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Our Global Multi-Strategy portfolio launches – a modern approach in partnership with a hedge fund

Investing
We have launched a new portfolio – the Global Multi-Strategy.

We have launched a new portfolio – the Global Multi-Strategy – which has been built using a cutting-edge quantitative approach that we believe can navigate the uncertain years ahead. The portfolio’s primary aim is to generate returns across market regimes by combining multiple sub-strategies across styles and asset classes.

The Global Multi-Strategy portfolio has been designed in partnership with Second Foundation Partners, the publisher of Epsilon Theory and manager of a global macro hedge fund that utilizes their pioneering research. This research focuses on generating market-based returns by making trading decisions using natural language processing (NLP) analysis of financial news.

Together, we have built a sophisticated quantitative strategy, implemented via liquid ETFs, that Save’s Market Savings customers can choose for their next FDIC-insured deposit.

Approach

Whether markets go up, down, or sideways, sources of returns exist. Extracting those returns does not require you to personally have the right opinion about markets themselves; instead, what arguably matters most in the short to medium term is figuring out what everyone else thinks and what they, en masse, may do next.

As the poker saying goes, “you don’t just play the cards, you play the players”. The fundamentals of a company or sector (the cards) are important, but even more important is figuring out how other market participants (the players) will react to news and rumors about those fundamentals. 

For example, you might think (at the time of writing in December 2022) that stocks are still expensive and “should” fall further – and you could be right sometime in 2023 – but if the market decides otherwise in January (responding positively to, say, news about China re-opening or US jobs), then your investment portfolio may suffer.

This is the thinking that forms the basis of our new Global Multi-Strategy portfolio, designed in partnership with Second Foundation Partners and benefiting from a decade of quantitative research and development into how the themes and patterns found in financial media – called “narratives” – interact with financial markets and their participants.

Portfolio Composition

The portfolio contains 6 sub-strategies:

  1. Equity Beta
  2. Fixed Income
  3. Currencies
  4. Commodity Beta
  5. Commodity Relative Value*
  6. U.S. Equity Sectors Relative Value*
    *where “relative value” refers to a long-short approach that takes long positions in some preferred assets, versus short positions in some less favored assets, seeking to gain from the relative outperformance of the preferred assets.

Each sub-strategy utilizes a different set of trading signals, with the aim that by combining the different sub-strategies, the portfolio is potentially able to generate returns across all market environments.

Signal Calculation

Using both Big Data (millions of media articles and transcripts) and Big Compute (trillions of unstructured data operations), the strategy first analyzes the language across everything published in the English language about companies and markets:

Narrative maps, like the example below, are then produced and their evolution is analyzed. Each node on the map is an article, and the physical distance between any two articles indicates how linguistically similar or different those articles are.

A numerically large cluster of closely spaced nodes suggests a lot of focus on a given topic (say, inflation), and that those articles are largely in agreement in their assessment of that topic (let’s say, “inflation is high”). This also allows us to assess the stage in the life-cycle of the inflation theme, as well as its relative importance compared to other narratives, for example – is inflation currently emerging as an important topic grabbing a lot of new attention, or is its significance waning, giving way to ‘recession fears’ as the predominant topic?

Source: Second Foundation Partners

In other words, the mathematical operations search for specific narratives that spark specific investor behaviors in response. These behavioral  “triggers” are systematically evaluated daily and drive dozens of individual buy-and-sell signals across dozens of global assets. Once triggered, signals tend to have a persistent lifespan of the order of weeks.

These buy-and-sell signals are systematically rolled up into the 6 sub-strategies of the Global Multi-Strategy portfolio.

Current Signals (Dec 2022)

At the time of writing, the analysis suggests that: financial media believes inflation is declining, the outlook for interest rates is shifting toward easing (reducing), and a recession could be approaching; additionally, the analysis shows there has been significant recent bearish thinking, and that common knowledge of the bullish case for energy (relative to other sectors) has reached saturation, among other things.

Final Comment – Play the players

By expeditiously and accurately capturing the narrative states relevant to market participants (the players), and skillfully determining what those players might subsequently be predisposed to do next, a narrative-based approach can arguably trigger trading decisions faster, and with a greater success rate, than other traditional investment approaches that only consider fundamentals (the cards).

Subsequently, we believe the Global Multi-Strategy portfolio can deliver the return profile that our customers are looking for.

How to better align your social consciousness with Save’s ESG portfolio

InvestingSave Culture
To promote and participate in the restoration of forests, we are underwriting the planting of a tree for select ESG portfolio deposits.

In response to growing expectations that companies must show leadership in ESG, we have expanded our strategy offerings to include the Environmental, Social, and Governance (ESG) portfolio.

Assets in global sustainable funds were $2.24 trillion at the end of September, according to Morningstar Direct, and we are meeting this market opportunity with the first ESG-oriented savings program in the banking industry.

The newly-launched diversified ESG portfolio comprises iShares “ESG Aware” ETFs, that seek to select and overweight ESG companies and avoid certain non-ESG assets.

ESG stands for environmental, social, and governance. These three categories have certain standards for a company so investors can screen potential investments to align them with their beliefs.

  • The environmental standards consider how a company safeguards the environment, including corporate policies addressing climate change.
  • The social standards examine how a company manages relationships with employees, suppliers, customers, and the communities where it operates.
  • Lastly, the governance standards deal with a company’s leadership, executive pay, audits, internal controls, and shareholder rights.

We believe that responsibly-constructed portfolios should not only benefit the world, but also the investor, so our ESG portfolio utilizes the same sophisticated, rules-based investment techniques as the original Save Global Diversified Markets portfolios. Additionally, it maintains a similar global multi-asset class approach, while utilizing ESG-focused ETFs and avoiding investments in certain commodities like agriculture and livestock.

The ETFs that make up our ESG portfolio select companies deemed acceptable under specific environmental, social, and governance rules.

Additionally, limiting the effects of climate change is the responsibility of every industry, including banking. In addition to this new investment strategy, we support tree-planting projects in collaboration with Reforest’Action. To promote and participate in the restoration of forests, we are underwriting the planting of a tree for every $5,000 deposited in any Market Savings term, up to $50 million in deposits. This will plant about 50,000 trees in upstate New York. An initial photo from the planting site is below.

Forests are the world’s largest carbon sink and forest ecosystems support 80% of the world’s biodiversity. Planting trees has many benefits, including improving the climate, biodiversity, health, and employment. Our sponsored trees are in Cobleskill, NY on a former organic dairy farm. Chestnut, hazelnut, red oak, acadia, persimmon, and black walnut are the varieties of trees that will limit soil erosion and improve air and soil quality.

“Consumers are increasingly turning to ethical choices in all aspects of life including investments, and with no ESG savings accounts available in the banking market, we jumped at the opportunity to deliver this new kind of sustainable and responsible investment offer,” said Michael Nelskyla, Founder and CEO of Save. “We recognize that investors have a role to play in improving the human impact on major issues such as climate and Save sees it as our fiduciary responsibility to offer ethical investing through our Market Savings program for those consumers who seek these choices.”

The new ESG portfolio is available to customers through our Portfolio Recommendation tool during the Market Savings signup. Our Market Savings program is FDIC insured1 and currently earns 7.60%-9.24% APY2 depending on the program term. 


1 To obtain FDIC insurance coverage, customer funds provided will be deposited into non-interest-bearing accounts at Webster Bank. FDIC insurance coverage for funds deposited at Webster Bank is limited to not more than $250,000 per depositor, per FDIC-insured bank, per ownership category. Actual deposit insurance coverage may be lower if you have other funds deposited at Webster Bank, N.A. Customers are responsible for determining the amount deposited in each account at Webster Bank, N.A., and for monitoring the total amount of their deposits at Webster Bank, N.A., to determine the extent of available FDIC insurance coverage in accordance with FDIC rules. Learn more at: https://www.fdic.gov/deposit/deposits. Only the funds customers provide and deposit with Webster Bank, N.A., will be eligible for FDIC insurance. Webster Bank is not providing any investment advice or responsible for the purchase or performance of any investment contracts. The funds held in the Apex Clearing Corporation accounts are not FDIC-insured, are not bank guaranteed, and may lose value with a minimum return of zero. Maximum balance and transfer limits apply. Neither Save Advisers, LLC., nor its affiliates, are a bank. Apex Clearing Corporation is a member of the Securities Investor Protection Corporation (“SIPC”), formed by Congress to protect “customers” of broker-dealers and to promote public confidence in the U.S. securities markets. Customers of a SIPC Member that fails financially are afforded certain benefits under the Securities Investor Protection Act (“SIPA”). These benefits are relevant only if the broker-dealer that “carries” a customer’s account fails and is liquidated under SIPA. At Apex Clearing Corporation, your investments are protected by SIPC up to a maximum of $500,000 total, including $250,000 in cash balances. Coverage limitations apply. To learn more about SIPC coverage, visit the SIPC website at www.sipc.org.

2 APY, or annual percentage yield, is the yearly return on a bank or investment account. Save ‘Market Savings’ offers the potential to earn an APY with a variable rate (Variable APY). APY is derived from the investments made by Save on behalf of the customer within Save’s portfolio of strategies over the duration of term length selected by the customer. The Variable APY will never be less than the Minimum APY of 0% per annum but could be equal to the minimum APY of 0% per annum. The APY is equal to the cumulative return for the term selected on the applicable maturity date. Assuming a minimum APY of 0% per annum, if the APY applicable to a particular maturity date is less than or equal to the Minimum 0%, the customer will not receive any APY return for that investment upon maturity. Variable APY’s are subject to change at any time. APY is not guaranteed. The APY presented is hypothetical in nature and reflects the potential growth that could accrue if the investment is held for the entire term selected. Minimum deposit is $1,000. The deposit account portion of the Save Market Savings product and service is provided by Webster Bank, N.A., Member FDIC; and is non-interest bearing with a 0% APY. Management Fees associated with the investments may reduce earnings on the account. Customer withdrawal prior to maturity could result in additional associated costs.

Portfolio diversification: What is it and why does it matter?

InvestingFinance
Portfolio diversification is key.

Portfolio diversification is key. A balanced investment portfolio is made up of a variety of investments that work together to help you achieve your financial goals while reducing risk. 

For an individual investor, the more diverse their portfolio, the more protected they are from potential losses arising from market fluctuations. A portfolio that is too concentrated (for example, all invested in stocks) is subject to greater risk than one that spreads investments across different asset classes and geographic regions.  

At Save, we utilize quantitative techniques to determine relative asset preferences, carry out risk-based asset allocation, and apply volatility control overlays to ensure our portfolios are diversified and expected to perform. This approach provides your portfolio with much-needed stability and reduces the risks of extreme fluctuations in the value of your assets over time. 

An additional benefit of Save’s portfolios is that it isn’t your money that’s being invested. Your deposit is placed in an FDIC-insured account† with Webster Bank, N.A., Member FDIC, and it is never encumbered, collateralized, or put at risk in the market. There is no requirement for customers to outlay their own capital, nor do we fund it from customer accounts. 

Instead, we and our partners take the economic value of your deposits and invest on your behalf in your selected Save portfolio. 

Our Global Diversified Markets Portfolios – Conservative, Moderate, and Growth – are designed to fit your market risk tolerance.  

Each Global Diversified Markets Portfolio utilizes a sophisticated rules-based investment approach that captures returns across a wide range of asset classes and regions, seeking to maximize the consistency of returns. 

The portfolios invest across global equities, government and corporate bonds, inflation-protected bonds, real estate, gold, and the broad commodity universe (remember what we said above – diversification is key). 

In addition to diversification, our rules-based approach assesses the trend and risk of each asset on a daily basis, as well as their correlations, subsequently allocating more weight to the assets expected to outperform while maintaining a diversified portfolio – seeking to maintain a stable level of volatility and minimize drawdowns. In simpler terms, we watch our portfolios on a daily basis in order to ensure they perform as well as possible regardless of market conditions.  

Most recently, we’ve softly launched our Environmental, Social, and Governance (ESG) Portfolio, which caters to customers who want to align their investments with their environmental, social, and governance beliefs.  

The ESG Portfolio utilizes the same sophisticated, rules-based investment techniques as the original Global Diversified Markets Portfolios and maintains a similar global multi-asset class approach, while utilizing ESG-focused ETFs and avoiding investments in certain commodities like agriculture and livestock. 

Specifically, for index components that involve companies (rather than countries), such as equities and corporate bonds, the portfolio invests in iShares ESG Aware ETFs. These seek to provide similar risk and return as their respective broad market benchmarks, while only selecting companies deemed acceptable under the specific environmental, social, and governance rules. 

How to incorporate diversification yourself 

At a high level, diversification helps to reduce the overall volatility of a portfolio by reducing the impact of a single investment on your overall portfolio value.  

While there is no “right” or “wrong” way to build and maintain a diversified portfolio, there are several important things to consider when it comes to selecting and investing in the appropriate mix of securities to help you reach your investment goals, assuming you don’t go with one of Save’s daily-balanced portfolios. 

The following steps will help you build a sound – and diversified – investment strategy:  

  1. Analyze your financial situation to determine your goals (such as time horizon and target returns) and what types of investments can help you achieve them.  
    For example, if you need your investments to be more liquid and accessible at any time, then you might not want to put your money into Series I Bonds or long-term CDs because both come with penalty fees for withdrawing your money before maturity. 
  1. Once you have your goals defined, you can focus on building your strategy. First, look at the asset allocation (stocks and bonds are the basic types) you’re considering. Then read this investing advice from Forbes about how to diversify your investments. 
  1. Once you learn the ropes, maintain your strategy and perform regular reviews of your strategy to ensure it remains consistent with your objectives and risk tolerance level. Much like our portfolios, you must review where your money is and how it’s doing regularly and rebalance your portfolio as needed to maintain your desired asset allocation.  
    If manually doing this doesn’t sound like your cup of tea, consider robo-advisors, or Market Savings terms so that professionals are managing your portfolio for you. An additional benefit of Save portfolios, too, is that you’re not charged a fee if your portfolio doesn’t perform past the fee’s total of 0.35%.  

Why you shouldn’t risk your own money in the market for a 9% return 

Investing
Deposits in Market Savings are FDIC insured and the investments are made by Save on your behalf to generate a higher return on your principal. 

Deposits in Market Savings are FDIC insured2 and the investments are made by Save on your behalf to generate a higher return on your principal. 

The Market Savings program is a unique alternative to traditional saving and investing products thanks to the dynamic duo of FDIC insurance and market returns.  

There are several investment options for investors to choose from, including investing on your own, investing in CDs, bonds, Treasury Bills, fixed indexed annuities, etc. This article will reveal how the Market Savings program differs from these investing avenues.  

I could invest on my own 

Over the past 20 years (2001-2021), the average annual return on the S&P 500 is 9.87%, according to New York School of Business researcher Aswath Damodaran’s “Historical Returns on Stocks, Bonds, and Bills: 1928-2021.” While this is greater than the Market Savings 5-year term’s 9.33% APY,1 it isn’t FDIC insured. Market Savings deposits are FDIC insured up to $250,000 per depositor, per bank.2 

Therefore, it all depends on your personal return goals and your risk tolerance. A $1,000 investment in stocks might achieve a return higher than the Market Savings program, but if the equity market declines, you may lose a substantial part of your principal.  

With the Market Savings program, your deposit is FDIC-insured,2 your investments will utilize sophisticated investment approaches that allocate across several asset classes in seeking to provide stable returns over time, and dividends paid out by the ETFs in the portfolio are reinvested automatically. 

Even if your Save investment strategies could have periods with a negative performance, your deposit is secure.  

I could invest in the ETFs Save uses to avoid the management fee 

Once again, it depends on your personal return goals and your risk tolerance. With the Save Market Savings program, your deposit is FDIC-insured,2 and Save utilizes sophisticated investment approaches in order to provide substantial, reliable returns – making the most of the decades-worth of portfolio construction and financial product development experience across the Save team.  

These are the same academic approaches utilized by sophisticated hedge funds, pension funds, and insurance companies – delivered by the Market Savings program without intermediaries, and with a reasonable fee that is only charged if the investment portfolios perform.  

Direct investment in ETFs could provide greater or smaller returns with the risk that you could lose some of your original investment.  

Treasury Bills  

T-bills: It depends on your personal return goals and your risk tolerance. As described by the SEC, Treasury Bills “are considered one of the safest investments because they are backed by the full faith and credit of the U.S. government.” Hence, your investment is likely safe, but your returns are not likely to be particularly high.  

Series I savings bonds 

Inflation-proof Series I savings bonds are a great option for investors, especially now since the rate is 9.62% for the first six months. But there are some downsides. After the initial 6 months, though, the rate may fluctuate depending on economic conditions. Additionally, the program is limited to $10,000 per person and per married couple and carries penalties for early withdrawal before the 5-year maturity.  

Alternatively, the Market Savings program is capped at $250,000 per depositor because that is the maximum coverage FDIC insurance offers. While not as high at the 6-month bond rate, the APY for the 1-, 2-, and 5-year terms are 5.73%, 5.78%, and 9.35%.1  

CDs and market-linked CDs 

A CD may also be an FDIC-insured option that pays a fixed rate and, in some cases, a market-linked return (market-linked CDs), but the Market Savings program offers APYs significantly higher than fixed-rate CDs.1  

The Market Savings program also yields higher potential APYs than market-linked CDs because we use our proprietary investment strategies and don’t charge commissions or fees beyond our management fee.1  

Some CDs also carry a significant unwind penalty that diminishes the overall product return compared to the Market Savings program.  

Fixed Indexed Annuity 

The Market Savings program is very similar to a Fixed Indexed Annuity, except for a couple of things, which are listed in the chart below.  

Features Market Savings Fixed Indexed Annuity 
FDIC Insured Yes No 
Term Length 1-, 2-, and 5-years  Usually >5 years  
Fees Charged  Save charges a 0.35% fee only when there is a return above 0.35%.  Fees up to 5% upfront 
Tax efficient investments Yes Yes 

The safety of your money is just as important as the return they generate. If you’re looking for an account with high-growth potential without a risk to your principle, consider Market Savings. Learn more about the perks of banking with Save here.   

1 Generally, an APY (or annual percentage yield) is the yearly return on a bank or investment account. Save Market Savings is a hybrid product and service that includes deposit account linked to an investment product. The deposit account portion of the Save Market Savings product and service is provided by Webster Bank, N.A., Member FDIC; and is non-interest bearing with a 0% APY. The investment portion of the Save Market Savings product and service offers the potential to earn an APY with a variable rate (Variable APY).  The Variable APY, if any, is derived from the investments made by Save on behalf of the customer within Save’s portfolio of strategies over the duration of term length selected by the customer.  The Variable APY, if any, will be equal to the cumulative return for the investments selected for you by Save for the term selected on the applicable maturity date. The Variable APY may be 0% but will never be less than the Minimum Variable APY of 0% per annum.  Assuming a minimum Variable APY of 0% per annum, if the Variable APY applicable to a particular maturity date is less than or equal to the Minimum 0%, the customer will not receive any Variable APY return for that investment upon maturity.  Variable APY’s are subject to change at any time.  Variable APY is not guaranteed.  The Variable APY presented is hypothetical in nature and reflects the potential growth that could accrue if the investment is held for the entire term selected.  Variable APY’s are based on hypothetical back-tested performance in the Save Moderate Portfolio from 2006 to present and are shown net of fees. Hypothetical back-tested performance is no guarantee of future performance and actual results will vary. For more detailed information please see Hypothetical Back-testing. The minimum deposit amount is $1,000 for the 1-year term and $5,000 for the 2-year and 5-year term. Deposits are FDIC-insured up to the maximum allowed by law, $250,000 per depositor, per bank. Management Fees associated with the investments may reduce earnings on the account. Customer withdrawal prior to maturity could result in additional associated costs. 

2 To obtain FDIC insurance coverage, customer funds provided will be deposited into non-interest-bearing accounts at Webster Bank. FDIC insurance coverage for funds deposited at Webster Bank is limited to not more than $250,000 per depositor, per FDIC-insured bank, per ownership category. Actual deposit insurance coverage may be lower if you have other funds deposited at Webster Bank, N.A.. Customers are responsible for determining the amount deposited in each account at Webster Bank, N.A., and for monitoring the total amount of their deposits at Webster Bank, N.A., to determine the extent of available FDIC insurance coverage in accordance with FDIC rules. Learn more at: https://www.fdic.gov/deposit/deposits. Only the funds customers provide and deposit with Webster Bank, N.A. will be eligible for FDIC insurance. Webster Bank is not providing any investment advice or responsible for the purchase or performance of any investment contracts. The funds held in the Apex Clearing Corporation accounts are not FDIC-insured, are not bank guaranteed, and may lose value with a minimum return of zero. Maximum balance and transfer limits apply. Neither Save Advisers, LLC, nor its affiliates, are a bank. Apex Clearing Corporation is a member of the Securities Investor Protection Corporation (“SIPC”), formed by Congress to protect “customers” of broker-dealers and to promote public confidence in the U.S. securities markets. Customers of a SIPC Member that fails financially are afforded certain benefits under the Securities Investor Protection Act (“SIPA”). These benefits are relevant only if the broker-dealer that “carries” a customer’s account fails and is liquidated under SIPA. At Apex Clearing Corporation, your investments are protected by SIPC up to a maximum of $500,000 total, including $250,000 in cash balances. Coverage limitations apply. To learn more about SIPC coverage, visit the SIPC website at www.sipc.org.  

4 ways financial literacy is built with Save

Finance
Woman biking with children

This is how the Market Savings terms can teach financial literacy and save you money.

The significance of five years is extremely relative. The five years until your middle-schooler leaves for college seems like a lifetime away, but it flies by in an instant. 

Let’s say you put $5,000 in a 5-year Save® Market Savings term in the summer before your child’s 8th-grade year, then you make an additional $5,000 deposit for a 2-year term the summer before they started their junior year in high school.

Where most savings accounts would earn less than 3% in interest, the Market Savings 5-year term’s 9.35% average annual return and 2-year term’s 5.78% average annual return* potentially could earn the following return when they graduate:

YearFDIC-insured deposit amount and term length**Average annual return per term*Potential annual gains
8th grade$5,000, 5-year term9.35%$467
9th grade9.35%$467
10th grade9.35%$467
11th grade$5,000, 2- year term9.35%, 5.78%$467 + $289
Graduation9.35%, 5.78%$467 + $289
Total$10,000$2,913

At the end of the terms, your child’s Market Savings program could mature to $12,913 at the time of their graduation. Not only this, you can get a jump on teaching your child about financial literacy by utilizing the Market Savings terms.

According to Investopedia, financial literacy is “the ability to understand and effectively use various financial skills, including personal financial management, budgeting, and investing.” 

As the pandemic has proved, it’s important to establish monetary security, adaptability, and backup plans in the face of unexpected crises. But according to a study conducted by the FINRA Investor Education Foundation, less than 35% of Americans can be considered financially literate. 

The drastic effects of this statistic are illustrated by the US Federal Reserve, which revealed from a survey from July 2020 to May 2021 that a $400 emergency would be difficult to cover for 35% of Americans. Unfortunately, many adults faced this reality in the wake of the pandemic, but utilizing financial tools like the Market Savings program can help ease financial surprises.

How can Save build a foundation of financial literacy?

Only 23 states require financial literacy classes in high school, and 25 states don’t even require economics. Unsurprisingly, one in three students failed the National Financial Educators Council’s Financial Foundation Test in 2021. When considering our children’s financial education, it’s important to implement financial literacy in their everyday life.

The Market Savings program offers the perfect introduction for your child to practice money management before going off on their own. 

Here are four lessons the Market Savings program can offer your child:

  1. Insurance

    Insurance provides stability and security in the face of uncertainty. While developing a foundation of financial literacy, your children will come to understand that protecting their money is crucial as well.

    Deposits into the Market Savings program are FDIC insured up to the maximum amount the law allows, meaning you are guaranteed security of your initial deposit up to $250,000.** In other words, while your child engages with their account to learn how the stock market works, they’re not actually risking their deposit in the stock market.
  2. Budgeting

    Financial planning skills are the root of financial literacy. After all, before you can maximize your wealth potential by investing, you have to have money to invest.

    By empowering your child with their own Market Savings program, you allow them to practice essential financial-planning skills like budgeting. Introduce them to basic concepts like the 50/30/20 rule, in which budgeters allocate 50% of their income to necessities, 30% to their wants, and 20% to financial goals.

    Review the budget together monthly to discuss how much they save, how often they withdraw, and how it aligns with their goals. By giving kids the opportunity to manage assets early on, you provide the security of your own experience and knowledge to help them navigate their financial future.
  1. Understanding Market Access

    Remember when I said, “before you can maximize your wealth potential by investing, you have to have money to invest”? This is true, but the Market Savings program gives customers market access with a bit more security.

    Save invests in a diversified portfolio on the behalf of customers based on their deposits. This is done at no risk to your funds thanks to the FDIC insurance protecting your Market Savings initial deposit.**

    The Market Savings program has three terms that generate three potential returns. With average returns of 5.73% for 1-year terms up to 9.35% for 5-year terms,* the longer your money stays in your account, the higher your annual return.

    At the end of the term, you receive a direct deposit with the gains from the investment’s returns (not the investments themselves), minus Save’s 0.35% management fee. If your returns are less than 0.35%, you aren’t charged a fee. Save provides customers market access, customers collect the returns, while their initial deposits remain FDIC insured.**

    By using the Market Savings program to build financial literacy, you also prime your kid to be a successful participant in the stock market. Financial literacy leads to portfolio diversification, which leads to better returns. And while your child builds this foundational knowledge, Save maximizes their money’s potential in the meantime by investing on their behalf. 
  2. Inflation

    Inflation can be confusing, but it’s a fact of life: your dollar is worth drastically more today than it will be when your child is an adult. Luckily, the Market Savings program can buffer inflation’s diminishing effect on your child’s money with returns up to 9.35%.* 

    As the Federal Reserve aims to keep inflation around 2% yearly, even the shortest Market Savings term can combat the effects of inflation. The 1-year term’s 5.73% return* still vastly outperforms the average savings account, which only returns about 0.13%

    No matter what term you go for, the Market Savings program can help cover the cost of inflation. To top it off, all deposits are FDIC insured,** and if you don’t make money, Save doesn’t charge a fee. It’s a conservative way to allow your kid to participate in the market, observe inflation’s effects, and potentially reap 9.35% returns.*

Beyond that, the foundational knowledge they’ve built is invaluable. We should never stop improving our financial literacy, and your family can start with Save’s new Market Savings terms today.

* Average annual returns reflect the most recent deposit rates and are based on hypothetical back-tested performance in the Save Moderate Portfolio from 2006 to present and are shown net of fees. Hypothetical back-tested performance is no guarantee of future performance and actual results will vary. Returns are subject to change daily. For client accounts, the average annual return percentage calculated across the full term length of investment will never reflect returns of less than 0%. Calculations of average annual returns based on hypothetical back-tested performance across any term length of investment of one (1) year or greater are based on an assumption of sequential reinvestment of the principal and any returns of each such security into a new hypothetical strategy-linked security effective on the maturity date of the predecessor security. All return figures shown are for informational purposes only and are not actual customer returns. For more detailed information please see https://joinsave.com/hb-moderate 

**To obtain FDIC insurance coverage, customer funds provided will be deposited into non-interest-bearing accounts at Webster Bank. FDIC insurance coverage for funds deposited at Webster Bank is limited to not more than $250,000 per depositor, per FDIC-insured bank, per ownership category. Actual deposit insurance coverage may be lower if you have other funds deposited at Webster Bank, N.A.. Customers are responsible for determining the amount deposited in each account at Webster Bank, N.A., and for monitoring the total amount of their deposits at Webster Bank, N.A., to determine the extent of available FDIC insurance coverage in accordance with FDIC rules. Learn more at: https://www.fdic.gov/deposit/deposits. Only the funds customers provide and deposit with Webster Bank, N.A. will be eligible for FDIC insurance. Webster Bank is not providing any investment advice or responsible for the purchase or performance of any investment contracts. The funds held in the Apex Clearing Corporation accounts are not FDIC-insured, are not bank guaranteed, and may lose value with a minimum return of zero. Maximum balance and transfer limits apply. Neither Save Advisers, LLC, nor its affiliates, are a bank. Apex Clearing Corporation is a member of the Securities Investor Protection Corporation (“SIPC”), formed by Congress to protect “customers” of broker-dealers and to promote public confidence in the U.S. securities markets. Customers of a SIPC Member that fails financially are afforded certain benefits under the Securities Investor Protection Act (“SIPA”). These benefits are relevant only if the broker-dealer that “carries” a customer’s account fails and is liquidated under SIPA. At Apex Clearing Corporation, your investments are protected by SIPC up to a maximum of $500,000 total, including $250,000 in cash balances. Coverage limitations apply. To learn more about SIPC coverage, visit the SIPC website at http://www.sipc.org.

Following the Rule of 72, potentially double your Market Savings deposit in less than 8 years

InvestingFinance
Rule of 72 shows you should double your deposit in 8 years

How long does it take an investment to double in value? Meet the Rule of 72. This is a simplified equation used to estimate the number of years an investment may take to double at a given annual rate of return.

The Rule of 72 states that you can get an estimate of how long a sum of money will take to double by dividing 72 by the rate of return: 

72 / (annual return) = (years for principal to double) 

An example: An investment with a 9% annual return, means your money should double every 8 years.  

The Rule of 72*

YEARS 9% 
$10,000 
$19,926  
16 $39,703
24 $79,111   
32 $157,633 
40 $314,094 

We believe savings accounts should give you that kind of return, not just risking your money in the market, thus why we created the Market Savings program, which combines the safety of an FDIC-insured bank account with the return potential from investing in the market.  

The core investment philosophy of Save is to generate stable returns on savings or deposit instruments and other cash accounts using market investments that do not require any customer outlay of capital but, rather, utilize the economic value of that cash or cash transactions as its principal. 

That economic value could be due to interest that the customer forgoes or savings in fees that would have otherwise been paid directly or indirectly on customers’ transactions. Those external revenues to the customers’ savings/spending are used to finance the investment and ensure it doesn’t lose value.  

Save can achieve such high return potential1 by investing on your behalf in a diversified market portfolio based on your risk preferences. While typical investments in the market can be risky, your Market Savings deposits are FDIC-insured2, meaning 100% of it is protected to the maximum allowed by law.  

That’s what makes it so unique — you get the security of a bank account and the earning potential of an investment portfolio. Maximizing your current savings account’s earning potential will help you build wealth faster. 

The chart below breaks down the Rule of 72 for other return rates compared to the Market Savings program’s 9% average annual return:1 

Rule of 72 Rate Comparison*

YEARS 1% 3% 9% 
$10,000   $10,000   $10,000  
$10,829   $12,668   $19,926  
16 $11,726   $16,047   $39,703  
24 $12,697   $20,328   $79,111  
32 $13,749   $25,751   $157,633  
40 $14,889   $32,620   $314,094 

Your choice: 24 years with traditional savings accounts or a little over 8 with the FDIC-insured 5-year Market Savings term.  

To get an even more accurate comparison with interest rates that fall outside of 6-10%, the Rule of 72 changes. In these cases, you can utilize this compound interest calculator from the SEC to calculate how much your money can grow. 

* This table serves as a demonstration of how the Rule of 72 concept works from a mathematical standpoint. It is not intended to represent an investment. The chart uses constant rates of return, unlike actual investments which will fluctuate in value. It does not include fees or taxes, which would lower performance. It is unlikely that an investment would grow 10% or greater on a consistent basis. 

1 Average annual returns reflect the most recent deposit rates and are based on hypothetical back-tested performance in the Save Moderate Portfolio from 2006 to present and are shown net of fees. Hypothetical back-tested performance is no guarantee of future performance and actual results will vary. Returns are subject to change daily. For client accounts, the average annual return percentage calculated across the full term length of investment will never reflect returns of less than 0%. Calculations of average annual returns based on hypothetical back-tested performance across any term length of investment of one (1) year or greater are based on an assumption of sequential reinvestment of the principal and any returns of each such security into a new hypothetical strategy-linked security effective on the maturity date of the predecessor security. All return figures shown are for informational purposes only and are not actual customer returns. For more detailed information please see https://joinsave.com/hb-moderate.

2 To obtain FDIC insurance coverage, customer funds provided will be deposited into non-interest-bearing accounts at Webster Bank. FDIC insurance coverage for funds deposited at Webster Bank is limited to not more than $250,000 per depositor, per FDIC-insured bank, per ownership category. Actual deposit insurance coverage may be lower if you have other funds deposited at Webster Bank, N.A. Customers are responsible for determining the amount deposited in each account at Webster Bank, N.A., and for monitoring the total amount of their deposits at Webster Bank, N.A., to determine the extent of available FDIC insurance coverage in accordance with FDIC rules. Learn more at: https://www.fdic.gov/deposit/deposits. Only the funds customers provide and deposit with Webster Bank, N.A. will be eligible for FDIC insurance.  Webster Bank is not providing any investment advice or responsible for the purchase or performance of any investment contracts. The funds held in the Apex Clearing Corporation accounts are not FDIC-insured, are not bank guaranteed, and may lose value with a minimum return of zero. Maximum balance and transfer limits apply. Neither Save Advisers, LLC, nor its affiliates, are a bank. Apex Clearing Corporation is a member of the Securities Investor Protection Corporation (“SIPC”), formed by Congress to protect “customers” of broker-dealers and to promote public confidence in the U.S. securities markets. Customers of a SIPC Member that fails financially are afforded certain benefits under the Securities Investor Protection Act (“SIPA”). These benefits are relevant only if the broker-dealer that “carries” a customer’s account fails and is liquidated under SIPA. At Apex Clearing Corporation, your investments are protected by SIPC up to a maximum of $500,000 total, including $250,000 in cash balances. Coverage limitations apply. To learn more about SIPC coverage, visit the SIPC website at www.sipc.org. 

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