Special thanks to reader Chao for contributing this post.

About Yotta

Yotta Saving is a newly launched savings account. Yotta’s base APR is very low at just 0.2%, but you also receive lottery tickets based on your account balance. Those tickets have a chance to win prizes. The grand prize is $10 million! And the expected APR from the lottery component is very high, at over 4%. We’ll analyze that in detail below.

Yotta offers FDIC insurance through its partner bank, Evolve Bank & Trust, so your principal should be protected.

Sign-up Link

If you sign up now through our referral link, you can get an extra 100 tickets for the following week.

Lottery System

Yotta issues lottery tickets every week based on your deposit balance.

  • Each Monday, your account balance divided by $25 determines how many tickets you get for that week. Depositing or withdrawing money during the week will cause tickets of the corresponding value to be added or canceled.
  • You can receive up to 10,000 tickets per week. In other words, once your balance reaches $250,000, depositing more will not earn additional tickets. Since the FDIC insurance limit is generally also $250,000, we do not recommend exceeding that amount.
  • If you refer others, each referral earns you 100 tickets for use the following week. These do not count toward the 10,000-ticket limit.
  • Tickets can be used in the weekly drawing. The prize amounts and odds are shown below. The top prize is $10 million!

The detailed rules are as follows:

  • Each week starts on Monday, and one ball is announced each day. From Monday through Saturday, there are 6 numbers between 1 and 70, with no repeats. Sunday’s ball is the Yotta Ball, a number between 1 and 25.
  • Your prize depends on how many numbers you match. You can calculate the odds yourself. The prize amounts and odds come from the official rules (these odds may change depending on their budget).
  • Prizes labeled “per ticket” pay that amount to each winning ticket. Prizes without that label are split among all winners in that tier.
  • Because the company is currently spending aggressively to acquire users, various small prizes may change. The $10 million prize is less likely to change because it is not paid by Yotta, but by an insurance company. Among the smaller prizes, $0.15 and $0.75 used to be $0.2 and $0.8.

Estimating the Return from the Lottery

Suppose you deposit $10,000 for 52 weeks. Assume that everyone else in the world collectively holds 1 million tickets (which would imply Yotta deposits of $25 million, almost certainly an overestimate). Under that assumption, let’s do some calculations.

Expected annual return: 4.21%

The expected value of a single ticket is $0.0192. If you’re interested, you can open this Google Sheet to verify.

90% chance your annual return is above 2.76%

In practice, it is hard to realize the full expected value because the variance is large. Still, this account is a very good deal. Even if we ignore all low-probability prizes because they are harder to model, after one year there is a 50% chance that APR>3.24%, a 90% chance that APR>2.76%, and a 99% chance that APR>2.4%. Below is the distribution of one-year APR after running 100,000 simulations (code here).

Ticket Results from July 13 to July 20

In reality, Yotta Savings deposits were not nearly that large. The previous week’s winning results were:

  • Last week, 3 people won the $300 prize (this week that prize is gone and has been replaced by a $500 prize), and 1 person won the $800 prize.

Based on the 1/108397 chance of winning the $300 prize, if 3 people won, then the total ticket pool was about 108397*3 tickets, or roughly 300k tickets. So we can revise the APR estimate to 4.59%.

Of course, as deposits continue to grow, the probability of having to split prizes also increases, so in theory your APR will decline. However, since prize-splitting is itself a low-probability event, an APR in the 3%–4% range seems fairly reasonable.

Other Things to Know

  • You can apply with an SSN. During the application process, there is nowhere that requires you to prove whether you are a resident.
  • Lottery winnings are reported on Form 1099-MISC (you won’t receive one if the amount is under $600). This is passive income and does not affect immigration status.
  • Tickets earned from new deposits cannot choose numbers that have already been drawn. For example, if Monday’s ball is 2 and you deposit $25 on Tuesday, you will find that the ticket you receive cannot select the number 2. Only starting from a future Monday will money deposited that week achieve maximum value.
  • You can choose your numbers yourself each week before the first number is drawn on Monday, or you can have the system randomly select them. If you forget to make any selection by Monday, the system will automatically generate random numbers for you.
  • The daily deposit/withdrawal limit is $10,000. The monthly deposit/withdrawal limit is $40,000. After contacting customer service and uploading an ID, the daily deposit limit becomes $100,000 and the daily withdrawal limit becomes $50,000.
  • I personally emailed the Yotta CEO, and they mentioned that they may support importing your own numbers in the future. That would allow you to write your own program to generate and upload numbers. Note that while picking your own numbers cannot change expected value, it can change variance!
  • If you don’t trust Yotta and think the company might choose balls in a way that minimizes its losses, I wrote a post showing that if you are rich enough and bored enough, you can still achieve a 1% APR.

Sign-up Link

  • Yotta sign-up link (you’ll get an extra 100 tickets for the following week. You can also use referral code: CHAO1; the 4th character is the letter O)