Anyone familier with income notes (Toyota, Dominion, GM, etc.)?

[disneysteve]

I just learned about an investment I was not familiar with. There are investment notes sold by these companies that essentially function as a savings account. You can deposit and withdraw money anytime and earn a high rate of interest. They are not insured or guaranteed so there is risk involved that isn't present with your bank account.

Here is one example: https://www.incomedrivernotes.com/en.html
Currently paying 1.5%. $500 minimum purchase.

Here's another: https://investors.dominionenergy.com...t/default.aspx
Currently paying 1.25-1.5% depending on balance. $1,000 minimum purchase.

And there are others. These may not be the place to put all of your cash or your EF due to the risk involved, but they sound like something worth considering for some extra cash.

Do any of you have experience with this sort of thing?

[JBinKC]

While I haven't used this it looks like these companies are now using a crowdfunding technique to bypass the banking system in place of issuing commercial paper which is done in a minimum denomination of 10K. Seems like a really good find to park cash especially in amounts less than the commercial paper minimum. As for risk you can find their credit ratings through your brokerage

[scfr]

I have minimal experience. We purchased them only a couple months ago, so I don't have any experience yet with redeeming/closing out.

We had Ally no-penalty CD's maturing that had been paying 1.9%. If we had let the CD's roll over the rate would have been 0.55%. So I was looking for alternatives.
I learned about car-maker notes on the early-retirement.org forum - thanks corn18 for introducing that site - and decided to look in to them.

FYI - below is a link to a WSJ article I read while doing my research.

Just as JBinKC suggests, I researched the companies credit ratings - make sure you're checking the credit company and not the car maker.

This is what I consider the negatives:
These notes are unsecured --- this is so important to understand. Anyone investing in these needs to know that you could lose the money. Unlike FDIC-insured bank deposits, they are not guaranteed or insured by any government entity.
The rates are subject to change.

And the positives:
Higher rates than CDs (at present)
Low minimums (on the one we got, only $500 to open and only $250 to keep open). In other words, we can keep it open with low balance to keep it available as a temporary cash parking place.

And a feature that could be negative, positive, or neutral depending on your personal objectives:
Interest is automatically reinvested. So if you're looking for an investment that is going to give you monthly income, that's not going to happen automatically with these. You'd need to take the interest out manually.