Outlet Finance Review 2022: How Does it Work?

In today's review we'll talk about the Outlet Finance App which promises 9% interest as a saving account alternative. I'm going to break down how such a high rate is possible, what are the risks, and if it might be a good fit for you.
If you decide that Outlet Finance is a good fit, sign up with this link:

https://outlet.finance/open-account?r...

Let's start out by talking about what Outlet Finance ISN'T
• It's not a bank
• It's not a savings account or even a high yield savings account (at least not a traditional one)
• It is not backed by the FDIC
• It's not risk-free, there is the potential to lose your money

So, what is it?
• While Outlet Finance is not bank, it does operate similarly to one, but in the cryptocurrency space. A traditional bank operates by lending out the money from your account and pays you a portion of the interest that is paid by the borrower. Outlet Finance does the same thing, but with crypto and this means the interest rate you get paid is significantly higher.
Here's a good blog post by Outlet explaining how the lending process works
https://intercom.help/outlet-finance/...
Pros
• The 9% APY is by far the largest positive, at almost double digit returns Outlet is competitive with the stock markets historical returns
• Although the interest in generated by cryptocurrency lending, you don't need a deep understanding of crypto to make money. You don't need a wallet, nor do you have to deal with any exchanges, or monitoring the price of various coins, your return is about as passive as it gets
• The risks do seem to be largely mitigated through overcollateralization and smart contracts

Cons
• While the risks are small, they aren't zero. Cryptocurrency and smart contracts are still a relatively new and developing technology. The safeguards in place have not been tested and while they work in theory, moving from theory to practice is an entirely different animal.
• Aside from the risks of developing technology, Outlet Finance is not FDIC insured. So, if the company goes under or there is a "run on the bank" and your money is gone, you're out of luck at that point. No one is going to step in and reimburse your lost money
• These extremely high interest rates are not going to last forever, as crypto becomes more mainstream and more widely accepted as an alternative to the dollar. The cost of money will go down and loans will become less expensive. When that happens the returns from crypto lending platforms like Outlet will also go down. This is a small downside and isn't strictly limited to Outlet Finance, but it's important to know that this won't be the Golden Goose forever

Verdict
Let's again start with who shouldn't invest with Outlet Finance. If you're looking for a place to put your emergency fund so it earns a bit more interest, you shouldn't look at Outlet Finance or any form of investment. Your emergency fund needs to be accessible and not exposed to any risk (yes, I understand the effects of inflation), but inflation doesn't have the risk of making your emergency fund go to zero overnight. Do I think that'll happen with Outlet Finance, no I don't, but at the same time that risk while small, does exist.
Now who is Outlet Finance a good fit for? If you want to take advantage of the returns that are possible with crypto without having to deal with lending out coins yourself, Outlet provides a good medium to handle all the groundwork and you still take advantage of the high returns. It offers a great way to diversify your investments into something that is basically just as passive as investing in ETF.


0:00 9% ROI
0:14 What Outlet Finance Is Not
0:37 How Outlet Works
2:54 How is Your Money Protected: Ethereum Smart Contracts and the Celsius Network
5:48 Outlet Finance App Walkthrough
8:02 The Pros
9:34 The Cons
11:05 The Verdict

#outletfinance #cryptosavings #crypto

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DISCLOSURE: We are not financial advisers. The ideas presented in this video are for entertainment purposes only. Although the information is researched and vetted beforehand, it may not be up to date at the time of viewing. Please do your due diligence and research on the topic. You (and only you) are responsible for the financial decisions that you make.