The Difference Between Outlet And A Bank Account.
Outlet is a high-interest way to start saving. You can think of our app as an alternative to a savings account, however, there are some major differences between Outlet and a traditional savings account.
Some of the differences between Outlet and a bank are the following:
— Banks are FDIC insured.
— Outlet has a high yield, banks do not.
— Banks issue under collateralized loans, Outlet helps users back over collateralized loans.
The current banking system
Banks are a great product. They offer customers a way to safely store their assets under the bank’s management. Governments ensure that these banks are kept up to high standards and are there to police banks from misusing your funds.
Banks use their customer’s money to generate income, which is usually not shared with customers. The dollars that you deposit into these banks are being put to work by the bank itself. Banks have very little transparency when it comes to how they manage and utilize their customer’s funds. When the bank puts your money to work you don’t know where it’s going or the kinds of returns the bank is actually making on your dollars.
Outlet — The New Way To Store Your Money
Adding money to your Outlet account allows you to earn higher interest rates than you would on a traditional bank account. This is done through the use of blockchain technology, more specifically through the use of a stablecoin. A stablecoin is a cryptocurrency that is pegged 1:1 to 1 USD. Each stablecoin is equal to one dollar. These stablecoins are just as good as your cash.
Outlet then takes the stablecoins generated from your deposit, and lends them to cryptocurrency traders and exchanges via a secured loan. A secured loan, is a loan that is backed by collateral. If the borrower decides to not repay the loan, their collateral is not returned. This secured loan ensures that your funds are safe, and available for withdrawal whenever you please. In part 2 of this series we will dive in and explain how it all works.
Deciding what's right for you
If you want more information on general finance tips please join our discord and speak to other finance people/Outlet users to get their feedback. https://discord.gg/H92cM3r
There are plenty of options on the market for you to store your money in or somehow earn a yield on it. Outlet is focused on providing people with a simple way to earn a yield on their cryptocurrency in a way that feels like dollars. The app is so simple you won't even know that it uses cryptocurrency. Although Outlet is not a traditional bank, you can send money to and from your bank account as shown.
If earning return on your money interests you Outlet is a great solution for you, however if you are moving money back and forth, and are not in a situation where you can save Outlet might now be the best product for you.
This is part one of a series on how Outlet works, and how we compare to traditional financial tools.
