If X-Money offered a credit card with “4% cash back on everything”, would you sign up?
intercst
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Apparently, they are offer 6% APY on deposits by invite only to paid subscribers. No idea if there is a cap but I’d take 6% (assuming it is FDIC) if they offered it to me.
Musk seems to be focused on avoiding banking regulations, so I doubt the 6% is FDIC-insured. {{ LOL }}
intercst
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Further reading suggests it is FDIC covered via a partner(s) bank because, as you stated, he wants to avoid the cost and challenges of setting up his own bank.
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I probably wouldn’t. X isn’t a bank. Your money is in a partner bank, and the FDIC insurance protects you if that bank fails - not if there’s any problem with X Money. The bank failing and X Money failing are two separate things, and only the former is insured. A lot of people found that out the hard way when all the fintech companies went bust a few years back:
This is the part that catches most people off guard: FDIC insurance (and NCUA insurance for credit unions like Elements) only protects you if the bank fails. It doesn’t cover you if the unregulated middleman managing the ledger between you and the bank collapses or simply loses track of your money.
That “High-Yield” Fintech Savings App? | Elements Financial
Is that a risk worth taking for a (probably temporary) 2% delta on yield compared to other high-yield savings accounts?
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Good point. I went back and looked at that detail and you are correct.
2% isn’t worth that risk.
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Who would have guessed that cutting a Private Equity funded, fintech operator out of the transaction would improve safety?
intercst
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Also worth noting, the card offered by X Money is a debit card. Not a credit card. So you’d need to give them your money upfront, which is a different risk proposition than if they were extending you credit.
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The 6% interest rate is only valid for premium tier members ($40/month). It does include grok tho, so that’s a plus.
Unless you like using the best AI.
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Q: Which one is that?
A: Any one not named Grok.
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