estate investment platforms are alike, so be sure to research them each individually before making a decision.

Yieldstreet Fees

Yieldstreet doesn’t impose trading fees, commissions, or inactivity fees, which may be attractive to investors who want to diversify but don’t want to get hit with a ton of fees. The annual management fee ranges from 1% to 2% of assets. Prism Fund investors pay an annual administrative fee of 0.50%. 

Flat annual fund fees vary according to the investment and are deducted from initial contributions. Expect a $100 yearly fee for Special Purpose Vehicles during the first year and $70 for subsequent years. Borrower Payment Dependent Note investors pay $150 during the first year and $30 for the following years. 

Short-term notes don’t have fees. 

Each investment’s fees are detailed on the deal page. Yieldstreet may impose a listing fee or deal origination fee, as well. For example, the Prism Fund has a 1% annual management fee with a maximum annual administrative fee of 0.5%. The Aviation Fund has a 0% to 0.25% management fee and a 0% to 2.5% incentive fee. 

Because the fees vary for each investment, it’s crucial to evaluate each option and understand the fees before proceeding with an investment. 

Is Yieldstreet Worth it For New Investors?

Maybe. New investors who have a solid portfolio and want to diversify should fully understand how Yieldstreet works before committing to an investment. They should understand that they may not get their investment back for several years, and there’s a risk of losing their money. 

Understanding Crowdfunded Debt

Yieldstreet has several resources designed to help new investors understand how crowdfunded debt could produce returns. This information is available to potential investors even before they create an account. After opening an account, detailed information about each asset class and individual investments is readily available, as well. 

Yieldstreet Customer Reviews

Yieldstreet doesn’t fare so well in customer reviews. There are only a few reviews on Trustpilot, and they are generally negative. Many customers who wrote reviews on various platforms seem disappointed with their inability to get their money out of the investment before the target end date. They didn’t seem to understand the terms of the investment with Yieldstreet. 

Yieldstreet on the BBB Website

Yieldstreet has an F rating on the Better Business Bureau (BBB) website, with 20 user reviews. Yieldstreet reviewers gave the investment firm an average of 2.05 stars out of five stars. Many negative reviews point out that an advertised $200 bonus was difficult or impossible to receive from Yieldstreet. 

Here are two reviews that may help you decide whether to invest with Yieldstreet:

July 21, 2021

“As a retired hedge fund manager who invested in equities and distressed debt, I had high expectations for what YieldStreet should be, and I have been very impressed. The investments have worked, and my returns have been exactly what I expected. They provided help along the way, from detailed deal memos and access to YS analysts, to simplified tax reporting and, most importantly, an easy and friendly mobile app. I have been very happy. My only gripes would be that the timing and attractiveness of the new offerings have been choppy, and I prefer single-name investments over blind pools, but a lot of the recent offerings have been funds…”

-Kevin L. 

July 12, 2021

“I’ve been an investor with Yieldstreet for 3-4 years now. They are, in my view, a responsible investment firm offering very favorable, secured returns for Accredited Investors.. Yieldstreet offers the opportunity to invest in secured bridge loans as well as an increasing number of other related investment funds and vehicles normally available only to institutions and very high net worth individuals, earning 7-11% interest or higher. At the moment, I’ve put more than 50% of my investments into it, a reflection of the poor returns of conventional fixed investments, and an overpriced equity market. However, this is definitely not for everyone, which is my main reason for not rating 5 stars..”

-Keith

Yieldstreet on Reddit

Reddit users are not fans (in general) of Yieldstreet. They are suspicious of the investment quality offered by the platform and seem to prefer other investment options. 

“I have experience with YieldStreet and FundRise, and my advice is to steer clear of any startup promising high returns and low risk. Go with a mutual fund or stable dividend stocks (4%+ yield) like Verizon. The reality of platforms like YieldStreet is that you’re getting the bottom of the barrel – I’ve already had two YieldStreet investments go into default because they deal with shady companies that can’t get funding elsewhere.”

-Absolutboss

The whole appearance of every loan is ‘we worked hard to get Yieldstreet members a chance to participate in this high quality, private investment opportunity!’ The truth is actually ‘no one else would loan them money because it’s so risky so they came to us'”

-dinedal

Yieldstreet Customer Service

Investors requiring assistance can contact Yieldstreet customer service by emailing investments@yieldstreet.com or call the company at 844-943-5378. The site doesn’t have a live chat feature, but representatives aim to return emails within 24 hours. 

Is Yieldstreet Worth it? 

Yieldstreet provides individual investors with a means by which to invest in privately structured credit deals. The platform offers the unique opportunity to diversify into offerings typically reserved for institutional investors. 

Not all loans through Yieldstreet have performed well for investors. Overall, the platform has a solid track record of generating passive income backed by alternative assets. 

Investors who understand alternative asset classes, have discretionary income to spend on the investment, and are comfortable with illiquid investments, may find that Yieldstreet provides access to the type of diversification they want.

Top 11 Crypto Savings Accounts for October 2021


Earn between 3.20% and 12% APY on your crypto holdings.
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Bitcoin once again hit all time highs this month – starting October around $48k and topping $64k on the 19th. The rally was sparked in the beginning of the month when FED Chairman Powell stated he has ‘no intention’ of banning cryptocurrency.

So if you own some cryptocurrency yourself, then you may be interested in a crypto savings account to give these holdings an added boost in earning power.

These types of “savings accounts” or “interest accounts” are relatively new, as with crypto itself, but the rate of return is eye-catching and certainly puts the top yields issued by FDIC-insured banks to shame.

That said, while these products can be exciting, they do come with underlying risks that typical savings accounts offered by banks or credit unions do not. So, if you’re considering investing in cryptocurrency just for the high yield, then you may want to conduct further research to see if these digital currencies are right for you. But if you already own crypto and want to get a fabulous interest rate on these holdings, continue reading our comprehensive guide below.

BlockFi – Best Overall

image credit: blockfi.com

October 2021 Bonus: Get up to a $250 in crypto with a deposit of $100 or more into a BlockFi interest account!

Learn more here.

Plus, earn up to 8.25% APY (annual percentage yield) on stablecoins and 4.5% APY on bitcoin with BlockFi!

BlockFi is a crypto custodian that was founded in 2017 and just landed $350 million in funding (March 2021) which pegged the company at a $3 billion valuation.

This platform has exploded in growth since their inception and currently offers retail and institutional-facing products.

On the retail side of its platform, people can use its mobile app to earn a yield on their crypto holdings (4.5% on Bitcoin, 8.25% on stablecoins). You can currently earn impressive yields on the following:

  • BTC,
  • ETH,
  • LTC,
  • PAXG
  • USDC,
  • USDT,
  • GUSD,
  • PAX

The BlockFi interest account features rates up to 8.25% on stablecoins and 4.5% on bitcoin. Sign up here and get the $250 bonus too!

The lowest APY BlockFi offers is just 0.50% for deposits of 20 BTC or more. The more Bitcoin you deposit, the less interest you earn with BlockFi. Other cryptocurrencies feature flat rates from 5.0% to 8.60% APY.

BlockFi Complete APY Chart (APY = annual percentage yield).

CrytpoAmountAPY
BTC (Tier 1)0 – 0.54.5%
BTC (Tier 2)0.5 – 20 BTC1%
BTC (Tier 3)20 BTC +0.10%
LINK0 +3.5%
ETH (Tier 1)0 – 15 ETH5%
ETH (Tier 2)15 – 1000 ETH1.5%
ETH (Tier 3)1,000 ETH or more0.25%
LTC0 +4.75%
USDC0 +8.25%
GUSD0 +8.25%
PAX0 +8.25%
PAXG0 +3.25%
USDT0 +8.25%
BUSD0 +8.25%

You can learn more about how BlockFi’s interest works on their website, but in a nutshell they generate interest by lending your assets to trusted institutional and corporate borrowers for a certain period of time. They only lend the crypto on over-collateralized terms with an automated risk management system that monitors positions 24/7.

Get a $250 Bonus when you deposit just $100 or more in crypto with BlockFi! Limited time offer.

Coinbase – Best for Newbies Holding USD Coins

image credit: coinbase.com

[October 2021 Update: Coinbase dropped their interest rate products.]

Earn up to 4% on USD coins.

Coinbase is one of the most well recognized brand names for holding and trading cryptocurrency.

The coinbase digital wallet lets users earn up to 0.15% on their idle USD coins while you wait to make new trades. You also have less restrictions when it comes to withdrawing funds in your Coinbase digital wallet as Coinbase doesn’t loan your USD coins out to borrowers.

Celsius Network – Best for High Yield + Sign Up Bonuses

image credit: Celsius.network

The Celsius Network offers noteworthy yields and even sign up bonuses, however, the very best rates can not be attained by U.S. residents.

Celsius has a loyalty rewards program that pays rewards in tiers with its own native currency (the CEL token). Those in the rewards program have access to Celsius’s highest rate of 17.78% however, the rewards program is not currently offered to U.S. residents. We will update this post when/if that changes.

APYs for U.S. residents range from 0.50% to 17.78% APY.

There are no minimum deposit requirements and interest payments are made weekly.

There’s currently a number of sign up bonus for new customers that transfer their crypto over to the Celsius network!

Here’s some of the promotions going on in October to give you an idea (see full list here):

  • Transfer $400 or more of PAXG to your Celsius account and receive $60 in PAXG
  • Transfer $25,000 or more of PAXG to your Celsius account and receive $600 in PAXG
  • Transfer $400 or more in UNI to your Celsius account and receive $60 bonus in UNI
  • Transfer $400 or more in BNB to your Celsius account and receive $40 bonus in BNB
  • Transfer $100 or more of any supported asset(s) to your Celsius account and receive $10 in BTC
  • Transfer $400 or more of any supported asset(s) to your Celsius account and receive $50 in BTC
  • Transfer $400 or more in ADA to your Celsius account and receive $40 in ADA
  • Transfer $20k or more in ADA to your Celsius account and receive $500 in ADA

Linus – Best for Liquidity

image credit: getlinus.io

Earn up to 4.5% APY + withdraw funds at any time with Linus.

If you’re looking for a solid rate plus easy access to your funds and limited withdrawal restrictions then Linus might be your best bet.

Many crypto savings accounts come with fees or restrictions when you attempt to withdraw funds prior to a specific date. This is not the case with Linus. Linus differentiates itself by allowing their customers to withdraw funds at any time, penalty free. If you need help, humans are available via online chat.

Linus provides an interest rate of 4.5% APY on your crypto stash. Linus generates interest by lending your assets to borrowers via smart contracts.

Crypto.com – Best for Cryptocurrency Diversity

image credit: crypto.com

Earn between 3% and 14% APY with Crypto.com.

If you hold some cryptocurrencies that aren’t the major household names and would like to earn interest on your holdings, then Crypto.com might be a good place to look. They currently offer great interest rates on the widest range of cryptocurrencies which currently feature 26 cryptocurrencies and 8 stablecoins.

Here are some of their rates for cornerstone crypto currencies this month:

  • Bitcoin – up to 8.5% APY
  • Ethereum – up to 8.5% APY
  • USDC – up to 14%

Simple daily interest is applied and deposited into your account weekly. Rates depend on the term of your deposit which can be flexible (you can withdraw anytime) up to 3 months long.

Nexo – Best for Rapid Payments

image credit: nexo.io

Earn up to 12% APY (paid daily) with Nexo.

Nexo’s claim to fame is limited lock-up times of just 24 hours or less. That means your interest payments are paid out daily.

Nexo has already racked up over 1 million users since its inception in 2017.

Nexo also has $375 million in insurance on all custodial assets.

There are no monthly fees or minimum deposit requirements to open an account.

Outlet Finance – Best for Dealing in US Dollars

image credit: outlet.finance

If you do not study cryptocurrency trends but still want to dabble in the space and earn a handsome return while you do it, then Outlet Finance may be your best option.

You don’t need to know much about Crypto with this platform as they deal with U.S. dollars. Users deposit funds in USD and users earn interest in USD.

How it works: Outlet Finance converts your investment to stablecoin and then connects it with their overcollateralized lending partners, matching it with the highest yield.

Overcollateralized means their partners must put up 120% of their loan request. In the event that they default, this gets liquidated to pay the investor (you) which helps mitigate your risk.

The company advertises APYs up to 6%.

YouHodler – Jack of All Trades

image credit: youhodler.com

YouHodler is a Swiss company that gets its name from the playful misspelling of the word “HOLD” which later utilized the acronym “Hold On for Dear Life” and was adopted by the investment community as a term to ‘hold’ or not sell your investment.

It makes sense then that YouHodler is designed to help long term crypto holders get additional earnings from their holdings.

YouHodler boasts yields between 3% and 12.3% depending on currency and investors can get started with as little as $100.

We awarded this platform with the Jack of All Trades title because it excels in most categories consumers care about: 1. Access to funds / liquidity. 2. High paying yields. 3. Diversity of coins accepted. Savings accounts and exceptional APYs are offered on 22 cryptocurrencies currently with YouHodler.

Interest payments are paid every week.

Gemini – Best for Security

image credit: gemini.com

Gemini claims to be operating with a security-first mentality since day 1.

Once you deposit your crypto with Gemini the majority of it is held in their “offline, air-gapped cold storage system” which helps prevent theft by hackers and/or malware. Only a small portion of your deposited crypto will be held in their online “hot wallet” and it is insured. You can get a full rundown of their security measures here.

APYs range from 1.54% to 8.05% depending on currency.

Interest is paid daily.

CoinLoan – Security and Safety Runner-Up

image credit: coinloan.io

CoinLoan is an Estonian firm that specializes in security and safety like Gemini.

They also do a great job in supporting a wide range of cryptocurrencies, which currently sits at 17.

Their APYs range from 5% to 12.3% depending on cryptocurrency.

There are no minimum deposit requirements and interest is paid monthly.

Hodlnaut – Runner-up for Liquidity

image credit: hodlnaut

Hodlnaut is another play on words with the term HODL, which is a common misspelling for HOLD plus the word Astronaut, to get Hodlnaut.

They are based out of Singapore and only accept deposits in 5 cryptocurrencies currently. These are BTC, DAI, ETH, USDC and USDT.

Hodlnaut does not currently hold any regulatory licenses in Singapore but is applying for them under the new regime. Visit their FAQ section to read more.

Interest is paid out weekly, every Monday.

APYs range from 6.2% to 12.73% depending on cryptocurrency.

What are Crypto-Based Savings Accounts

Before you open a crypto-based savings account it is probably a good idea to fully understand what these products are and how they differ from traditional savings accounts.

First, these accounts provide a yield on your crypto holdings, not U.S. dollars. There are several crypto banks offering fantastic APYs (annual percentage yields) on the USDC coin which is pinned to the U.S. dollar and generally trades in parallel, but it is not the actual USD.

In fact, these accounts should be viewed as investments rather than savings accounts, because that is really what they are at their core.

You invest in crypto currency and then lend out your keys to a third party in exchange for interest.

The precise activities going on under the hood with your crypto keys vary depending on which platform and account you choose.

We’ll touch on the mechanics and risks to these investments further on, but first, aside from the high interest rate, let’s look at some of the positive impacts crypto savings accounts are having to the overall cryptocurrency economy.

For starters, it’s an automated way to grow crypto portfolios over time. For example, if you are already fully invested in bitcoin, you can deposit that bitcoin into a crypto savings account and earn additional interest paid in bitcoin.

Also, crypto savings accounts continue to be an on-ramp for getting people to deposit their USD, CAD, AUD, and GBPs and convert them into a crypto savings account. By drawing in more participants to the crypto economy, greater liquidity can be attained leading to eventual price stability for the new asset.

Also, long time holders of crypto are incentivized to move their crypto out of storage and into the markets facilitating adoption and helping innovate new use cases for crypto.

In the end, interest rates are important in financial markets because they fill the gap between people with surplus assets they can’t use and the people who need the assets because they have a productive use. High interest rates being offered can be seen as demand for the underlying crypto assets.

How Much Can You Earn with Crypto-Based Savings Accounts

There are two main factors that are going to affect your overall earnings (or losses) from a crypto-based savings account:

  1. The cryptocurrency’s price in U.S. dollars.
  2. Interest rate paid on your crypto savings account(s).

The first main factor is likely going to be the biggest variable in determining your overall gains or losses. This becomes a bigger risk if you hold your savings account for a long period of time. 

Cryptocurrencies are highly volatile, un-regulated, risky investments that are not backed by the government like standard currencies are. Therefore, if the cryptocurrency you are holding in your savings account goes down in value while your crypto savings account is active, it is quite possible to lose a portion of your principal.

This is a similar concept we discussed with the inherent risks of foreign currency CDs, where a great interest rate can be negated entirely if the currency you are holding goes down in value against the U.S. dollar.

The second variable is APY paid on your crypto savings. This varies widely on a number of factors.

Currently some of the top crypto banks outlined in this article are paying between 3.2% and 12% APY. To put this in perspective, the average savings account yield sits at just 0.05% APY according to recent FDIC data.

Who are these providers I’m lending my keys out to?

Exchanges and lenders are the businesses who take your keys and lend your crypto assets to others. These institutions will loan out the crypto assets to other borrowers who may be individuals or institutions who need liquidity and don’t want to sell their cryptocurrency. Most traditional banks are unwilling to take crypto assets as collateral for a loan which has opened the door for these exchanges and crypto lenders.

Currently, interest rates are relatively high as users can earn up to 12% in some cases. Additionally, by offering the high yield it helps attract and on-board more people into the crypto economy. This is because in order to earn the high rate of interest, you need to convert your fiat currency over into bitcoin or another cryptocurrency to get started.   

That high rate of return has likely succeeded in attracting more people into the crypto economy. According to Statistia, 20 million bitcoin wallets were created from February 2020 to January 2021. This represents a 43% increase from the number of wallets a year ago.

Why would a business want to borrow at 8-12% annual interest?

It is great that savers like us get to benefit from earning a high interest rate. Who would be willing to pay 8-12% annual to borrow the cryptocurrencies?

Institutions are a large driver of crypto borrowing. If they have a mismatch on the timing of their debits and credits, they can park collateral with the lender, then pull out a short-term crypto loan to fund the mismatch.  

Market makers and crypto dealers are a great example of this. If you make a large buy order of bitcoin, the market maker or dealer probably does not have bitcoin as it is highly unlikely somebody else is selling to them that exact amount at that same time. These market makers want to be neutral and not be exposed to a directional risk in bitcoin.  

Therefore, they will take on a short-term loan of bitcoin until sell orders come in. At that point, they will repay the loan back with their new sell orders from their clients.

As another example, one of the benefits of cryptocurrency investment is the decentralized marketplace. There are many different places you can go to buy, sell, and exchange your crypto.  

As a result, the pricing of bitcoin (and other cryptocurrencies) may not be EXACTLY the same and might vary by 1% or so at each of these venues. Arbitrage traders will look to profit from the difference in pricing from the various locations.  

However, those arbitrage traders might not have the right cryptocurrency located at the venue where the mismatch occurs. Therefore, these traders would take on a short-term loan in their needed cryptocurrency to take advantage of those pricing dislocations.

The amount of interest the arbitrage traders pay in a year might be earned through their business in a few short weeks. Even though 8-12% of interest payable per year sounds like a lot, some business models are happy to pay for it which is to the saver’s benefit!

Lastly, some investors who feel the price appreciation of bitcoin or ethereum will be multiples greater than the 8-10% of interest they pay. As a result, they will consider depositing their crypto as collateral, then taking a US dollar loan out. They will then turn around and buy more crypto with the US dollars lent to them. As you can imagine, that is a risky move as you would be betting on the crypto you are purchasing will be more valuable later when you repay the loan. That is not always going to be the case.

Risks Associated with Crypto Savings Accounts

Though a crypto-based savings account has its benefits, there are risks of loss to investing in it. Let’s explore seven risks associated with these investments.

Exchange Rate Risk

Risk that the value of the underlying crypto goes down relative to your base currency (USD, GBP, etc). The value of a cryptocurrency is not backed by the government and is not legal tender. Additionally, the accounts to where the crypto is placed to earn interest are not subject to FDIC, SIPC, or other guarantees. If something happens to that cryptocurrency that would cause it to lose its underlying value, then you would lose your principal invested amount.

There are several different types of cryptocurrencies to earn interest on. The value of cryptocurrencies like bitcoin and ethereum are volatile and can easily lose their value quickly. Many crypto savings accounts pay their interest in crypto so not only is your underlying principal losing value, but the interest you are earning has less real value too. Of course, the opposite of that is true when you have an appreciating underlying asset.

As a result of volatile valuations, savors like to use stablecoins in their crypto savings accounts.

Risk of the Stablecoin Peg Breaking

Stablecoins are designed to hold a stable relative value to another asset, like the US dollar. If the stablecoin cannot hold its value relative to the assigned asset, then investors would lose trust in the stablecoin causing its value to potentially collapse.

It is important to note that not all stablecoins were created equal. Some stablecoins are centrally managed and promise to have US dollars locked away, in a vault with regular audits completed. 

Other stablecoins are decentralized and are managed by computers and computer code rather than humans. It could be argued that each of these types of stablecoins bears their own unique risks.  

In the former, the central institution could break their promise and mismanage the business causing the peg to the US dollar to break. In the case of the latter, an error in the coding could be discovered in the future that causes a break of the peg against the US dollar.  

In case there is a break in the peg, investment may flee that stablecoin potentially causing loss of principal.

Lock Up Risk

Some crypto savings accounts are very flexible where you can withdraw at any time. Other crypto interest accounts may have lock up periods or additional fees for excessive withdrawal activity. Generally speaking, the more restrictive accounts will offer the higher interest rate while the more flexible accounts tend to offer the lower interest rates. Make sure to ask questions about a lock up period, withdrawal restrictions, and any additional fees before committing.

Pledge Risk

You no longer control the crypto and are pledging it as collateral. For example, when you deposit at a bank you are staking a claim to a bank’s liability. It is a similar situation with the crypto savings account (minus the government protections). If the crypto provider goes under due to a mismanagement of their business or an adverse market event, you will not be able to get your bitcoin or cryptocurrency back. This is because when you deposit the crypto into the savings account, you no longer own the crypto.

Loan Default Risk

If the value of the collateral backing the loan falls and is insufficient to pay back the lender, the load could be defaulted upon. Though this is a real risk, most crypto loans tend to be overcollateralized which greatly reduces the risk.  

In other words, it is common for borrowers to maintain collateral equal to 150% of the loan amount. Therefore, if the value of the collateral decreases due to adverse market conditions, there is typically enough cushion to support the loan. It gives the borrower time to repay the loan or for the loaner to liquidate the position on the open market. The loan default risk could come into play if a rally harsh market correction drove the value of cryptocurrencies very low very fast. In essence, markets would have to crash 50% in a matter of minutes what hasn’t happened…yet.

Risk of Custodian Hack

A large risk factor is if the lending company’s custody provider (where the assets are stored) gets hacked. If you are utilizing an exchange’s crypto savings account, it is possible that a theft could occur due to a hack at their custodian.  

Many people who are new to cryptocurrency are afraid of the blockchain getting hacked. However, the risk of a hack is not actually to the blockchain, but rather the institution’s security (or smart contract, see below) which is different from the blockchain.

It is important to understand that the ‘hack’ risk is increased when you are dealing with a newer institution or an institution whose investment in security is not as strong as others.

Typically, institutions that have been around longer tend to be stronger as they have stood the test of time.

Smart Contract Risk

Decentralized finance (Defi) lenders use automated coding called smart contracts to loan and allocate capital. This coding is viewable by everyone so it is quite transparent. Everyone is incentivized to make sure the coding is solid.  

However, a previously undiscovered error in a smart contract may open the door for a hacker to find their way in. For example, a loophole in the code may cause the lender to lose the funds.

This has some similarities to the custodian hack risk as newer untested lenders may not have had their smart contracts battle tested. Though not exempt from the risk, lenders who have been around longer and whose products have stood the test of time are generally less likely to be exposed.

Crypto Savings VS Traditional Savings

Despite having the name ‘savings account’ in their title, crypto-based savings accounts have some very distinct differences from traditional savings accounts.  

Above, we have touched on some unique qualities and risks to crypto-based savings. Below, we’ve outlined a side-by-side comparison.


 Traditional Savings Crypto Savings
FDIC Insurance Yes No
Withdrawal Allowance Generally unlimited Can be Limited
Interest Calculation Usually Compound Usually Simple
Interest Deposited Best APY Monthly ~0.3% Daily or Weekly ~12.0%

FDIC Insurance

Variable rate deposit accounts including savings accounts, checking accounts and money market accounts opened with traditional banks or credit unions come with FDIC insurance (or NCUA insurance for credit unions) that protect your funds in the case of institutional insolvency while your money is held there.

FDIC and NCUA insurance cover deposits up to $250,000 per individual or $500,000 on joint accounts.

This is not the case with crypto-based savings accounts where it is possible to lose money – both interest and principal. Crypto investments are not covered by government insurance and are not considered legal tender.

However, many crypto institutions will provide insurance for certain risks of loss. Unfortunately, the biggest risk to loss is the exchange rate risk, which is uninsured. The exchange rate risk is why many crypto-based savers utilize stablecoins as they pin the value of the cryptocurrency to a standard fiat based currency (for example – USD, CAD, AUD, GBP).

Withdraw Limits

Per federal regulation D, variable rate deposit accounts at banks and credit unions no longer have limits to the number of transfers as of April 2020. The previous limit of 6 transfers was lifted in April 2020 as Covid-19 caused millions of Americans to lose their jobs, struggle to pay bills and needed to draw upon their savings in a time of crisis. Double check with your institution so you know what their limitations are so as to avoid excess transaction fees.

Crypto savings accounts, on the other hand, can have tighter restrictions on withdrawing funds. Some crypto-based deposits are contractual and you have to keep your deposit on hand for a certain time period limiting your ability to withdraw. Other crypto-based deposits may be flexible, but offer a lower rate of return for that flexibility. Lastly, some institutions charge set up fees too.  

As crypto-based savings accounts are a relatively new product, regulation surrounding them hasn’t been established so check with the institution regarding their limitations and fees before making your deposit.

Interest Calculations and Interest Deposits

Another major difference in these accounts is how interest is calculated and when your interest gets deposited. 

Most banks and credit unions compound interest daily, weekly or monthly on your deposits. Compounding interest allows for the interest you’ve accrued to also earn interest. 

With crypto-based savings accounts however, simple interest is generally applied. That means your initial principal is the amount to which interest calculations are made.  

One interesting advantage to crypto-based savings accounts is that many institutions actually deposit your interest in shorter time increments like daily or weekly rather than one interest deposit per month seen by banks and credit unions. This quicker release of the interest allows you to put it to use more quickly.

Final Thoughts

If you already hold cryptocurrencies, then moving your funds into an interest bearing account is a great strategy to earn while you hold.

That said, if you’re considering investing in cryptocurrency because of the enticing APYs you see on the savings side, be sure you fully understand the inherent risk of these highly volatile digital currencies.

You’ll also want to study each account and crypto bank carefully as terms and conditions, interest rates, minimum deposits, types of cryptocurrencies needed and lock-up periods vary widely from account to account.

If you’re typically a conservative saver that generally invests in traditional CDs, savings accounts, money market accounts and the like, then these accounts probably aren’t going to be for you. They are also not a wise place to stash emergency funds or any funds you may need to convert to cash quickly.

Also keep in mind these are variable rate accounts that are subject to change at any time without notice.

Motley Fool Review: Should you Pay for the Premium Service


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Motley Fool Review: A Warning About Stock Advice Subscriptions

Motley Fool’s menu of stock picking services operates on the buy-and-hold philosophy of stock market investing. If you want help becoming a successful day trader, move on. 

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The Motley Fool is prohibited from offering personalized investment advice, so they provide equal access to information for anyone who subscribes to one of their services. Their strategies appeal to different investment styles and interests, but they don’t offer a one-size-fits-all solution. 

Details About Motley Fool’s Premium Subscription Services

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Motley Fool Stock Advisor: Join for just $99 a year!

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Which Motley Fool Premium Subscription Offers the Best Value?

Motley Fool’s Stock Advisor is one of their most popular subscription services. It has a low introductory price of $99 for new users and an 18-year track record of beating the market. Stock prices can fluctuate wildly, so the Stock Advisor subscription comes with instructions to buy at least 25 stocks and hold on to them for a minimum of five years. 

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Stock Advisor’s Stock Picks

Two new high-growth stock picks come via email each month from Tom and David Gardner, so there is a constant flow of solid advice about which stocks to buy next. 

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All of the stocks recommended by the Gardner brothers are researched extensively. Each stock comes with a report explaining the rationale behind the recommendation. You’ll get a taste of how The Motley Fool chooses specific stocks by diving into Stock Advisor research. 

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The Stock Advisor’s education resources offer general investment lessons and information about research methodology for those interested in learning more about choosing winning investments. 

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Stock Advisor members can discuss investing and stock picks in the community forum. This is a great way to connect with like-minded investors, learn more about how others get the most from their Stock Advisor subscription and ask questions. The forum is active, so it’s easy to get timely feedback from other users.

Is Motley Fool Worth it For New Investors?

Maybe. Before you subscribe to Stock Advisor, check out The Motley Fool’s How to Invest Guide. You’ll get a feel for The Motley Fool’s philosophy about investing, including when it’s smart to buy stocks, how to establish an emergency fund to protect your financial stability, and how to allocate assets. 

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Motley Fool Customer Reviews

Before you spend your money on a stock advising service, it’s wise to read online reviews from verified customers. The Motley Fool marketing team makes excellent use of reviews from customers who are thrilled with the subscription services. It’s crucial to expand your research into areas of the internet beyond The Motley Fool website to get a balanced view of customer sentiment. 

The Motley Fool Suffers on Trustpilot

The Motley Fool has 1,242 reviews on Trustpilot:

  • Excellent: 33%
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Many of the negative reviews point to information found in Motley Fool’s free content, generated by in-house analysts and contracted experts. Motley Fool encourages investors to conduct their research before deciding whether an analyst’s advice works for their situation. 

The Motley Fool customer service team responds to each negative review to solve any ongoing problems. 

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Reddit users have a lot to say when asked,”Is Motley Fool worth it?” Many users posted responses to a question posed by a curious Motley Fool user who was on the fence about whether to pay for a premium subscription. 

Investors who purchased shares of FICO, Shopify, Wix, and Amazon before they were well-known successful companies offer glowing reviews of the paid-for subscription services. New subscribers point out that even if they make just a few hundred dollars following Motley Fool’s advice, it will be worth the Stock Advisor service subscription price. “…at least the Gardner brothers know what they are doing (they outperform the market consistently)” -lame_corprus

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The Motley Fool Inc. has 160 published customer reviews on the Better Business Bureau (BBB) website. The company has an average rating of 4.03 stars out of five. The BBB closed 123 customer complaints in the past three years and 66 in the past 12 months. Customers complain about various hardships, including a lack of response from Motley Fool’s customer service department. 

Many of the customer complaints on the BBB website have to do with trouble logging in, not receiving a free report via email as promised, or automatic renewals. Customers complain that Motley Fool emails them with special offers too much and that they can’t get a full refund after they’ve signed up for Motley Fool’s non-refundable offers. 

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Is Motley Fool Worth it? 

If you decide to try a Motley Fool subscription to level up your investing game, don’t get so excited that you skim over the Important Notes right above the green “Submit My Order” button. Make sure you understand the price of your subscription as well as how and when it renews. The rate you pay for year one could be significantly lower than the amount you pay in subsequent years. 

You must be willing to open a brokerage account (if you don’t already have one), purchase the stocks recommended by Motley Fool’s analysts, and leave those investments alone for at least five years. Before you decide to invest in a Motley Fool premium subscription, consider your budget, investing style, tolerance for risk, and willingness to follow the advice. The service should meet your needs without pushing you to make investments that are too far out of your comfort zone. 

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Bank of America CD Rates – Are they Worth Opening in 2021?


[Update October 2021: Unlike some of the other major US banks, Bank of America’s CD rates have not changed at all throughout the course of 2021. The APY remains a flat 0.05% for their “featured CDs” and 0.03% APY for “standard CDs.” This is true for all terms and deposit amounts. See below for more details.]

Bank of America hardly needs any introduction. They’re the second largest bank in the United States by assets, with over $2.61 trillion in total and they are the third largest bank in the country by branch locations with roughly 4,559 across all 50 states.

That said, their savings rates – both fixed and variable – leave much to be desired and lag the current national average(s) for their respective terms by considerable margins.

This isn’t unique to Bank of America though, as all the big banks at the moment offer abysmal rates to savers. Both Citibank and Chase Bank have kept their savings rates significantly under the national averages for all of 2020.

For those considering opening a fixed-rate, certificate of deposit with Bank of America continue reading our full review below.

Bank of America CD Rates + Account Details

Bank of America CDs are federally insured by the FDIC up to the applicable limits. These are $250,000 per depositor or $500,000 on joint accounts.

Bank of America has two sets of certificates of deposit available to consumers currently: “Featured CDs” and “Standard CDs.”

The Featured CDs come with a higher minimum deposit requirement of $10,000 compared to just $1,000 for the Standard CDs. Bank of America’s Featured CDs also offer five oddball terms to choose from. These are:

  • 7 months
  • 10 months
  • 13 months
  • 25 months
  • 37 months

Bank of America Featured CD Rates

TermAPY
7 months0.05%
10 months0.05%
13 months0.05%
25 months0.05%
37 months0.05%

To put these yields in perspective the current national average for a 12 month CD and a 60 month CD sits at 0.22% APY and 0.47% APY, respectively. There are also several nationally available credit unions with CD rates still above the 1.0% APY mark for longer terms.

Their Standard CDs have much more flexible terms ranging from 1 month to 10 years (120 months). Consumers may choose the exact number of months within that range. Current rates, however, are flat across the board for all terms.

Bank of America Standard CD Rates

TermAPY
1 month (28 days)0.03%
3 months0.03%
6 months0.03%
12 months0.03%
2 years0.03%
3 years0.03%
4 years0.03%
5 years0.03%
6 years0.03%
7 years0.03%
8 years0.03%
9 years0.03%
10 years0.03%

Interest is compounded and credited monthly on both featured and standard CDs.

In normal interest rate environments two variables may affect the overall APY (annual percentage yield) applied to your CD from Bank of America. These are:

  1. Your Location
  2. Your Deposit Amount

While these variables do not change your rate at the moment, Bank of America still requires you to select these before disclosing the yields they offer on their website.

Your location is determined by the zip code you reside in and the deposit amount is broken up into four ranges for the Featured CDs and three ranges for Standard CDs. For Featured CDs, the deposit ranges are:

  • Less than $10,000
  • $10,000 to $100,000
  • $100,000 – $1m
  • $1m +

For all of Bank of America’s Standard CDs the deposit ranges are:

  • Less than $10,000
  • $10,000 to $100,000
  • $100,000 +

Early Withdrawal Penalties

Bank of America’s early withdrawal penalties vary by length of the term of the deposit. Below is a breakdown of what you can expect to pay if you need to make an early withdrawal to your CD. You should note that for CDs with terms of 60 months (5 years) or greater, fees can potentially add up to more than the overall interest earned if withdrawals happen often enough.

CD TermPenalty
90 days or less7 days’ interest
90 days – 12 months90 days’ interest
12 months – 60 months180 day’s interest
60 months +365 days’ interest

The interest penalties above are applied to the amount withdrawn.

Grace Period

The grace period is the brief window of time after your CD matures and before it gets renewed in which you have the ability to add or withdraw funds penalty free.

Bank of America’s grace period is slightly lower than the standard 10 days at just 7 days.

Bank of America’s CDs also automatically renew, so if nothing is done within this 7 day period your CD will automatically renew with the same terms and whatever the current APY happens to be at that time.

Bank of America will send you reminders leading up to the grace period of your deposit but be sure to set up your own notifications as well.

Final Thoughts

While banking with large institutions such as Bank of America has its advantages such as easy in-person branch access, vast network of ATMs, and a wide range of financial products, their current CD rates are simply not competitive at this time.

In normal interest rate environments having both featured CDs with higher APYs and standard CDs with customizable term lengths is a major advantage, however Bank of America’s current yields make these standout features inconsequential today.

If you’re after a high yield CD, a nationally available credit union or online bank is going to be able to provide you with much better rates.

CIT Bank Savings Accounts & Money Market – APYs up to 0.50%


CIT Bank has three variable rate savings products with APYs ranging from 0.40% to 0.50% currently. These are:

  • CIT Bank Savings Builder
  • CIT Bank Savings Connect
  • CIT Bank Money Market

The Savings Connect just had its APY upped to 0.50% recently, while the Savings Builder and Money Market accounts earn 0.40% and 0.45%, respectively.

Each comes with their own minimum deposit requirements and account details which we’ll cover in detail below.

If you haven’t heard of CIT Bank before it might be because they’ve gone through several re-brands, mergers and acquisitions over their century-plus history since their founding in 1908.

Today they hold over $50 billion in assets and regularly offer some competitive rates on their deposit accounts.

To see if any of CIT bank’s savings products are right for you, continue reading our comprehensive review below.

CIT Bank is member FDIC and all funds held in any CIT bank account are federally insured up to the applicable limits.

CIT Bank Savings Builder APY + Account Details

The CIT Bank Savings Builder account requires a rather steep minimum deposit of $25,000 to earn the advertised APY. However, if you do not have $25k to open the account but can manage to add at least $100 to it monthly, CIT will still provide you with the 0.40% APY. If you don’t have $25k nor can you commit $100/mo to the account, you’ll earn just 0.28% APY on your balance. More details below.

Minimum Balance + ConditionsAPY
$100 – $25,0000.28%
$100 + $100/mo deposit0.40%
$25,000 +0.40%

To put these APYs in perspective, the current national average on a savings account sits at just 0.06% according to recent FDIC data.

Remember, if you have a balance of less than $25,000 AND you do not deposit or transfer $100 each month into the account you will earn just 0.28% on your balance. So if you wish to open the account but are under the $25,000 limit, you may want to hold some funds back or be sure you can commit to maintaining a $100 deposit each month to earn the higher APY.

You should also note that all new accounts will get an introductory APY of 0.40% during what CIT Bank refers to as the “Introductory Period.” When this period ends, all accounts will be evaluated on “Evaluation Day” to determine the APY paid for the next period.

The introductory period begins the day you open the account and ends on Evaluation Day. The Evaluation Day is the fourth business day prior to the end of the month. If you aren’t maintaining a monthly balance of $25,000 or more, you’ll want to make a deposit of at least $100 during this period if you want to keep the higher APY.

Regardless of your balance, interest is compounded daily and credited monthly to the account.

CIT Bank Savings Connect APY + Account details

The CIT Bank Savings Connect account offers the most competitive APY of 0.50% if you can meet the criteria. If you just open the Savings Connect account as a stand alone account with a minimum of at least $100 you’ll still earn 0.42% APY on your balance.

To earn the higher rate of 0.50% you’ll also need to open a CIT Bank eChecking account and set up an automated monthly deposit of at least $200 during the “evaluation period.”

Min Balance + ConditionsAPY
$1000.42%
$100 and $200/mo to eChecking0.50%

If you do decide to open the eChecking account for the higher APY, we should note that that account also pays an APY of 0.25% on balances above $25,000 and 0.10% APY on all amounts below that.

CIT Bank Money Market APY + Account Details

CIT Bank’s money market account is perhaps its most straight forward variable rate product. It earns a competitive 0.45% APY on all balances above the $100 minimum required to open it.

There are no fees or secondary accounts required to earn the advertised APY.

To put this yield into perspective, the national average for money market rates sits at just 0.08% APY currently.

Fees Associated with the Accounts

Like many hassle-free online savings accounts this one has no monthly maintenance fees or ongoing fees of any kind. The only fee you might want to look out for is a $10 wire fee for moving funds about; however CIT Bank will waive this fee as well if you maintain an average monthly balance of at least $25,000 in the account.

Opening an Account and Accessing Funds

To fund your CIT Savings Builder account, you’ll have four options. These are:

  • Mail a check
  • Send a wire (no fee for this)
  • ACH funds transfer, or
  • Mobile check deposit via their mobile app (download for IOS or Android)

If you plan on funding the account via an electronic funds transfer, please allow up to two business days for the money to appear in your account. Mailed checks will likely take a little bit longer depending on your location and time spent in transit.

Once you’ve opened the account, you may withdraw money in one of three ways. These are:

  • ACH Electronic funds transfer
  • Request a mailed check by CIT Bank
  • Outgoing Wire transfer

You’ll want to note the potential $10 wire fee we mentioned previously if you aren’t maintaining a balance of $25,000 or more.

ATM or Branch Access?

Like many online savings accounts the CIT Bank Savings Builder account comes with no ATM or debit card of any kind. You will not have access to cash via this method or access to any physical branch locations. If you need access to cash, you will have to transfer the money to a bank or credit union with a branch near you or request a check from CIT Bank.

Other CIT Bank Deposit Accounts

Outside of the variable rate accounts discussed above, CIT Bank also offers the following deposit products with interest payments:

  • Eight standard term CDs
  • 11 month No-Penalty CD
  • Jumbo CDs (four terms available)

We covered CIT Bank’s CD accounts earlier this year and they still feature competitive APYs. For fixed rate deposits with CIT Bank you will earn the same interest whether the account is a standard deposit or “Jumbo.” In normal interest rate environments jumbo accounts tend to pay more than standard ones.

Final Thoughts

If you’re in the market for a variable-rate, online savings account with a solid yield and FDIC insurance then the CIT Bank has some solid options for you to choose from.

However, their top tier rates come with secondary accounts that you must open and regularly make deposits into to earn those top yields.

Fundrise Review: Compare Annual Returns vs Competitors


image credit: fundrise.com

Fundrise gives investors the ability to get in on private real estate deals by pooling their assets through the Fundrise online platform. Investors can invest in real estate investment trusts (REITs), use pooled money to buy and develop residential neighborhoods or participate in the Interval Fund, which provides diversification and higher liquidity than the platform’s other options. 

You don’t need to be an accredited investor to work with Fundrise. Even so, real estate investing can be risky, and fees may be out of reach for many investors. It’s crucial to invest only funds you can leave alone for at least five years to see the maximum possible return and minimize fees. 

The barrier to entry with real estate investing is often high enough that beginners shy away from this potentially lucrative sector. Fundrise offers a $10 account minimum and a 12-month waiver on advisory fees, making it an accessible alternative to many competing real estate investment platforms. 

What is Fundrise?

Fundrise is an online investment platform that facilitates institutional-quality real estate investing for people who aren’t yet institutional investors. You can choose how much to invest since there are no mandatory minimums to get started. While you can decide your investing strategy, the actual investments are selected by a team of analysts that match various assets to your goals. Your portfolio will change over time as Fundrise acquires new investments. 

There’s no need to be (or become) a real estate investing expert to experience success and see your money grow with Fundrise. You can keep up with the latest developments related to individual investments in your Fundrise portfolio. Still, there’s a management team in charge of making big decisions about where and when they invest your money to get the most significant return. 

How Does Investing With Fundrise Work?

New users create an account with the platform and connect a funding source. Decide how much you want to invest initially and provide details about your preferred investment strategy. The properties you invest in at first form the “engine” that drives your portfolio. You can continue to add money to your Fundrise account for investing purposes, but even if you don’t, the team at Fundrise may diversify your investments when new opportunities match your strategy. 

Fundrise publishes regular updates about various investments, including exit updates, construction updates, and news relevant to the properties. 

The platform advertises that they are suitable for both experienced and new investors. If you decide to invest with Fundrise, you’ll receive regular updates about their strategists’ plans and observations about the real estate market in general. 

Fundrise is the first platform providing software-driven reporting for private equity real estate investing. Here’s what you’ll get with the Fundrise investor dashboard:

  • Newsfeed: includes educational material to help give investors context for important concepts like how appreciation powers return. 
  • Real-time performance reporting: see exactly how much your account has appreciated and how much it has earned in dividends to date. 
  • Investment goal tool (Core level accounts and higher): shows whether projected future performance is on track to meet stated goals. 
  • Auto invest: allows users to set up automatic deposits for additional investments. 

Are Fundrise Investments Any Good? 

Investing in non-traded REITs carries some significant risks but can also be lucrative. Fundrise investments potentially generate quarterly dividends, and shares may grow in value over time. 

On average, Fundrise’s investments produced average annualized returns of 8.76% to 12.42% between 2014 and 2019. In 2019, Fundrise had a net return across its entire platform of 9.47%. Of course, not all investors experienced a precise 9.47% return; most earned a bit more or a bit less than 9.47%. 

Fundrise had more than 120,000 active investors by the end of 2019, investing in 16 eREITs and eFunds, some of whom had been on the platform for more than five years. Investors’ goals range from maximizing long-term growth to generating consistent income. 

Investors with Fundrise who had the highest return on their investment were the ones who had been with the platform the longest. The time it takes to see a good return may help potential investors understand that succeeding with Fundrise requires patience. 

A Note About Fundrise Liquidity

Investors that need to liquidate shares prematurely may incur costs. They may have to wait to receive funds, as well. 

Fundrise Platform Portfolio Performance

YearInvestor Returns
201412.25%
201512.42%
20168.75%
201711.44%
20189.11%
20199.47%
20207.42%

Based on this 7 year performance, Fundrise provided an annualized average return of 10.11% to investors.

Fundrise Returns vs Stocks and Savings:

To put Fundrise’s historical returns into perspective, consider the following yields from the S&P 500 and your average savings account over the same time period.

YearS&P 500Avg Saving Rate
201411.39%0.06%
2015– 0.73%0.06%
20169.54%0.06%
201719.42%0.06%
2018– 6.24%0.08%
201928.88%0.09%
202016.26%–
S&P data provided by macrotrends.net and savings rate data provided by FDIC.gov

Although the S&P has done well over this time period, its volatility can be too much to stomach for some people.

Conversely, savings accounts, while pretty much risk-free when backed by the FDIC, have provided almost nothing for savers in terms of yields.

Fundrise Returns VS CrowdStreet, DiversyFund and Yieldstreet:

Although Fundrise is one of the early entrants to market, they’re certainly not the only real estate crowdfunding investment platform available.

Here are some of the other big players and the annual returns they’ve provided investors since their inception.

FundriseCrowdStreetDiversyFundYieldstreet
201412.25%NRNRNR
201512.42%NRNR11.27% avg
20168.75%NRNR11.27% avg
201711.44%NR18%11.27% avg
20189.11%NR17.3%11.27% avg
20199.47%NRNR11.27% avg
20207.42%17.7%NR11.27% avg
NR = Not Reported

Not all real estate investment platforms are alike, so be sure to research them each individually before making a decision.

Fundrise vs. REITs

Real estate investment trusts (REITs) trade on stock exchanges, allowing investors to purchase or sell stock quickly. Even so, a big part of the real estate investment market is private and only available to institutional investors. The JOBS Act of 2012 allowed private investments for a wider group of investors. Fundrise jumped at the chance to take advantage of opportunities created by the JOBS Act and become one of the first companies to provide high-quality investment opportunities to everyone. 

Fundrise specializes in proprietary public non-traded REITs (eREITs), similar to those on the stock market. Some non-REIT fund options (eFUNDS) are available to certain investors. 

Assets in many publicly traded REITs are comparable to assets available in Fundrise eREITs. Fundrise’s eREITs invest primarily in affordable housing across the Sun Belt. This region of the United States stretches from southeast to southwest. It includes Alabama, Arizona, Florida, Georgia, Louisiana, Mississippi, New Mexico, South Carolina, Texas, the lower two-thirds of California, certain areas North Carolina, Nevada, and Utah. 

Comparable REITs, including Camden Property Trust, Invitation Homes, and Mid-America Apartment Communities, also own single-family residences in growing markets across the southern states. 

There are a few critical differences between eREITs and publicly-traded REITs, however. 

Pricing and liquidity: REITs provide instant liquidity, limited only by the stock market’s trading hours. Fundrise investors purchase shares of eREITs, but can’t pick specific eREITs. Some investments accept limited new investments, as dedicated by the constraints of the JOBS Act. Fundrise can halt redemptions if the market is in turmoil like it did early in 2020. So liquidity may be limited with eREITs as opposed to REITs. 

Volatility and valuation: The stock market significantly impacts REIT share prices, as the value of shares with this type of investment correlates to the stock market. There’s no connection between the stock market and eREITs, however. Investors buy and sell eREIT shares at their NAV, which is updated quarterly or semiannually. 

Fees: REIT investors pay the management team overseeing the real estate portfolio. For example, the Vanguard Real Estate ETF charges a 0.12% expense ratio. Fundrise acts as the manager of eREITs and eFunds, so investors pay the platform an annual investment advisory fee. Fundrise’s fees are higher; eFunds and eREITs charge investors 0.15% of their portfolio. 

Many REITs have internal managers. Thus, investors aren’t paying fees to an external manager who oversees the real estate portfolio; and instead, they pay the REIT’s management team.

Strategy: Investors can choose between two main types of REITs; equity and mortgage. Equity REITs are primarily residential, office, industrial, self-storage, infrastructure, hospitality, diversified, data center, timberland, healthcare, retail, and specialty. Mortgage eREITs invest in pools of mortgage loans backed by commercial or residential real estate. This allows investors to narrow down their REIT selection based on sector. Fundrise eREITs focuses on affordable housing in the U.S., only. Investors interested in this trend may prefer Fundrise as an investment platform. 

Fundrise is a niche platform, so it may not appeal to many investors. At the same time, REITs are versatile enough that many investors’ plan to diversify their portfolio includes this type of investment. 

How To Get Started With Fundrise

New Fundrise investors must create an account online through the Fundrise platform. After choosing a portfolio strategy, Fundrise managers diversify the investor’s funds across multiple investment funds tailored to meet the stated goals in the portfolio strategy. 

Even after the initial investment, fund managers work to add new assets to the portfolio over time. There’s no additional investment required to receive this service, and adding assets allows portfolios to become stronger over time. 

Users can watch assets evolve through the in-app newsfeed. Fundrise regularly publishes asset updates like new construction progress, market data trends, project completion alerts, and occupancy reports. This level of transparency sets Fundrise apart from other investment firms. 

Interval Fund Option

Interval Funds are more liquid than eFunds and eREITs with Fundrise. Investors can opt into the Fundrise Interval Fund for better ongoing access to invested funds via quarterly repurchase offers. Unlike eFund and eREIT investments, Fundrise Interval participants won’t pay a penalty if they decide to liquidate Interval Funds during a quarterly repurchase offer. 

The Interval Fund is also larger than other funds on the Fundrise platform. It may offer a higher level of diversification, and it provides the same benefits of eFunds and eREITs. 

Fundrise Fees

Real estate investors are familiar with the high fees often associated with exposure to this sector. Hidden management fees and high advisory fees limit potential returns. With Fundrise, investors can own real property at a low cost. 

New software designed by the Fundrise team makes many required processes less expensive, and Fundrise passes those savings on to their investors in the form of fewer and smaller fees. 

All real estate business is also handled in-house, as Fundrise works directly with operators and real estate developers to manage deals one-on-one. Eliminating most intermediaries allows the company to keep fees low. 

Here’s a breakdown of Fundrise fees. 

  • Annual Investment Advisory Fee: 0.15% (waived under certain circumstances)
  • Standard Portfolio Fee: 0.85% annually
  • Redemption Program Participation Fee: 0% reduction in share price value if investors sell shares back to Fundrise within 90 days; 3% if shares were held 90 days to 3 years; 2% if shares were held 3-4 years; 1% if shares were held 4-5 years; zero fees if shares were held more than five years. 

All investment funds, EFT, and REITs incur expenses offset by annual management fees paid by investors. However, these fees are rolled into the fund, making it difficult for investors to understand how much of their gains are reduced by fees. 

Fundrise’s fees are straightforward. Investors pay $8.50 per year for every $1,000 invested on the platform. Those fees go toward the operating expenses of the real estate projects in Fundrise’s investor portfolios. They may pay for construction, zoning, accounting, or other project-specific costs. 

Fundrise eFund investors may also experience Liquidation fees and Development fees applied at the fund level, and these fees aren’t paid by investors directly. eFunds often incur many of the exact costs as eREITs, but eFunds pay the expenses directly, while eREIT projects cover those costs with money from outside borrowers. 

Is Fundrise Worth it For New Investors?

Maybe. Many online real estate platforms are available only to accredited investors (those with a net worth of $1 million or more and an annual income of $200,000 or more). Fundrise is available to any investor. The low investment minimums and intuitive platform make it ideal for those who want to get into private real estate investing but don’t have hundreds of thousands of dollars to sink into a fund. 

New investors should read the fine print and have a good idea of how and when they could get their money back if they need to close their positions with Fundrise. They should also be careful of fees and understand that liquidating before they’ve been with Fundrise for at least five years could carry a hefty penalty. 

Fundrise real estate investments may work for you if:

  • You have some experience as an investor, and you have money to invest but aren’t accredited. 
  • You plan to leave the money you invest with Fundrise alone for at least five years. 
  • Your personal financial situation is stable, and you understand the risks associated with investing in the real estate market. 
  • You understand that you will pay fees with Fundrise, and you could lose money on your Fundrise investments. 

Fundrise Customer Reviews

image credit: fundrise.com

Fundrise is a unique platform, and customers who write reviews seem pleased overall with their experience. The company generally receives negative reviews from investors who object to the lack of liquidity with eREITs and eFUNDs, even though the company clearly states the fee structure multiple times throughout the investing process. 

Reviewers seem happy with the returns they get from their Fundrise investments, although some who tried to withdraw funds before they had been with Fundrise for five years weren’t pleased with the associated fees. 

Fundrise Reviews on Trustpilot

The Fundrise has 312 reviews on Trustpilot:

  • Excellent: 84%
  • Great: 4%
  • Average: <1%
  • Poor: <1%
  • Bad: 10%

Here are a few Trustpilot reviews from verified Fundrise investors that may help you decide whether the platform is a good fit: 

“This is not a savings account, a publicly-traded REIT, or anything else that you can just sell and get your money back. This is a private equity investment and anyone who invested should have taken time to carefully consider the amount of money they were putting in this.” -Paul Bommarito

“I find it very easy to put money in but very hard to take money out. The process should be the same both ways. Other than that, I think the design and implementation has been pretty good compared to your competitors (iFunding.co)” -Raymond L

“I’ve been with Fundrise for 4 years with a total return of 27%. I reinvest my dividends, and get a small increase almost every single day. This investment is for the long haul, and is ideally for those that would like to supplement income with dividends. Interestingly the negative reviews are accurate. Fundrise is not liquid. You’ve chosen to invest in real estate. Your money is literally tied up in property. You cannot just pull your money out when you feel like it. I no longer add funds to my Fundrise account. I just allow the reinvested dividends and compound interest to do its job.” -Terez Lundquist

Fundrise on the BBB Website

Fundrise has 77 published customer reviews on the Better Business Bureau (BBB) website. The company has an average rating of 3.66 stars out of five. The BBB closed 59 customer complaints in the past three years and 32 in the past 12 months. 

Customers typically complain about having difficulty getting their money out of the investments promptly. Fundrise responds to each customer complaint, often with some variation of this statement:

“For context, under our redemption program, all redemption requests that are made during any given quarter, regardless of when the request is made, remain in a pending state until the end of the quarter at which time they are expected to be reviewed and processed. 

We make an extensive effort to ensure that investors are made aware of this fact prior to placing an investment with us. For example, as part of the process of placing an investment, each investor is required to acknowledge the following: ‘I recognize that my investment is in real property, which is fundamentally a long-term, illiquid investment; that liquidations, if approved, are paid out quarterly for the eREITs and Interval Fund, and monthly after a minimum 60-day waiting period for the eFund; and requests for liquidation for the eREITs and eFund may be suspended during periods of financial stress‘”

Fundrise on Reddit

Reviews of Fundrise as an investing platform from Reddit users line up with Trustpilot and BBB reviews. Investors who didn’t understand Fundrise’s fees for early withdrawal of funds weren’t pleased with their experience. 

“I invested a lot of money through Fundrise early last year and I just withdrew all of it after a 3 months waiting period. Overall, I lost money with Fundrise.com due to minimal dividends and 3% penalty for redeeming investment after 15 months.”

-re-emerald

“Fundrise is legit, but it might not be the best way for you to get exposure to real estate. A publicly traded REIT or REIT index fund is much easier to get in and out of. Private REITs like Fundrise should really be held until they liquidate, which could be five or ten years. I like Fundrise but I think an illiquid long-term investment like this should not be a core part of your portfolio.”

-Citryphus

“Invested a few times up to a certain amount, and am holding any further investments. I think the actual returns are/will be less than the claims. Also, look at the “process” to get your money out.”

-RedditDogX

Is Fundrise Worth it? 

The Fundrise platform provides an easy-to-navigate way to diversify your investment portfolio into the world of real estate. 

The platform may be ideal for investors with a portfolio that includes stocks and bonds and are willing to leave their investments alone for at least five years. Investors interested in real estate may find that his platform allows them to easily access high-quality assets while experiencing returns that far outpace REIT stock investments.