8% Interest savings rate

Ultra Tempest

Anyone tried the Nexo crowd? nexo.io

They claim to offer 8% AER interest on savings paid daily with instant access to your savings.... seems too good to be true.

Especially when compared to the terrible rates offered by Irish banks, usually lacking instant access & the inability to top up your savings.

They don’t charge DIRT & claim there is no Capital Gains Tax to be paid supposedly.

The minimum top up amount is €1000 so in a day you’d earn 21c.

NIMAN

I just checked out their website at https://nexo.io/earn-interest/eur

... and all the while I was thinking, "so where's the catch".

Hopefully someone with plenty of knowledge will come along and tell us what it is!

Joe Schmo

I haven't seen these guys before but this is how it works:
Person A owns Bitcoin. They deposit the Bitcoin with Nexo and receive an amount of EUR in return which they pay 8%+ interest on. The Bitcoin acts as collateral.

The EUR came from person B, who deposited the EUR with Nexo and earn 8% interest on it.

To me, this it looks like Persons B EUR is not guaranteed by any central bank or investment protection fund. If Nexo goes bankrupt they all creditors (like person should be made whole from the collateral of person A- assuming the value of that Bitcoin remains high enough to cover creditors and other expenses of a company going bankrupt.


There may not be DIRT due (because this is not a bank account) however there is likely a tax liability on the interest earned by person B.

I assume if Nexo was offering a bank account it would be regulated. However if it's not a bank account then what is it? Doesn't appear to be peer to peer lending as Nexo are likely the counterpart to Person A on the loan congrats that are issued (via blockchain). So of its not P2P I would assume that kinda leaves an investment product. Which would mean it should be regulated. Maybe the disclosures you receive when opening an account would explain why this product which looks like and acts like an investment should not be regulated like an investment product...

Wheety

If something sounds too good to be true...

NIMAN

Joe Schmo wrote: »

I haven't seen these guys before but this is how it works:
Person A owns Bitcoin. They deposit the Bitcoin with Nexo and receive an amount of EUR in return which they pay 8%+ interest on. The Bitcoin acts as collateral.

The EUR came from person B, who deposited the EUR with Nexo and earn 8% interest on it.

To me, this it looks like Persons B EUR is not guaranteed by any central bank or investment protection fund. If Nexo goes bankrupt they all creditors (like person should be made whole from the collateral of person A- assuming the value of that Bitcoin remains high enough to cover creditors and other expenses of a company going bankrupt.


There may not be DIRT due (because this is not a bank account) however there is likely a tax liability on the interest earned by person B.

I assume if Nexo was offering a bank account it would be regulated. However if it's not a bank account then what is it? Doesn't appear to be peer to peer lending as Nexo are likely the counterpart to Person A on the loan congrats that are issued (via blockchain). So of its not P2P I would assume that kinda leaves an investment product. Which would mean it should be regulated. Maybe the disclosures you receive when opening an account would explain why this product which looks like and acts like an investment should not be regulated like an investment product...

... and I'm out!:D

Got an email today from Nexo they upping their interest rate to 10% on deposits held in your wallet. That’s serious stuff. Have had a low 4 figure sum in there for over a year now ticking away earning 8% PA paid daily without issue and the company appear very solid with their CEO regularly on things like Bloomberg etc.

This move to 10% was the push I needed to move larger sums over to Nexo as it’s just free money (this is house deposit money etc that I don’t want locking into investments), 100 euro for every 1000 on deposit is a serious return for what is no risk from what I can see.

Really surprised I’m not seeing more people talking about it or using it.

Rodney Bathgate

A scam involving crypto? There’s a first.

Rodney Bathgate

Rodney Bathgate wrote: »

A scam involving crypto? There’s a first.

Scam involving crypto? Not here there isn’t.

Rodney Bathgate

Kamila Incalculable Museum wrote: »

Scam involving crypto? Not here there isn’t.

Yeah, let’s wait and see. I expect to read that Nexo’s wallet got cleared out by an insider at some point in the future.

super_furry

Joe Schmo wrote: »

I haven't seen these guys before but this is how it works:
Person A owns Bitcoin.

Aaaaaand I'm out.

Rodney Bathgate

Rodney Bathgate wrote: »

Yeah, let’s wait and see. I expect to read that Nexo’s wallet got cleared out by an insider at some point in the future.

Do you know anything about them? This is not some shady unknown company, they have serious traction now. Also deposits are all guaranteed.

y0ssar1an22

was gonna gamble €100, but the min deposit is €1000

y0ssar1an22

y0ssar1an22 wrote: »

was gonna gamble €100, but the min deposit is €1000

As I said I’ve had a few k in there for over a year now constantly and I was also maxing my credit card into Revolut and transferring to Nexo for 50 days and then back out to pay off the credit and repeat so I’ve done loads of withdrawals also and they are very fast and smooth. This also maxed my cash back on the cc but has to stop as there is now a risk of the cc seeing Revolut as a cash advance which has high fees etc so not worth while.

hawaii501

Might gamble with 1k to see what the fuss is about.
Am I able to withdraw at any time?

Rodney Bathgate

Kamila Incalculable Museum wrote: »

Do you know anything about them? This is not some shady unknown company, they have serious traction now. Also deposits are all guaranteed.

Guaranteed by whom?

Plenty of crypto exchanges and other businesses were well regarded until they disappeared overnight. (I know they are not a crypto exchange before you point that out.)

y0ssar1an22

for every $1 we lend, we receive at least $2 in insured collateral, making your investments virtually risk-free.

is that not a ponzi scheme?

Sheep Shagger

Kamila Incalculable Museum wrote: »

Do you know anything about them? This is not some shady unknown company, they have serious traction now. Also deposits are all guaranteed.

By who and what is their credit rating/history?

You know what they say, if it sounds like **** then it probably is...

Buyer beware and all that.

One More Toy

Is there a referral system in place?

Sounds like a ponzi scheme to me

Mr.S

Mr.S wrote: »

Edit: After a quick research it would seem there is no deposits guarantee whatsoever, just deposit insurance that could cover partial funds under certain circumstances. You would be mad to deposit any meaningful sort of money there.

Comes down to risk / stupidity I guess, if you want to risk 1000's for the sake of 10% return.



Not quite "all deposits are guaranteed"

People just appear to want it not to be true.

I can tell you it’s not Nexo that is losing me money at the moment it’s my normal investments through leading organisations, that’s also all locked in not instantly withdrawable. As I said I’ve made multiple withdrawals, funds in my revolut account next working day.

Deposits are guaranteed by assets against them and an insurance policy that is quite clear.

Sheep Shagger wrote: »

By who and what is their credit rating/history?

You know what they say, if it sounds like **** then it probably is...

Buyer beware and all that.

All I can say it’s I’ve had money in there for over a year made multiple deposits and withdrawals and the interest appearing every day is not “too good to be true”. I’m going to move the majority of savings I have in cash in there bar a small amount I’ve decided. Only for I’ve other money tied up in traditional investments which I’ll be very lucky to get my own back in after 5 years I’d be putting in more.

One More Toy wrote: »

Is there a referral system in place?

Sounds like a ponzi scheme to me

It’s a much a Ponzi scheme as you local credit union. They pay high interest to encourage people to hold money so they can loan it out, quite simple really. Not sure what you mean by a referral system.

Just said I’d highlight this with such terrible interest rates in banks as people might be interested and to my surpise it’s not being talked about but it appears it’s all negativity.

Credit Unions are authorized to take deposits, and are regulated by the Central Bank. Suggesting they are a ponzi scheme is both wrong and dangerous

coylemj

Kamila Incalculable Museum wrote: »

Do you know anything about them? This is not some shady unknown company, they have serious traction now. Also deposits are all guaranteed.

Well that changes everything. I mean if your funds are guaranteed, I'm in.

Not.

coylemj

Kamila Incalculable Museum wrote: »

It’s a much a Ponzi scheme as you local credit union. They pay high interest to encourage people to hold money so they can loan it out....

Who are they lending to? If they're paying the type of deposit rates you're quoting, they can only be in the subprime market i.e. lending to high risk borrowers who can't get loan approval from the regular banks.

And in the current economic climate, an awful lot of those people are now unemployed. So guess what happens next?

HamSarris

Kilboor

Please don't put your savings for a house deposit all into that company. I'd honestly feel bad for you when they go tits up.

Fair play on the gains from the scheme so far though!

coylemj

I obviously shouldn’t have bothered highlighting Nexo as people are just crazily dismissive of anything a bit different.

coylemj wrote: »

Who are they lending to? If they're paying the type of deposit rates you're quoting, they can only be in the subprime market i.e. lending to high risk borrowers who can't get loan approval from the regular banks.

And in the current economic climate, an awful lot of those people are now unemployed. So guess what happens next?

They are loaning to people who want fiat currency but don’t want to sell their crypto currencies.

To borrow you have to deposit cryptocurrency and if you don’t make your repayments they call in the loan by keeping the crypto that the loan was secured against.

Kilboor wrote: »

Please don't put your savings for a house deposit all into that company. I'd honestly feel bad for you when they go tits up.

Fair play on the gains from the scheme so far though!

It’s not all them only what I have sitting in deposit accounts earning nothing, the rest is tied up in other things most of which is more likely to lose money than gain anything despite being very much the type of thing people try to diss Nexo would be advising you to put money into.

Bubbaclaus

This is going to end in tears.

At least they are guaranteed tears.

coylemj

Kamila Incalculable Museum wrote: »

To borrow you have to deposit cryptocurrency and if you don’t make your repayments they call in the loan by keeping the crypto that the loan was secured against.

Well that puts a completely different complexion on it. And there was I thinking that it was all a scam, built on a financial house of cards.

If the money they take in as deposits are loaned out, with crypto currencies accepted as security, what can possibly go wrong?

bilbot79

Kamila Incalculable Museum wrote: »

Got an email today from Nexo they upping their interest rate to 10% on deposits held in your wallet. That’s serious stuff. Have had a low 4 figure sum in there for over a year now ticking away earning 8% PA paid daily without issue and the company appear very solid with their CEO regularly on things like Bloomberg etc.

This move to 10% was the push I needed to move larger sums over to Nexo as it’s just free money (this is house deposit money etc that I don’t want locking into investments), 100 euro for every 1000 on deposit is a serious return for what is no risk from what I can see.

Really surprised I’m not seeing more people talking about it or using it.

Is that you Nexo?

This sounds like that time Anglo Irish had a savings account with 7% interest

y0ssar1an22

i'll do some research on them tomorrow and try to make an informed decision

thenightman

When I googled Nexo, the first result was for a toilet. Says it all really!

One More Toy

Kamila Incalculable Museum wrote: »

People just appear to want it not to be true.

I can tell you it’s not Nexo that is losing me money at the moment it’s my normal investments through leading organisations, that’s also all locked in not instantly withdrawable. As I said I’ve made multiple withdrawals, funds in my revolut account next working day.

Deposits are guaranteed by assets against them and an insurance policy that is quite clear.



All I can say it’s I’ve had money in there for over a year made multiple deposits and withdrawals and the interest appearing every day is not “too good to be true”. I’m going to move the majority of savings I have in cash in there bar a small amount I’ve decided. Only for I’ve other money tied up in traditional investments which I’ll be very lucky to get my own back in after 5 years I’d be putting in more.



It’s a much a Ponzi scheme as you local credit union. They pay high interest to encourage people to hold money so they can loan it out, quite simple really. Not sure what you mean by a referral system.

Just said I’d highlight this with such terrible interest rates in banks as people might be interested and to my surpise it’s not being talked about but it appears it’s all negativity.

It's being talked about negatively because it sounds too good to be true. You're nuts if you're going to put all your cash in it, have you heard of bitconnect? If not Google it. Then Google 'high yield investment programmes'

thenightman

thenightman wrote: »

When I googled Nexo, the first result was for a toilet. Says it all really!

No you didn’t.

StupidLikeAFox

Here is an example they gave here https://medium.com/nexo/getting-your-nexo-loan-in-three-easy-steps-f0d4bec5c7ea:

Loan Example
Let’s say you want to buy a $20,000 car and instead of selling your Bitcoin, you would like to use it for an instant crypto-backed loan from Nexo.
Loan Limit: $20,000 (available instantly, without credit checks)
Deposit Required: $40,000 (worth of BTC, which stays yours)
Interest: starts at 5.9% per year APR
Daily Interest: ~$4.44 (debited daily from your available credit limit)
No additional fees. No hidden charges. No installments.


This is a huge gamble. While not quite a Ponzi scheme in the normal sense, you are opening up a huge exposure to the price of bitcoin. There are no background checks for somebody getting a loan, you don't even have to upload an ID for some levels. Bitcoin has been volatile in the past - if there is a sharp reduction in the bitcoin price, people will stop repaying their loans (why pay back a $10k loan if the collateral you used is now only worth $5k?), the company has no funds coming in and worthless assets and all your money is gone.

No harm having a punt and it seems to have worked out well so far as long as you are aware that this is a gamble. Certainly not something you should put all your savings into imo

Grumpypants

Sounds a lot like the Bitconnect scam. High unsustainable interest rates. Leaving your Bitcoin on deposit with them etc.

It will work for a while and you might make your 10% but most likely it will collapse and take your deposit with it.

StupidLikeAFox

StupidLikeAFox wrote: »

Here is an example they gave here https://medium.com/nexo/getting-your-nexo-loan-in-three-easy-steps-f0d4bec5c7ea:

Loan Example
Let’s say you want to buy a $20,000 car and instead of selling your Bitcoin, you would like to use it for an instant crypto-backed loan from Nexo.
Loan Limit: $20,000 (available instantly, without credit checks)
Deposit Required: $40,000 (worth of BTC, which stays yours)
Interest: starts at 5.9% per year APR
Daily Interest: ~$4.44 (debited daily from your available credit limit)
No additional fees. No hidden charges. No installments.


This is a huge gamble. While not quite a Ponzi scheme in the normal sense, you are opening up a huge exposure to the price of bitcoin. There are no background checks for somebody getting a loan, you don't even have to upload an ID for some levels. Bitcoin has been volatile in the past - if there is a sharp reduction in the bitcoin price, people will stop repaying their loans (why pay back a $10k loan if the collateral you used is now only worth $5k?), the company has no funds coming in and worthless assets and all your money is gone.

No harm having a punt and it seems to have worked out well so far as long as you are aware that this is a gamble. Certainly not something you should put all your savings into imo

They have already gone though the massive boom bust cycle of bitcoin though without anyone losing deposits or the company going bust. Bitcoin dropped far more than in your example even.

Grumpypants wrote: »

Sounds a lot like the Bitconnect scam. High unsustainable interest rates. Leaving your Bitcoin on deposit with them etc.

It will work for a while and you might make your 10% but most likely it will collapse and take your deposit with it.

It’s nothing even remotely like bitconnet. For a start people who lost money in bitconnect lost because they owned the currency which lost its value. My money in Nexo is euro not in any crypto.

coylemj

Kamila Incalculable Museum wrote: »

They have already gone though the massive boom bust cycle of bitcoin though without anyone losing deposits or the company going bust. Bitcoin dropped far more than in your example even.

It's not a fall in the value of the security alone that will cause the house of cards to collapse, it's when the borrowers start to default en masse. Which is likely to happen when you get a lethal combination of a massive downturn in the global economy and a fall in the value of the security. If a large cohort of borrowers have a problem with their repayments and it dawns on them that their security is worth less than the outstanding debt, they will simply walk away and the company will collapse.

Jim2007

Kamila Incalculable Museum wrote: »

People just appear to want it not to be true.

And you seem to want it to be true to the point that you are willing to ignore the obvious.

Just a couple of small example:

- According to their site they lend at 5.9% and pay depositors 10%... so how do they make money? If they are doing this they’d run into the same issue as the banks with the tracker mortgages - loans are not matched to the source of finance.

- If they had a sure way of generating a 10% return why do the need to offer it to the general public? They could have a much simpler life to just offer it on a secondary market.

- They have a lot of verbiage on their site about regulations etc but no details actually being supervised as a financial institution, why?

I can tell you it’s not Nexo that is losing me money at the moment it’s my normal investments through leading organisations, that’s also all locked in not instantly withdrawable. As I said I’ve made multiple withdrawals, funds in my revolut account next working day.

Of course you did and in the best run schemes you would not expect any less, because this is what draws you in.

Deposits are guaranteed by assets against them and an insurance policy that is quite clear.

Obviously not clear enough.. deposits are not guaranteed, but loans have a 2:1 crypto backing. And they have NO insurance policy, which should not be surprising since they have no interest in the underlying deposits. A thirty party custodian has a blanket €100m policy which means you might get a couple of Cents to the Euro.

Just said I’d highlight this with such terrible interest rates in banks as people might be interested and to my surpise it’s not being talked about but it appears it’s all negativity.

Nobody pays you a rate of return beyond the odds unless you are taking on additional risk. With current rates below 1%, an offer at 10% would represent a substantial risk.

Jim2007

Kamila Incalculable Museum wrote: »

My money in Nexo is euro not in any crypto.

You have NO money in Nexo, that is how far off you are from understanding how this works. They need to be a licensed bank to accept deposits from the public. They are using BitGo as a custodian and the guarantee you have been on about covers digital assets (crypto) on deposit with them.

Jim2007

In the interest on being informative which was my intention with posting I will be sticking with the 8% interest as while I thought initially the 8 was being upped to 10% but in fact the extra 2% requires some additional steps that at this time are not of interest to me. I will still be going ahead with moving a nice chunk of cash over though as I had been planning it anyway and already initiated the first transfer last night actually.

People are entitled to their opinion and I know some are very risk averse (and afraid of anything new) but to be honest and I will say it again its the fairly "safe" regulated investments I'm in that are making me sweat, which have a lot more money riding than in nexo and even if they went as well as possible would do well match the interest made in nexo (on a lower amount). The reality is I will be happy with my money back on them due to the hit by corona.

Some people just hate that there are ways to make a bit more interest on their money it appears.

Jim2007 wrote: »

You have NO money in Nexo, that is how far off you are from understanding how this works. They need to be a licensed bank to accept deposits from the public. They are using BitGo as a custodian and the guarantee you have been on about covers digital assets (crypto) on deposit with them.

Firstly you dont need to be a bank to accept deposits, revolut is the proof of that. Secondly when you save money in nexo you transfer money into a swiss bank account in their name so yes I have money in Nexo.

Mr.S

Mr.S wrote: »

Most people are careful with money. Ask yourself why all of Ireland doesn't have their savings with Nexo and their 8% return? No bank comes close to that. If it was a clear cut as you say, why isn't everyone on it? This is not the worlds best kept secret.

The vast vast majority of poople have never heard of it for a start, people dont inserstand it and are afraid, not tech savy any number of reasons. I'm not advocating lumping all your money into it either but to me its worth a decent punt.

Mr.S wrote: »

and you want to risk all your cash savings on 8% return? That's absolutely crazy.

At the end of the day its your money.

8% is actually quite a good return, you are making it sound like its not. Also its not all my cash savings, its the savings I can easily get my hands on and would make up about 1/8 of my overall savings and investments nearly half of which is in a regulated investment though a major institution that if it matured today I would lose a significant amount - the very type of thing that would be considered being careful with your money.

It is my money and I've invested in traditional funds, I hold a number of crypto currencies, some punts on stocks, own land, hold money in nexo and have bank savings so I'm not afraid to go after a decent return and play around with my money.

Nexo are 4 years in business and have a parent company 13 years in existence they are not some smash and grab company that some are making them out to be.

Henry Ford III

Interest rates are on the floor. The banks are actually charging corporates to hold deposits in certain cases. It's not therefore much of a stretch to figure out that this isn't a deposit account in the normal sense.

8% is highly attractive in today's world. If it was that simple nobody would continue in traditional deposits.

Comes down to the old adage - risk and reward. This seems to offer a very high return so the downside should be equally obvious. It therefore has to carry very significant risk. There's no getting away from that.

In addition it's unregulated, and isn't authorized either.

Any positive return is subject to marginal rate tax, and if you lose there's no deposit protection.

Some people will always be lured in by snake oil salesmen.

codrulz

In no way is this an investment or savings vehicle, its a gamble on the creditworthiness of Nexo "borrowers" which by the very nature of their service will be poor and the price of bitcoin.

Withdrawals are instant... until one day they're not.

Sometimes the smartest financial decisions come down to where you are in life and not the nuts and bolts. Don't risk your housing deposit, the downside just isn't worth the few k you may make. If you really want a punt, go and buy 2k worth of TSLA options or something.

https://bit.ly/3e8S4HD

StupidLikeAFox

This reddit thread raises lots of unanswered questions if you scroll down through it: https://www.reddit.com/r/Nexo/comments/cjp6sx/due_diligence_on_nexo_red_flags/

Basically they are not a regulated financial company. V risky to be going near them.

Dodge

Kamila Incalculable Museum wrote: »

This move to 10% was the push I needed to move larger sums over to Nexo as it’s just free money (this is house deposit money etc that I don’t want locking into investments), 100 euro for every 1000 on deposit is a serious return for what is no risk from what I can see.

Really surprised I’m not seeing more people talking about it or using it.

Kamila Incalculable Museum wrote: »

As I said I’ve had a few k in there for over a year now constantly and I was also maxing my credit card into Revolut and transferring to Nexo for 50 days and then back out to pay off the credit and repeat so I’ve done loads of withdrawals also and they are very fast and smooth. This also maxed my cash back on the cc but has to stop as there is now a risk of the cc seeing Revolut as a cash advance which has high fees etc so not worth while.

Regardless of the investment, your financial behaviour in post two there will set massive alarm bells off when you go look for a mortgage with that house deposit

But then you own land and other assets so I’m sure you know what you’re doing...

Heres Johnny

Which regulator oversees this nox?

Joe Schmo

Just to add the insurance policy that exists between Lloyds and BitGo (where Nexo appears to hold their Bitcoin) covers digital assets. Any cash you deposit with them is not covered.

https://medium.com/nexo/nexo-is-the-only-crypto-lender-to-offer-crypto-custodian-insurance-83e3cc5bd378

One More Toy

codrulz wrote: »

In no way is this an investment or savings vehicle, its a gamble on the creditworthiness of Nexo "borrowers" which by the very nature of their service will be poor and the price of bitcoin.

Withdrawals are instant... until one day they're not.

Sometimes the smartest financial decisions come down to where you are in life and not the nuts and bolts. Don't risk your housing deposit, the downside just isn't worth the few k you may make. If you really want a punt, go and buy 2k worth of TSLA options or something.

https://bit.ly/3e8S4HD

You're telling a person who can't spot a ponzi scheme to start trading options?

codrulz

One More Toy wrote: »

You're telling a person who can't spot a ponzi scheme to start trading options?

Better he losses 2k and cops on, rather than lose his whole housing deposit.

One More Toy

codrulz wrote: »

Better he losses 2k and cops on, rather than lose his whole housing deposit.

Damn you got a point there

codrulz

codrulz wrote: »

Sometimes the smartest financial decisions come down to where you are in life and not the nuts and bolts. Don't risk your housing deposit, the downside just isn't worth the few k you may make. If you really want a punt, go and buy 2k worth of TSLA options or something.

https://bit.ly/3e8S4HD

I'm not new to this, I've been playing around with a lot more than 2k in cryptos and have had more than that in Nexo for over a year now also, ticking away making more money for me than multiples of the amount in traditional investments.

Dodge wrote: »

Regardless of the investment, your financial behaviour in post two there will set massive alarm bells off when you go look for a mortgage with that house deposit

It will be gone of my statement by the time I'd be applying, only need 6 months and even if it wasn't I'd have no issue explaining it, not a thing wrong with it bar being smart and earning interest on using the banks money. Also its small change playing around with the 2 or 3k limit on a cc.

One More Toy wrote: »

You're telling a person who can't spot a ponzi scheme to start trading options?

Your posts are very condescending, its not a ponzi scheme and I would easily spot one.

codrulz wrote: »

Better he losses 2k and cops on, rather than lose his whole housing deposit.

I have said a number of times it's not the full deposit, it's only a minority of it thats sitting in cash that I want instant access to but want to make a bit of money on while its sitting there. My fixed monthly savings amount also goes in there.

My point has been continually ignored that my normal regulated investments are the ones risking me losing money not savings held in nexo. Even my cryptos while down overall have been very stable and slightly up all though covid.

One More Toy

I'm not trying to be condescending. Look it seems like there's no talking you out of this at all so best of luck with it and I really hope you aren't back here in 12 months wiped out

Jim2007

Kamila Incalculable Museum wrote: »

Firstly you dont need to be a bank to accept deposits, revolut is the proof of that. Secondly when you save money in nexo you transfer money into a swiss bank account in their name so yes I have money in Nexo.

Revolut is a licensed bank. And if you are transferring money into a Swiss bank accounting in their name, then all the talk you had is about the guarantee goes out the window, since as I have already pointed out the only guarantee mentioned on their site is one for a third party custodian.