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American Entrepreneurial Spirit combined with a Nordic Safety Net: How Save® Built a Distinctive Company Culture

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Save® was founded with an important mission: to help people earn a higher yield on their savings.  We are fundamentally changing how things are done in the world of finance in a way that puts the customer first. We are reimagining the concepts of risk and reward for everyday people who want to save money. We are putting more money into the pockets of people who have been short-changed, overcharged and under-rewarded by the financial system.

Our company DNA combines the best of America and Finland. Two different places with different cultures and ways of doing business. But we believe that Save can combine the best of two worlds: the Nordic model of our Founder and CEO Michael’s homeland of Finland, with its approach of pragmatic solutions and mitigation of risk, combined with our Houston, Texas-based team led by our COO Adam Watts with its entrepreneurial dynamism and American optimism.

We want people to have a safety net for their savings and be able to capitalize on the entrepreneurial upside of market investments.

Here are a few reasons why we believe the Save® company culture will be a winning combination for your savings.

Re-thinking the Concept of “Risk Capital” for Savings

One of the first principles of investing is “Risk and Reward.” If you are willing to take more risk with your money, you should be rewarded for it with higher returns. If you are not willing to put your money at risk, you should be willing to settle for lower but steady returns.

In the current low-interest rate environment, we’ve ended up with a situation where bank accounts are paying near-zero interest. If customers aren’t satisfied with earning no yield on their cash savings, they have to take risks in the markets.

We believe we’ve found a solution for conservative investors or savers who need stable yields but without putting their cash deposits at risk. We give you the American-style entrepreneurial upside of smooth, steady market returns combined with the Nordic-style safety net of avoiding the risk of investment loss. 

Putting the Customer Back at the Center of the Business Relationship

Too often in the world of finance, customers – especially everyday savers with simple bank accounts – are treated almost as an afterthought. Money talks, and if you’re just an average American with 3 months of savings in the bank, most banks aren’t listening to you.

At Save®, we have aggressively reimagined the relationship between savers and the banks that host their savings accounts. We are genuinely putting the customer first. Everything we do is focused on, “how can we cut costs for the customer, how can we pass those cost savings on to the customer, how can we enlist the customer as a partner in helping to boost their own yields on their savings?”

Everything we do at Save is focused on giving value back to the customer. We have developed pragmatic, fair customer-centered solutions that provide a better value for all while also being proactively innovative in redesigning the way our industry works.

The Safety Net: FDIC Insurance

Every Save® account is connected with a FDIC-insured bank account. Your deposits are never at risk. We only invest the interest on your deposits, so no matter what happens with the ups and downs of the markets, your initial deposit is never at risk for investment loss. 

The Upside: Market Investments

Instead of settling for near-zero interest rates, Save gives you the upside of market investments. We invest the interest on your deposits in a diversified, tech-optimized investment portfolio that includes cash equivalents, stocks, bonds, commodities and real estate exchange traded funds (ETFs).  Portfolios are rebalanced daily and selected to protect your money from loss while generating stable returns that are potentially higher than any high-yield savings account, CD or bond index fund.

We are bringing the benefits of financial technology that previously might have been used only by big institutional investors, and we are making it available to everyday people with a savings account.

The world’s first Debit Invest Card

The Save Debit Invest Card uses our portfolio technology to reward our customers for everyday debit card spending. For every dollar of signature spend with your Save card, we’ll give you a dollar of equivalent portfolio investments. This is the world’s first debit card that boosts people’s saving power on a dollar for dollar basis.

Instead of other rewards cards that encourage people to spend more money or cash in their reward points for gifts that they might not really need, the Save Debit Invest Card is a dose of Nordic-style pragmatism: whenever you spend money, we’ll help you boost your savings.

The Save Debit Invest Card can add significant growth potential to your savings account by letting people participate in the upside of market returns without having to invest any more money, take any risks, or otherwise change their behavior as savers and investors. Depending on how much you spend and how the overall markets perform each year, your savings account might outperform the stock market.

Combining the debit card with the savings account makes for a very compelling way to save without risk.

Safe but also engaging

Most bank products are unexciting and deliver little. Put in your money; earn near-zero yields. There’s safety but no upside.  Most market investments are not safe. Invest your money and you might experience short-term volatility, you might lose your investment, you might lose money that you can’t afford to lose. There’s upside but no safety.

Save is something new and different. It’s safe and engaging – you can keep your money safe while still participating in the markets. The same process you would use for opening a simple bank account can now be used to get your money working for you. None of your cash has to sit on the sidelines now. And you get regular notifications and can watch your portfolio grow through the Save app and dashboard with daily portfolio updates.

A Safety Net That Optimizes Your Upside and is Fair on Fees

Too often in financial services, the financial gains of customers’ investment money are not fully returned to customers. Too many customers are getting short-changed by high fees, underperforming advisers, and opaque arrangements. Think about a typical bank customer that earns near-zero interest on their savings while paying monthly fees and high interest on credit cards. Think of all the financial advisers that charge 2% fees per year, whether they make money or not. 

Save offers no-risk investments but also doesn’t charge any fees if there isn’t any return in the portfolios. This means we are fully aligned with our customers. We thrive only when there is strong performance, and our customers are happy. We believe that it’s the right thing to do and it’s also ultimately better for our business: because we want our customers to stay with us and keep growing their savings for years to come.

Whether you’re from Texas or Finland or anywhere else in the world, we believe that Save is a compelling new way to help you earn higher yields on your savings while avoiding the risks, costs and downsides of other types of investments and savings accounts. If you want to get the best of both worlds, with Nordic-style safety and Texas-style dynamism, sign up for a Save account today.

Learn more and sign up for an account today at joinsave.com 

Managing Risks for Steady Returns: The Save Portfolio Strategy

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Save is offering something that is different than a typical savings account: we give your deposits the safety of FDIC insurance while we invest the interest or give you debit card rewards in the form of a diversified portfolio of investments, backed by sophisticated strategies and financial technology. The goal is to deliver a stable investment return that is significantly higher than any bank savings account. So how do we do it? How does the Save portfolio strategy work, and what can you expect us to do in managing your money for the optimal balance of risk-management and positive market returns?

Whether you’re an experienced investor or just getting started with learning about the stock market, we believe that sharing more information with you about the Save strategy and the way we manage your investments with attention to risk management and delivering stable returns will give you confidence in keeping your money with us.

Save is using portfolio strategies and similar technology solutions that have already been used for many years by institutional investors, such as pension funds and insurance companies. Indeed, most large institutions that need to achieve steady, stable returns to earn income for their customers have been utilizing these types of strategies and tools. What Save is doing is democratizing these strategies: we are bringing the same types of financial planning and portfolio design methodologies that institutional investors use, along with our advanced financial technologies, to help everyday people earn higher yields on their savings.  

We talked with Sid Browne, Ph.D., Chief Investment Officer of Save, about how the Save portfolio strategy works, how our portfolios are designed, and what it means for how we manage your money.

Finding a Better Balance of Risk and Reward

One of the fundamental concepts about investing is the idea of earning a risk premium. Investors are supposed to get rewarded over time for taking on certain economic risks that other folks don’t want to take. Risks don’t always pay off; for example, not every individual stock or exchange traded fund (ETF) always goes up in price. But over the long run, with a disciplined approach and a thoughtful strategy, investors mostly should expect to earn some upside return in exchange for investing in riskier assets.

When investors are risk-averse, or have a shorter time horizon, they often look to the world of fixed income, such as U.S. Treasury bonds or money market/cash equivalents. These are considered “safe” assets, where investors are guaranteed to earn a certain fixed rate of return, but that return (especially in today’s near-zero interest rate environment) might be very low.

The proper risk and reward balance is something that every investor must strike individually. The Save portfolio strategy is focused on this concept: is the upside potential good enough for the risk that you are taking? Save has designed a sophisticated portfolio that is diversified across asset classes(stocks, bonds, cash equivalents, some commodities, some real estate ETFs) and is also diversified across the risk spectrum.

Save does not just “buy and hold” a portfolio for an entire year; we try to be active “risk managers” of your investment dollars. We make ongoing adjustments, backed by advanced financial technology, to make the right moves at the right moments, to put your money into the right blend of assets to minimize your risks and create a steady, stable return relative to the  equity market itself.

Our portfolio is not designed to take excessive risks. We are not attempting to earn maximum yields. We are trying to minimize the ups and downs and protect against excessive volatility. We are trying to deliver consistent, steady results. To use a baseball metaphor: sometimes batters try to hit home runs every time, but they also strike out a lot. We are not trying to hit home runs. We are trying to hit consistent singles.

Identifying the Good Risks, “Winners” and “Losers”

There are three components that Save uses in building our portfolio:

  1. Choose Investments with a Good individual Risk-Reward trade-offs: We don’t just analyze investments based on price, we analyze based on risk and estimate how volatile these investments are likely to be. For example, if you have $100 to invest and are trying to choose among 10 different investments that have a price of $10 each but some of them are likely to lose or gain $5 and some are likely to lose or gain $1, you wouldn’t put $10 into each of the 10 investments but would balance the investments to manage the risks while still capturing some upside. To properly balance those different risks, one needs to invest less in the riskier assets while increasing the investment in the lower risk assets. We do that at Save in a scientific and systematic fashion.
  1. Buy “Winners,” Avoid “Losers;” Choosing Investments Based on Positive Trends: We have built a filter based on the concept of “Trend Following”  into our technology that helps us analyze investments based on how they are trending: are these investments going up or down in price? We try to buy “winners” (investments that are trending upward) and avoid “losers” (investments that are trending down). We want to capture some of that positive momentum and be on board for a rising tide. Based on our analysis, if an investment does not have a positive trend signal, we reduce our investment in it at that time and only increase our investment when we have strong evidence that it has a high probability of gaining positive returns. Our research has shown that reducing the size of losing trades from the portfolio is a key component at increasing the compounding rate, which is the goal of long-term investing.
  1. “Dial It Up or Down” Based on Volatility: The Save portfolio is also built to manage periods of ongoing market volatility. We are trying to deliver stable, smooth compounding returns to our customers. But, obviously, as anyone who has lived through 2008 and 2020 can tell you, the markets are rarely stable and smooth! We have designed the portfolio to target a particular level of market volatility that we are willing to accept in order to try to earn the appropriate risk premium, and we dial up or dial down the portfolio’s risk exposure based on our overall risk assessment of the general market volatility.

Think of the Save portfolio as being a radio with a dial on it: we can “turn up the volume” or “turn down the volume” based on changing market conditions. We want the portfolio to have a constant level of risk exposure to manage volatility. We don’t want our portfolio to go up and down as wildly as the broader markets, but we do want to capitalize on opportunities in ways that make sense for our investment strategy when the markets are more or less volatile.

In times of greater assessed market risk, we reduce our portfolio’s exposure to the stock market. But, at times of lower risk, when we want to get higher returns and the opportunity is right, we can increase our portfolio’s exposure to the stock market. We are constantly shrinking or expanding our asset allocations, with the goal of keeping our portfolio’s volatility within a constant range. We want to put a bit more money into certain assets at certain times and shift money away from other assets at other times with the goal of generating those smooth, stable returns while managing risks. We can “dial it up” or “dial it down” at any time in a tax-efficient manner.   

Adapting to Changing Conditions

As our customers’ fiduciary savings adviser, Save is not “risk seeking.” We intend to generate smooth, steady returns on our customers’ savings. We are not overly ambitious with our growth targets and risk tolerances. And we constantly readjust our positions based on changing market conditions.  

We don’t just set up a portfolio on Day 1 of the yearlong investment period and then leave it alone for a year. The portfolio changes dynamically day to day in order to achieve our target exposures and volatility. The portfolio is constantly traded to try to put the right amounts of money into the right investments to keep earning returns and managing risks for our customers during the course of each 1-year investment period. 

Some people might say: “Why do I need Save? Why can’t I build my own diversified portfolio, manage it myself, and try to get the same return?”

We believe that our financial technology can deliver something that no individual investor can accomplish for themselves: managing risks in this tightly controlled, disciplined way while generating a smooth, steady return with tax-free rebalances. As an example, since our portfolios rebalance daily, this means we would do 30 trades a day or 7560 trades per customer account per year, at least.  This is very hard to accomplish by an individual and there is a likelihood returns may be eroded due to trading costs or other inefficiencies.

Save is giving our customers access to a sophisticated type of risk management and active investment management that is difficult to create or replicate for themselves. Until now, this type of technology has been available for the institutional investor world – such as pensions, or insurance companies. Save is now offering it to individual savers for the first time ever. 

Offloading Risks: Guaranteed Deposits, Protection Against Losses

Another component of the Save portfolio strategy is that we completely protect our customers against risk of loss of their initial investment. Even if the markets perform poorly and the portfolio does not deliver a return over the course of an entire year, Save customers are always guaranteed to keep 100% of their cash deposits, which are FDIC-insured to the full limits of the law.

Save customers can withdraw their deposits without penalty at any time during the 1-year investment period, but if you want to earn a return, we ask you to leave your money with us for the full year. Why? Because there is a cost that Save has to pay upfront to purchase your investments. Part of that cost is related to the way that we manage your risks to protect you against losses. 

This is another technique from the world of institutional investing that we are making available to individual savers: offloading of risk. We build a portfolio for our customers, and then we purchase a security on that portfolio from our bank partners that tracks the upside of the portfolio on a one-for-one basis We invest only the interest in this security and never touch the initial capital, which is in an FDIC insured account.

What does this mean for your savings? Even if the Save portfolio does not deliver a market return, our customers will always be protected against the risk of loss. Your deposits are always safe and FDIC-insured, and your investments are managed in a way that protects you from any losses no matter what happens in the markets. 

In spite of our advanced technology, the Save portfolio strategy is ultimately Old Fashioned tried and true Finance 101: we want to minimize risk in order to maximize the compounding rate, which is the key to building wealth over time. We do it by tilting exposures to investments that have a higher probability of gains while tilting exposures away from investments that have a lower probability.  All the while, we do this in a risk-diversified manner, targeting volatility over time(and dialing the portfolio’s exposure up or down as needed) and protecting our customers against losses by transferring risk away from our customers .

Save is transforming the idea of “risk of loss” in investing. When you put your money into a Save Market Savings account or use our Debit Invest Card, you agree to give up the guaranteed (low) interest that you would earn from a conventional bank account, and we transform that interest income into risk capital that can actually be invested to generate a return. But only the interest on your deposits, not your deposits themselves, is ever at risk.

We believe that Save has developed a one-of-a-kind solution that can help savers achieve significant yields on their savings, while enjoying the full safety of FDIC insurance. Save’s portfolio strategy is not about getting rich quick; it’s not about maximizing growth; it’s about delivering smooth, steady returns while managing the customer’s risks while protecting the customer against any possibility of loss. 

Ready to join Save? Sign up for your Save account today.

Record High Personal Saving Demands, Near-Zero Yields: Americans Need a Better Way to Save

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The COVID-19 crisis has reminded every American of the importance of having some cash savings in the bank. Millions of Americans are more worried than ever about their financial future and are scrambling to save more money. But what if those bank savings accounts aren’t paying any interest? What are savers supposed to do if saving doesn’t pay?

According to recent data from the Federal Reserve, as of June 2020 the U.S. personal saving rate is now at 19%, a historical high. Americans are clearly looking to save as much money as they can during uncertain economic times. Unfortunately for these savers, bank savings accounts are paying near-zero yields. Even so-called “high yield” online savings accounts and CDs are paying APY rates in the range of 1.30-1.50%.

What are savers supposed to do? There has to be a better way to save. There has to be a better choice other than “risk your savings in the volatile stock market” or “earn near zero interest in a bank account.”

Introducing: Save

The better way to save is here. It’s not just a savings account, it’s a savetech platform that helps people maximize their savings.

Save was created by a team of financial industry veterans, quantitative experts, investment managers and data scientists. Our goal is to offer a better way for people to manage their savings.

Just as the robo-advisor category has emerged in recent years to give individual investors more options and flexibility for how to manage their retirement savings and stock market portfolios, Save intends to create a new category of personal finance as the world’s first “robo-advisor for savings.”

What is a “Savetech” Platform and “Robo-advisor for Savings?”

Save is not a typical savings account: it’s a comprehensive “savetech” platform – an FDIC-insured savings account that lets savers earn the potential upside of market investments.

How does it work?

Our savetech platform has a few components:

  • Market Savings Account: When you sign up for a Save account, your deposits are placed in an FDIC-insured Market Savings Account through our banking partnership. You can withdraw your deposits at any time and your money is fully FDIC-insured to the same extent as a typical bank savings account or CD.
  • Interest Invested in Market Portfolio: However, instead of having to settle for the small amount of near-zero interest that a bank savings account would pay, Save invests your interest in our diversified portfolio of investments (stocks, bonds, cash, some commodities and real estate). The portfolio is optimized with technology with the goal of delivering stable returns. Based on hypothetical back-tested performance, we expect that our portfolio can deliver average annual returns of 3.15%**.
  • The Save referral program: Save makes saving social. Whenever a Save customer refers a friend or family member to open a Save account, they will each receive a bonus of $1,000 of equivalent portfolio investments; this can help boost your investment returns significantly. This referral program is designed to be exceptionally generous and have strong upside potential for customers returns. Most institutions might give you a free toaster for referring a new customer; we give you measurable gains in terms of actual returns.
  • Everyday spending rewards: Save also offers a debit card linked to your Save account where you can earn additional rewards of the equivalent of $1 of additional portfolio investments for every $1 spent. So if you spend $10,000 per year on your Save Debit Invest card, your Market Savings Account will be credited with the equivalent return for an extra $10,000 of savings.
Low Fee “Savings Advisor”

You might be wondering: if Save can promise such a compelling returns, how much are the fees? The answer: our fee is only 35 basis points (0.35%) – and we only charge the fee if the portfolio delivers a return greater than the fee. Unlike many other investment managers, Save only makes money if we succeed at making money for you.

We serve as a “savings advisor” to our customers. We invest their money responsibly with sophisticated investments, optimized with financial technology and targeted for their savings goals, but we only make money when our customers make money. And our customers have no risk of losing their initial deposits, which are FDIC-insured through our banking partnerships.

With Save, you get the safety net of FDIC-insured deposits, and the upside of an entrepreneurial fintech “savings advisor” that smartly manages your savings yield to help your savings grow faster with market investments.

How Liquid is Your Save Account?

Save offers similar liquidity to a bank savings account: you can withdraw your deposits from Save at any time, but you have to leave your deposits with us for 12 months to earn a yield. We require customers to make a minimum 12-month commitment to earn a yield, based on the costs of investing/managing the portfolio assets.

What is in the Save Market Investment Portfolio?

Save is a savings advisor, so we help customize your portfolio based on your risk tolerance and savings goals. But in general, we invest our customers’ savings yields in a diversified portfolio of cash equivalents, U.S. and international stocks, bonds, U.S. Treasuries, emerging markets, commodities, and real estate.

The goal of our portfolio: deliver stable returns with short-term upside, but with a higher yield than any savings account or CD can achieve.

Until now, this type of tech-driven investment has mainly been available only to institutional investors or sophisticated high-net worth investors. We want to democratize these investments and make them available to the U.S. consumer market.

The moment is right for innovation in the personal savings space. No other company is offering this combination of FDIC-insured deposits and market-driven upside. At a time when the stock market is volatile and bank accounts are paying nearly nothing, our fintech “savetech” platform is reinventing the idea of what it means to make your savings grow. We believe this will be a new category of personal finance that will open up new growth opportunities for potentially millions of everyday savers and investors.

Tired of zero-interest bank accounts? Want a better place to put your savings? Sign up for Save.

Register here for Priority Access: https://www.joinsave.com/reserveyourspot

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