A High Yield Investment Program, or HYIP, is a type of investment scheme normally offered via the Internet. HYIPs typically accept deposits as low as $1 while promising astoundingly high returns. Online HYIP schemes rarely last for the long term. Many HYIPs  operate as Ponzi schemes, a Ponzi scheme is an investment operation that involves paying abnormally high returns profits to investors out of the money paid in by subsequent investors.

Most HYIPs disclose little or no detail about the underlying management, location, or other aspects of how money is to be invested, and relatively little information other than asserting that they do various types of trading on various stock and forex exchanges;  Claims that investors funds can be placed in a bank account, and then used, without risk, to trade bank debentures, or other financial instruments; Claims that invested funds can be used to lease or rent U.S. Treasury Obligations and then use these same leased securities as collateral for further trading programs; Claims that trading Medium Term Notes (MTN's), Prime Bank Notes, or any other bank instruments, on a riskless basis, will yield above market average returns; Claims that Letters of Credit or Standby Letters of Credit can be traded for profits.  They are sometimes presented with some form of an emotional appeal,  and promises that they will help investors achieve financial freedom. 

Hyips Games

As a result of online forums and monitoring sites which have made HYIP investors more aware of their nature, a different sort of "honest" HYIP began springing up in the early months of 2006. Basically, the HYIP owner calls his or her program a "ponzi-structured game" where one should "not invest money one cannot afford to lose", and where there is "never a guarantee of earnings or refunds". They promise to pay out up to (for example) 95% of deposits, the rest going to hosting or other fees and the owner's profit.

In such "games", the first participants ("investors") may make a good profit and are encouraged to refer other people to the program because of referral commission, the fact that they have already made back their principal and are playing with profit, and that the more people who deposit money, the more money can be paid out to participants. In theory, strategies can be developed to maximize profit using these games (but, of course, since this is a zero-sum game, such strategies work by taking advantage of ignorance or errors by others). Some forum users may gain a reputation whereby others will trust their word that they have been able to withdraw their profits, encouraging others to invest in the hopes that more will invest after them and that they can therefore make a profit. As these games are by definition Ponzi schemes, it is inevitable that the vast majority of investors who are not at the top of the pyramid will lose their money.