Another one which is a little different is UHaul Investor's Club... those are longer term deals. Current offerings are 1.75% for 2 years, 3% for 5 years and 3.75% for 8 years and you receive quarterly payments of principal and interest.
https://www.uhaulinvestorsclub.com/InvestmentOpportunities
We began "investing" with UHaul 6 months ago, putting money in every two weeks on auto pilot, so we now have a nice and growing account.
A few things I have noticed and/or to take note of:
1. The UHaul notes are secured debt. As you can readily see when you visit the site, they are all asset-backed. In the event of default, there is real property that a trustee can step in, take possession of, and sell off. Granted, moving blankets, 20 year old towable trailers, and the other items they attach as collateral have questionable value, but it is the nuts and bolts of their business. Other programs like Toyota, GM, Dominion are unsecured. On the very long term notes, when they offer them, they can go to 30 years and backed by real estate of franchisees, and when offered the yield on those have gone as high as 8% or more (it's been quite a while since those were offered). Lastly, keep in mind that ultimately, these are debt instruments of Amerco (UHaul's parent - publicly traded company listed on NYSE), so even after the asset-backing, at the end of the day, like any other corporate debt, the company is obligated to make good on them. Every note is registered with the SEC and you can review the prospectus of any of them on sec.gov.
2. The UHaul notes are offered weekly. They open on Tuesday at 6PM and close the next Tuesday at 5PM. At that time, depending on interest rates, what they offer may change. When we opened our account and began contributing, 8 year was at 4%, 5 year was at 3.25%, 3 year was at 2.75%, 2 year was not offered. A couple months ago, they began offering the 2 year and the yield was 2%. They also had a 4 year at 2.75%. Since then, they've only been offering the 2, 5, and 8 year and generally the spreads are at 0.25%/year. However, a few weeks ago, on the 2 year notes, they dropped to 1.75% from 2%, while maintaining the 5 year at 3% and the 8 year at 3.75%. Personally, I had been sticking to the shorter term notes at 3 and 5 years. When they offered the 2 year instead of the 3 year I bought those, until they dropped the rate to 1.75%, and since then have been buying the 5 year. From what I see (they provide a real-time view of each offering), most others have a similar approach. The shorter term notes at 5 years and under will be fully subscribed weekly. Initially, the 2 year notes at 1.75% did not get much demand. However, that has picked up as has the 8 year as well.
3. When the Uhaul notes pay, they work the same way a mortgage works - it is amortized. So, your quarterly payment will include the interest on the balance plus a portion of the principal. The balance declines over the term of the note and with the final quarterly payment it will be comprised mostly of the last prinicipal payment and a small interest amount, exactly like a mortgage. I like this aspect as it immediately produces cash flow, so the funds can be reinvested in new notes. At this time, as the interest rates are still low, that's not necessarily a good thing. However, when the time comes that yields do move higher, it will allow reinvestment in higher yielding notes. Though I may have 5 year notes, not all of the funds are locked up for 5 years - it's throwing off interest and a portion of the principal balance quarterly.
4. The website is very good, simple and straightforward. Setting up an account is fast and easy, and it is easy to set up a recurring investment schedule so you can have funds transferred in to your account automatically. You still need to go in and choose what notes you want to put those funds towards, but you don't have to deal with manually transferring the money from your bank over and over. There is a 5 calendar day delay from the day a transfer is initiated until the funds are available for investment. Maybe it's 3 business day, I'm not sure - my transfers are initiated on Thursdays and the money is available on Tuesday, so that's how I see it.
Disclaimer: I am not recommending or suggesting anyone invest in the UHaul notes, just providing the info and my experience with them thus far. Like the other programs from Toyota, GM, etc. the funds are not FDIC insured, but are ultimately financial obligations of the company.
