Trending in the latest finance news is the tech giant Yahoo Finance as it launches its latest app Tanda, which allows small groups of either five or nine people to save their money together for short-term goals. Using the concept of ‘money pool’, members of a Tanda group circle need to pay a fixed amount to the group’s saving pot every month. Every month one member gets to take the entire pot home! This feature makes it different from a gambling app.
The other difference between saving in Tanda and saving on your own is how the app handles payouts. The first two people to receive their money pay a fee, but the last payout position receives a 2 percent cash bonus. This rewards users who are willing to wait to receive their turn at the pot, though some will want higher positions in order to get the large payout sooner.
A higher position is obviously more desirable if you have a more immediate need for the funds – like buying books for school or replacing a dead laptop, for example. Of course, you still have to pay into Tanda to take money out, so it’s not a direct replacement for a credit card. But, with some planning, it could be used as an alternative to charging larger purchases.
As a user participates in Tanda by making contributions, their “Tanda score” increases. With higher scores, the user gains access to higher value savings circles and earlier payout positions. These savings circles can reach up to $2,000.
And if someone drops out, Tanda will step in to cover their positions.
Tanda is also working with its partner Dwolla to vet users before they can begin saving, the company says. Users will be required to submit a valid ID and have a U.S. bank account.
Yahoo says that the app is designed to help individuals achieve their financial goals without racking up more debt.
The company hopes this will allow Tanda to attract a millennial audience, which is already drawn to social apps in the finance space, like Venmo. In addition, this younger demographic is facing a variety of financial struggles, like higher costs of living, difficulties in finding work, and they often struggle to save on their own.
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