Yieldstreet Review 2021

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Written By

Reviewed By

Updated on Friday, June 4, 2021

Yieldstreet is a trading platform for alternative assets that allows investors to branch out from stocks, bonds and mutual funds. This crowdfunded debt platform allows you to invest your money in art, real estate and even lawsuits.

Yieldstreet‘s appeal is that it allows everyday investors to pursue different types of investments that are often reserved for professionals. It’s also a way to diversify your portfolio beyond traditional assets, like stocks and bonds, though of course all investments carry some form of risk.

Yieldstreet
Visit Yieldstreet Secured
on Yieldstreet’s secure website
The bottom line: Yieldstreet is an alternative investment platform that appeals to people who want to invest money in different types of assets, like marine vessels, commercial finance and more.

  • You can diversify your portfolio beyond traditional securities.
  • It offers long-term investing options for accredited and nonaccredited investors.
  • However, alternative assets carry unknown and potentially high risks.

Minimum deposit
  • $1,000 for Yieldstreet Prism Fund
  • $5,000 for individual offerings
  • $1,000 for short-term notes
Account types
  • Individual taxable
  • Traditional IRA
  • Roth IRA
  • Solo 401(k)
  • Trust

Asset classes
  • Real estate
  • Marine
  • Art
  • Legal
  • Commercial finance
Fees
  • Annual management fee
  • Administrative expense
  • IRA account maintenance fees
Sign-up bonusNone currently offered

What Yieldstreet offers and who it’s for

While you can open a few different types of traditional investment accounts — like individual retirement accounts (IRAs) or regular taxable accounts — where your money goes with Yieldstreet is anything but traditional. The platform is open to both accredited and nonaccredited investors, with access to legal, commercial and marine investing, among other options.

But you’re not investing in securities. Yieldstreet specializes in crowdfunded debt — an alternative investing option with unknown risk. If you’re investing in legal finance, you could get paid following an event (sometimes called a settlement event). You can finance someone’s lawsuit, and based on the percentage of your investment in that suit, you’ll see returns once the lawsuit is settled.

In crowdfunded debt, you and other investors pool your money to fund loans to everything from business ventures to lawsuits. This risk isn’t much different than the risk with traditional securities, like stocks and bonds, especially if you don’t need money right away. Yieldstreet is best for investors who don’t plan to touch this money for a few years.

Pros

  • Many alternative investment choices: While real estate investing is an option that’s available with other crowdfunded debt platforms, at Yieldstreet, you could also invest money in litigation finance, marine vessel acquisition and aviation.
  • Potentially high yields: The average net internal rate of return is 11.42%. Compare that to the S&P 500, which has an average long-term return of almost 10%.
  • Asset-based investments: Each investment is backed by collateral, meaning it’s supported by an asset such as real estate or a legal settlement. Collateral provides a bigger safety net. If a loan defaults, Yieldstreet works with the loan’s originator to recoup as much of the principal and outstanding interest as possible, potentially through legal action.

Cons

  • Expensive fees: Yieldstreet charges 1% to 2% in management fees every year, depending on what you’re investing in and your account. There are also account maintenance fees, listing fees and fund expenses.
  • No guaranteed return: Even though you could earn a potentially higher return through Yieldstreet compared with traditional investing, you’re also not guaranteed to get any return. Even with assets backing investments through collateral, there’s still a chance that a borrower can default on their loan and you could lose your investment.
  • No liquidity: These investments are crafted to tie up your money for at least a few months if not a few years. They are purposely non-liquid, which might be a turnoff to investors who prefer to tap into their investments whenever they need money.
  • Targeted toward accredited investors: The Yieldstreet Prism Fund is for first-time or casual investors, but the company targets accredited investors, or people who have a net worth of $1 million or assets under management of $1 million or more.

Yieldstreet fees and costs

Annual management fee1% to 2%
Prism Fund annual administrative expense0.50%
IRA account maintenance fees$299 to $399, depending on account balance
Annual fund expenseVaries; per investment

Yieldstreet isn’t a traditional brokerage account, so you won’t get hit with trading fees, inactivity fees or other types of commissions that come from those types of accounts. However, you will owe an annual management fee that ranges from 1% to 2% of assets, and the Prism Fund also carries an annual administrative fee of 0.50%.

Investors are also responsible for flat annual fund fees, which vary by investment.

Yieldstreet investing tools and research

Portfolio overview

Your portfolio overview gives you a snapshot of how your investments are performing. You can check out how much you’ve contributed to your total investments, any earned interest and if any of your investments are in default.

Investment tracking

From your portfolio section, you can see your investments in a list and then view each one individually. You can sort by your target maturity, investment value or even the interest accrued so far. You can also view investments that are in default.

Crowdfunded debt resources

If you’re unsure about how crowdfunded debt works, Yieldstreet has a slew of resources about it. You can read these before signing up to see if this investment choice is right for you or if you want to learn more about a specific asset class after you’ve opened your account.

Yieldstreet user experience

You can monitor your Yieldstreet investments on a desktop or mobile app through the App Store or Google Play. A few mobile users have complained of bugs, including problems linking bank accounts and verifying account status, as well as slow response.

If you’re running into any issues, you can email Yieldstreet at [email protected] or call the company at 844-943-5378. There is no live chat feature available, but you should hear back from a representative within 24 hours.

Yieldstreet investor education

The Yieldstreet resource center is the education hub for users and nonusers alike. Here you’ll find:

  • Free articles and videos about alternative investing
  • Your new investor tool kit
  • Information about how Yieldstreet works

Your portfolio is the best place to understand your investments, including how they’re performing, any money you’ve earned and your progress. Yieldstreet sends monthly and quarterly account statements and tries to update you any time there is new activity involving one of your investments.

Since Yieldstreet isn’t like a typical brokerage firm, you won’t find the history of how a specific security has performed or how it could potentially perform in the future. With that said, you can browse and screen investment opportunities at your own risk. For instance, if you’re investing in lawsuits, you’ll see that you’ll get paid following an event — like a lawsuit settlement — rather than by a specific date.

Yieldstreet security

Encrypted personal information

All the information on the Yieldstreet site is encrypted. The identity information you provide is stored by SynapseFI, Yieldstreet’s third-party financial provider. The company doesn’t store or see banking information or bank login information, even when you provide banking details to link your account.

Two-factor authentication

Yieldstreet provides two-factor authentication via Authy. The company also encourages you to set up security measures in case of an emergency, like if you lose your phone.

Asset screening process

Yieldstreet’s due diligence process starts with originators who screen investment opportunities. They’re experts within their asset class, like art or commercial finance. Then Yieldstreet does an independent analysis. Every investment gets a thorough check to review the risk for the investor. Almost every investment is asset-backed, so if an investment defaults, investors can still earn some returns.

Then Yieldstreet gives investors the materials to make informed decisions about their investments. Investors are encouraged (and expected) to review these documents, talk to financial advisors and use sound personal judgment when making these investments.

Insured funds

The Federal Deposit Insurance Corp. (FDIC) insures deposits in banks and thrifts. At Yieldstreet, your money goes into a Yieldstreet Wallet — an account held by Evolve Bank & Trust, which is an FDIC-insured bank. Funds deposited into this account are insured up to the maximum allowed by law: $250,000. All investments carry some level of risk, and you should be careful with every investment you make.

Alternatives to Yieldstreet to consider

Yieldstreet is one way to invest in alternative assets, but it’s not the only way. For instance, you might be interested in investing money in real estate and art, but not necessarily marine vessels or litigation. There are some other alternative investment managers to consider, like Fundrise and CrowdStreet.

 Average costMinimum depositBest for ...
YieldstreetFlat listing fee; 1% to 2% management fee$1,000 to $5,000Accredited investors who want to explore many different alternative investment options
Fundrise0.15% advisory fee; 0.85% management fee$500 to $100,000Newbie real estate investors looking to diversify their portfolios
CrowdStreetUp to 2% acquisition and disposition fee; 3% to 4% property management fee; 1% to 2% asset management fee$25,000Accredited investors who have the capital to explore commercial real estate investments

Yieldstreet vs. Fundrise

Fundrise is a crowdfunded debt platform where investors pool their money to buy shares in real estate investment trusts (REITs). Fundrise is great for nonaccredited investors or those who don’t have a high net worth. It takes half the minimum amount to open an account: $500 compared with Yieldstreet Prism Fund’s $1,000 requirement. Fundrise focuses almost entirely on real estate and not necessarily unknown investment risks, like legal and marine finance.

Fundrise is best for newbie investors who are looking to diversify their portfolio beyond stocks, bonds and other securities. The timeline for Fundrise investments is similar to that of Yieldstreet. Investments aren’t liquid, and you should expect to stay the course for a few years, at least. Fundrise is regulated by the Securities and Exchange Commission (SEC), and many of its offerings are lower-risk compared with Yieldstreet‘s offerings. Fundrise is a better option for passive income than Yieldstreet.

Open a Fundrise account Secured
on Fundrise’s secure website

Yieldstreet vs. CrowdStreet

CrowdStreet is a crowdfunded debt option that, like Yieldstreet, targets accredited investors, but with a much higher threshold to qualify to open an account ($25,000). Yieldstreet has investing options for accredited and nonaccredited investors, whereas CrowdStreet only offers options to accredited investors. CrowdStreet also focuses on REITs and not necessarily other asset classes.

CrowdStreet expects you to stay invested for a few years, like Yieldstreet and Fundrise. However, if you’re not an accredited investor or a high net worth individual, you may not qualify to open an account with CrowdStreet.

Open a CrowdStreet account Secured
on CrowdStreet’s secure website

All information included in this profile is accurate as of 5/13/2021. For more information, please consult Yieldstreet’s website.

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