4 Out Of 5 And 6 Out Of 10 Is It BETTER Or BAD?!

IGR | Jul 10, 2023 | 580 posts since 2020

4 out of 5 and 6 out of 10 Highest Yield HYSA on DA list are from FinTech.

As a disclosure I have none of those...

The Reason being is that by my assessment these are not "Accounts" they are repackaged Fintech products and when "purchased", all the marketing deception aside, by my estimate have 66% chance of NOT being covered by FDIC Insurance and 99% chance of NOT being protected by Regulation E.

What is being sold as HYSA,MMDA or CD in many aspects are MATERIALLY different than original FI's Deposits and INCONSISTENT with FI's Disclosures and Truth-in-Savings

As a result, the Yield on my accounts held DIRECTLY with Banks or CUs is between 30% to 55 times lower, because of the undisclosed scheme to subsidize Higher Yield when resold by MaxMyInterest and SaveBetter.

This is not a trivial project for me to tackle alone...

Everyone who wants to weight in are welcomed, especially those who can assist representing the class.

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Answers

midas89 | Jul 10, 2023 | 996 posts since 2017

@IGR Respectfully, I disagree with your estimate that bank accounts opened via a FinTech have 66% chance of NOT being covered by FDIC insurance. Actually, accounts opened at a FinTech where the money goes to an FDIC-insured Custodian Bank and/or FDIC insured high-paying-interest bank are 100% insured via FDIC Pass-Through Insurance. The same applies to NCUA insured credit unions.

If you don't believe me, please believe the FDIC which goes into detail to explain Pass-Through FDIC Coverage. Start with the Definition Section. Link:
https://www.fdic.gov/resources/deposit-insurance/diguidebankers/fiduciary-accounts/index.html

If you don't believe the FDIC after reading their own rules & confirmation on this, simply Google FDIC pass-through insurance requirements to get links confirming what is written at the FDIC site.

Again, I am no personal fan of dealing with FinTechs, nor am I dealing with any FinTechs. I am only a fan of accuracy, and it is an accurate fact that FDIC Pass-Through Insurance exists and applies to any FinTech that places your money into FDIC insured banks or NCUA insured credit unions.

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IGR | Jul 11, 2023 | 580 posts since 2020

I DO NOT Believe you, take it personally or not.
I don't manage my Banking/Financial affairs based on beliefs or interpretations.
I do not believe that FDIC "Financial Institution Employee’s Guide to Deposit Insurance" is applicable to Fintech industry.
I do not see any evidence that Raisin Solutions US LLC regards itself as Financial Institution under the guideness of FDIC.
As I don't have any proof that Raisin Solutions US LLC and Six Trees Capital LLC have Risk Management and Compliance offices, I do not give any Credit to their claims about specific instances that are Regulated to the precise meaning and execution.

I do believe @midas89, take it personally or not, is attempting to deflect from or doesn't understand how, "this topic" and FDIC Insurance are interlinked.
I do believe there some people here who will stampede running on the Banks at first sign of Raisin communication glitch or data breach, realizing that Regulation E doesn't apply to the willful or negligent act of their Agents and FDIC Coverage may only be Passed-Through by the Court Order.
These are the people who didn't bother to comprehend that "linked irrefutable proof" relates to "Fiduciary Accounts".
Every line of MMI or Raisin's "Disclosure", if one can find any, makes sure to spell the absence of Fiduciary relationship within voluntarily Fintech Membership.
GOOGLE THAT all the way to the Inside of the Business!!!

if somehow, someone feels insulted, I am not sorry about the failure to read my post entirely!.
I welcomed people who shares my concerns, those who doesn't shouldn't be wasting my time, but could be freely introducing their opinion on their own, time and post.
STOP wasting my time with ridiculous references to online articles written by individuals regarding themselves as CEPFs - 16 hours over a two-year period online self-study with the Prerequisites;
Six months relevant experience, high school diploma or GED

"unless the FinTech accounts were paying considerably more money than banks and CUs we can deal with directly."
"FinTech accounts"????
while Fintechs spell it out for you that they hold no Accounts?????
Good luck with that, untill one day you realize that "banks and CUs" hold no funds for you since an authorized transfer to North Korean Nephew or Nigerian Prince.

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Kaight | Jul 10, 2023 | 1,192 posts since 2011

For whatever my opinion might be worth to you, I would not touch Fintech offerings with a ten foot pole. But that is solely because twenty foot poles are presently in short supply.

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txFish1 | Jul 10, 2023 | 476 posts since 2023

I would also not touch a FinTech offering with a ten foot pole. I do agree with midas89 about the FDIC pass through insurance but at least with a Broker sold CD at Fidelity, Vanguard etc. you have a CUSIP number and name of the issuing bank right there in your account and if I understand correctly you do not have that at Raisin.

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IGR | Jul 10, 2023 | 580 posts since 2020

Yes, the parallel could be built, there are aspects similar to Brokered CD.
As it thoughtfully mentioned there is a difference between Licensed, Registered, Regulated, Supervised and Insured Brokers such as Fidelity, Vanguard etc. and free roaming Limited Liability entities such as Raisin Solutions US LLC and Six Trees Capital LLC.
The difference is NOT "at least", the difference is Critical to the Covered Insurance event or when the Liability issue arises.
@midas89 is miles away from grasping the concept of Pass-Through Insurance.
And in times of Internet Anonymity @midas89 claims for accuracy and impartiality is not credible!

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txFish1 | Jul 10, 2023 | 476 posts since 2023

@IGR I have been buying CDs and Treasuries from Fidelity for 30 years and have always felt comfortable with them but with FinTechs such as Raisin I just would not feel comfortable with giving them a penny of my money no matter what the rates are but that is just me.

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IGR | Jul 10, 2023 | 580 posts since 2020

that aren't the points.
not about CDs and Treasuries, that don't belong to the same conversation.
not about Fidelity, that as a Broker is Registered with FDIC
not about the comfort level, that everyone choses for themselves.

it is somewhat about the feel.
when i learn that someone, doesn't matter @midas89 or midas90, make between 30% to 50+ times more than IGR or txFish2, at the annual cost of unearned income between $1250 and $25,000+, it makes me feel stupefied and cheated.

I'm not p!ssed at midasXX, they deserve to be rewarded for taking chances with Brokers or Fi's.
I'm not so much p!ssed at Fintech, they invented the way to game the system and make the profit.

I am p!ssed at participating Banks and Credit Unions, AND nonparticipating Regulators of all Statues.
I expect Regulator to Supervise all participants of Financial Industry.
I expect Financial Industry to be transparent and forthcoming while accepting and using Customers Funds.
I expect some Connecticut based Bank to Disclose to me that MMDA means two vastly different kinds of Money Market Accounts.
I expect some Connecticut based Bank to Disclose to me that the "Current Rate" means three vastly different rates, while only lowest rates are being displayed as "Deposit Rate".
I expect some California based Credit Union to Disclose to me that EWP specified in Truth-in-Savings means the condition of Share Certificates and are NOT specific to Share Holders...

the list is endless, the expectations are basic

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midas89 | Jul 10, 2023 | 996 posts since 2017

@IGR ... I have linked irrefutable proof that the FDIC covers Raisin-opened savings accounts at FDIC-insured banks via Pass-Through Coverage. You have not yet proven that Raisin-opened accounts are not covered by FDIC Pass-Through Coverage. Until you do, I will believe that FDIC Pass-Through Coverage exists and that it covers money placed into FDIC insured banks, and this is the ONLY part of me wanting accuracy related to this topic.

Your need to insult me by saying that I am miles away from grasping the concept of FDIC Pass-Through Insurance is inappropriate, inaccurate, unfair, and unnecessary. This should be a civil discussion, without insults. I don't insult you.

If you truly feel that the FDIC's online documentation does not prove that FDIC Pass-Through Insurance exists and that Raisin's claim that their clients' money is deposited into FDIC insured banks that offers $250,000 insurance, please post the proof that states Raisin and other FinTechs are lying to the people. And then I will no longer state that FDIC Pass-Through Insurance exists and that it covers pooled money accounts at FDIC-Insured Banks. Oh, and by the way, Ken here at DA has posted articles that state that accounts opened at Raisin and others where the money is placed in FDIC insured banks is covered, so I guess you are implying that Ken is in error too.

We can disagree on this. You're welcome to state and to believe that accounts at Raisin are not FDIC insured. Fine. But don't post insults please. Just state you disagree with me, and we will be done with it.

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txFish1 | Jul 10, 2023 | 476 posts since 2023

@midas89 I do agree that Raisin or any Fintech CDs or Savings accounts that are deposited with them do carry FDIC Pass-Through insurance but what would bother me is not seeing the exact dollar amount of every individual CD or Savings account that I have invested. I have never seen a Raisin statement but what I have heard is that it does not list the individual assets and where your money is invested whereas with Fidelity the second I but a Brokered CD it shows up in my account that I have 100K of Wells Fargo with a CUSIP number and all pertinent info. Not having that at a FinTech would be a deal breaker for me

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midas89 | Jul 10, 2023 | 996 posts since 2017

@txFish1 I agree with you 100%. I, too, would never deal with a FinTech unless the FinTech accounts were paying considerably more money than banks and CUs we can deal with directly. And if that were ever the case, I would only want to deal with a FinTech where I have written proof on exactly how much money I have at any of the FDIC-insured banks my money is placed, with the name of the bank in writing, of course.

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IGR | Jul 11, 2023 | 580 posts since 2020

"FDIC Pass-Through Coverage exists" and "it covers money placed into FDIC insured banks" AND Pass-Through Coverage is more common than Direct Coverage.
Once @midas89 designates Beneficiaries and Powers to the Deposit Account, the Account becomes Informal Trust where the Coverage is Pass-Through on behalf of Beneficiaries.
There, if "this is the ONLY part" then you are totally Accurate and absolutely UN"related to this topic".
Please, make sure you understand that "I have LINKED IRREFUTABLE proof" and "You have not yet PROVEN that...ARE NOT..." is not the format of the conversation I am willing to maintain

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midas89 | Jul 11, 2023 | 996 posts since 2017

@IGR I am sure some people will agree with you that there is a 66% chance of not being FDIC insured related to FDIC Pass-Through Insurance on individual solo accounts at FDIC-insured banks people have their money in where they went through a FinTech like Raisin to open, while there will be others like me who think there is a zero chance. Thank goodness for a forum like this where people can read both sides of an issue and they can make up their own mind who they believe and what they believe. And I do not mind discussing things here at DA, as long as there are not any insults.

I do not have a FinTech account, and I do not have any brokerage accounts. I am not advocating for Raisin accounts or any FinTech accounts. I am only stating that for those who do have these accounts, assuming their money is truly placed in an FDIC bank, their money is safe up to $250,000, per the FDIC and Business Insider and a ton of other sites including here at Deposit Accounts. It is also being stated in writing at the relevant FinTechs, and if they are lying to people all these years about the money being fully FDIC insured up to $250,000, the FTC and/or the FDIC and/or the Fed would have said something.

Happy Banking, IGR!

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txFish1 | Jul 11, 2023 | 476 posts since 2023

@midas89 Agreed I also like the discussions here on DA. We all have our thoughts on topics but I like to come here and get others opinions and info and learn something new.

The main reason I have a brokerage account is convenience of having most of my assets in one place but I have to admit that that there are times when I worry about what would happen if Fidelity registered my securities wrong and maybe I should buy directly from Banks and Credit Unions and just do a little extra record keeping. Admittedly I have started doing a little more direct buying the last few years and have found it easier than I imagined.

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midas89 | Jul 10, 2023 | 996 posts since 2017

First, I wanna reiterate I do not have a Raisin/SaveBetter acct, and I am in no way advocating anyone open one.

From Business Insider: "You have FDIC insurance for banks (or NCUA insurance with credit unions) when you open accounts through SaveBetter. This means up to $250,000 is safe in an individual account, and $500,000 in a joint account."

Business Insider is a long-time business and financial news company. So, IGR says there's a 66% chance account holders at Raisin and other similar FinTechs are not really FDIC insured, and on the contrary, the FDIC and Business Insider says that account holders are.

IGR says I am miles away from being accurate regarding FDIC Pass-Through Insurance. I say I fully understand Pass-Through Insurance.

Here is the Business Insider Link: https://www.businessinsider.com/personal-finance/savebetter-review#:~:text=Yes%2C%20SaveBetter%20is%....

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JeffinEasternFL | Jul 10, 2023 | 744 posts since 2020

Diddo, me too, no hesitation w/ Raisin. ZERO sleep lost and only a few mins typing here! :)

I'm perfectly fine and it is easy to use! I once had a FI Wellbetter (?) Online saving account as well once but the "top rate" became a "bottom rate" like many other Banks/FI's. I stopped chasing rates and MBoI is my choice money market to park money, get SERVICE and a rate always near the top in all interest environments...considering I only keep excess CD monies there a .25~ APY difference makes little difference in real money..

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happyharold4 | Jul 10, 2023 | 388 posts since 2022

So what is a list of these so called Fintechs like Raisin here on DA?

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