After last weeks post about on-line savings and SmartyPig I have been tuned in to alternate banking stories. This week a story out of the UK caught my eye. We all know that credit is still hard to come by at the institutional level and that if it’s not hard to get it is either expensive or tied to government involvement. Many of the people I speak with these days are either talking about the deposit base they have (or still are) losing or alternately are praising their deposit acquisition strategies (or secretly bemoaning their cost).
Imagine my surprise (and delight at the timely irony) when I discovered the business model that is unfolding as a type of eBay for cash. In this scenario, you register an account with the likes of Licuro.com, Moneyaisle.com or Spaarbod.nl (brush up on your dutch before visiting that last site!) and put your cash up for auction.
If you can offer up the use of a significant amount of cash (usually $20,000 US or more) for a period of time (usually 14 days to 2 years) then various financial institutions will bid with guaranteed rates of return, often well in excess of normal bank deposit savings rates.
John Norden, MD, licuro.com, says: “We’ve proven through our operations in Europe that the interest rates banks are prepared to offer via auction are materially higher than the rates offered both on the high street and on ordinary online savings sites so it makes sense for savers.”
Andy Golding, CEO of Saffron Building Society, adds: “The current economic conditions mean that the environment for banks and building societies to raise funding is extremely competitive, whether from one another or through the capital markets. It therefore makes sense for us all to take advantage of alternative sources, in this case it is direct access to savers’ funds via licuro.com.”
It would seem that there is a quiet revolution happening with the way some of us choose to manage our money. In the past this was often a passive endeavor where we would hand over virtually our entire wealth to large corporations to manage and grow for us. What we came to realize is that the only one’s guaranteed to make money were this same corporations and the people who connected my money to them. Now we have the likes of SmartyPig and Licuro that are dedicated to making a difference for the individual. These are the folks that are starting to put meaning back in the phrase “manage the pennies and the dollars will take care of themselves”.
