this post was submitted on 23 Nov 2024
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KEY POINTS

  • Thousands of Americans will receive little or nothing from savings accounts that were locked during the collapse of fintech middleman Synapse.
  • Customers believed the accounts were backed by the full faith and credit of the U.S. government.
  • CNBC spoke to a dozen customers caught in the predicament, people who have lost sums ranging from $7,000 to well over $200,000.
  • While there’s not yet a full tally of those left shortchanged, at fintech Yotta alone, 13,725 customers say they are being offered a combined $11.8 million despite putting in $64.9 million in deposits.
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[–] [email protected] 28 points 15 hours ago (2 children)

This sucks big time. Real question, what motivated people to put huge sums of money into a startup company? Some deal on a loan?

[–] [email protected] 20 points 11 hours ago (1 children)

I believe they were told that it was FDIC insured.

[–] [email protected] 3 points 9 hours ago (1 children)

Regardless though. What’s the the incentive of some new app over a bank or some already known app?

[–] [email protected] 6 points 9 hours ago (1 children)

Interest rates. Then again, you can go for other more reputable brands that have good interest rates. I was making around 5% with Vanguard cash plus for some time. It's based on money market though, so as federal interest rates went down, so did the rates for that account. There are smaller companies with slightly better rates, but IMO Vanguard is way more trustworthy than all these new Fintech startups and I know the FDIC insurance is legit.

[–] [email protected] 2 points 8 hours ago

Yes I agree. I was thinking of switching from my current bank to one that had a 5% interest for my emergency fund but it's a new bank to me. I didn't recognize the name. Decided not to do it because I don't know who they are. I'm referring to Openbank.

[–] [email protected] 8 points 13 hours ago (1 children)

not a huge sum, but I had $10k in it, because it was a fun bullshit app that scratched the lottery itch despite it earning less than regular interest over my time with it

[–] [email protected] 3 points 9 hours ago (1 children)

What was the lottery aspect? Damn $10k to just play with. That’s a different kind of life.

[–] [email protected] 1 points 5 hours ago (1 children)

Isn't $10k like one months mortgage on a house in the bay area? And just swing by vegas... plenty of people spending that kind of money. It may seem like a different kind of life, but often it is just a different location. They often live a lot like the rest of us... thier emergency fund might last 2 months instead of one, but they are still pretty close to broke if they lose thier job. When someone starts dropping $100k... that is a different life.

[–] [email protected] 1 points 53 minutes ago

Damn I guess I’m broke then. Thought I was doing alright.