Today’s tease hits home for most savers — the return you get for your money in the bank stinks, and most savings accounts and similarly “safe” savings vehicles yield don’t have interest yields that are even high enough to keep up with inflation.

So the promise of a “savings account” that yields 8.2% is obviously very attractive — here’s how Ian Wyatt spins this tale in the new ad for his High Yield Wealth newsletter:

“Four Miles from the crooks on Wall Street, one unheard-of specialized New York bank is breaking all the rules and paying its members an astounding 8.2% annually…

“And you’ll be shocked to see which banks and mutual funds are on the list of account holders – and who’s keeping this bank secret from regular investors…”

And the letter goes on, including a few more specific clues to get the Gumshoe going:

“Most bank accounts yield a laughable 1.25% – at most.

“But one small, unheard-of specialty bank is offering an 8.2% savings account to its members – full stop.

“You haven’t heard about this bank anywhere else because they don’t advertise their rates on any website. They don’t have a single branch outside of their Manhattan offices.

“They’re completely no frills.

“No free pens or calendars. No mints in a bowl by the teller. No fancy safe-doors, bulletproof glass, ATMs, security guards, red-velvet ropes or polished marble floors.

“Nothing but a small office in the “old-money section” of Midtown Manhattan on Park Avenue, near the Waldorf, and an 8.2% annual yield.

“It might sound old fashioned, but this bank has one simple, straightforward: borrow low and lend high.”

So … it still sounds like a bank, right? And the little images they throw in there of calendars and ATMs make you picture traditional banks, for sure, and probably presume that level of safety. And to tell you the truth, that’s probably enough to toss into the ol’ Thinkolator and adjust the dial up to “chew” to root out our answer … but Wyatt is good enough to provide a few other clues along the way, so let’s do him the honor of lookin’ at ’em.

“… they currently have a 152% profit margin.

“That means, for every $10 they lend out, they get over $25 back.”

That doesn’t sound like Park Avenue near the Waldorf, that sounds like it’s a little farther South … maybe Little Italy, or across the river in Jersey. And it sounds like cement boots, to be honest. Still, there’s probably a story in there somewhere.

And they say that …

“… the minimum amount of money to get started with this savings account is currently “UNDER $20”

Which means, in Gumshoe-speak, that the share price is less than twenty bucks. No, I hate to burst your bubble, but it ain’t a real savings account. It’s surprising, in fact, that the copywriters didn’t employ their right pinky and call it a “savings account“ like they typically do with such misleading verbiage.

And Wyatt also pulls out the hackneyed list of institutional investors who own the shares — names like Fidelity, Vanguard, Legg Mason, Oppenheimer, T. Rowe Price. As if there is a single halfway-decent stock of any reasonable size in this country that’s not overwhelmingly owned by the big mutual funds and institutional investors. And a lot of ’em that aren’t halfway decent.

And of course, Wyatt says that these big investors are “keeping it a secret from you!”

Some more details? I’m so glad you asked:

“But the bank that pays 8.2% to its savings account holders didn’t take a dime of bailout funds. They didn’t have to raise additional capital either.

“They also don’t pay out any million dollar bonuses. Their entire board of five people, including the CEO, and two co-founders made $1.2 million combined in 2010 – or less than $250,000 each on average.

“Even more amazing, this bank actually paid out HIGHER savings account yields in 2008 and 2009 than they did in 2005, 2006 and 2007….

“This bank is so well funded, in part, because it’s a very specific type of bank that’s NOT ALLOWED to take on more debt than it has assets to cover. That means they can only lend out the money that they have. No more. No shady accounting tricks. No credit default swaps or risky sub-prime mortgages. This bank simply lends its capital to low risk, growth stage small businesses. And then they pay the returns to their members.

“And right now, this bank is so well managed that they currently only have 60% of their funds lent out. That’s a 40% safety buffer for their members.”

So then we get into the meat of the ad, with a little bit of actual reality seeping in about what kind of bank this is. Lots of talk about lending to small businesses who are ignored by Wall Street, and about becoming partial owners of companies and board members when they lend money, and about profiting from the downturn … and that they “have to pay out over 90% of their profits to their members BY LAW.”

Which means you’re probably already guessing what kind of bank this is, right? You got it, this is a Business Development Company, often referred to as a BDC. They were written into the tax code about 30 years ago as a way to spur lending to small businesses, and they get to be tax-exempt as long as they pass along 90% of their income to shareholders (that’s you — no, it’s not a savings account, it’s ownership of a dividend-paying BDC).

There are a bunch of Business Development Companies out there — and though Wyatt trumpets their success during the financial crisis, several of them got really, really clobbered at that time when the small businesses they lend to had trouble paying back those loans.

So you may have guessed it was a BDC, and you may even like these kinds of investments … indeed, you may well have seen them trumpeted by other newsletter folks and pundits recently — there are a lot of people talking up BDCs right now, since most of them have high yields and they should tend to do well during economic recovery, and they’re not quite as yield curve-dependent as the mortgage REITs or as (arguably) over-loved as the MLPs.

But which one is Wyatt touting? Well, aside from the general pitch for BDCs, which is what most of the tease distills into, we get a few specific clues:

They’re located on Park Avenue in Manhattan.

They yield something like 8.2%.

We get the specific board compensation numbers teased above, and the history of raising yields (though be careful about that, a higher yield can mean either a higher payout … or a lower share price).

And they have 60% of their funds lent out.

And they’ve lent their funds to “over 150 different companies … in nearly every single state of the union.”

So which BDC are we looking at?

Well, when we toss all those delightful clues into the mighty, mighty Thinkolator … we get the Gumshoe solution to our puzzler: Ares Capital (ARCC)

Ares, by virtue of having merged with/purchased/rescued the sector pioneer Allied Capital last year, is now the biggest of the BDCs (though American Capital, ACAS, is close to the same size), and they do have a very large and diversified portfolio of loans (and the associated equity and warrants, in some cases). They do have these “relationships” with over 150 companies — more like 180ish at last count.

ARCC has paid out a $1.40 annual dividend in each of the past two years, which was a cut from the growing dividend they paid out in 2007 and 2008 — the cut came, not coincidentally, back in March of 2009 when the world was coming to an end and all of the BDCs got absolutely clobbered. ARCC was down at about $4 at the time, and clearly folks expected them to collapse, but they reduced the quarterly dividend to 35 cents and kept paying it out, and the share price recovered pretty quickly … it’s now around $18 (so yes, per the teaser, “under $20” to “open your account.”)

BDCs use their equity (money they raise from selling stock) and debt and, sometimes, easy financing from government small business financing programs to lend to small and medium size businesses — in effect, most of them end up acting like private equity funds or venture capital funds, it’s just that they typically deal with midsize companies in boring businesses that aren’t sexy enough for venture capital or are already too indebted for private equity (and too big for local bank loans, too small for Wall Street financing).

Since they only lever up a little bit, they have to lend at pretty high rates or make great investing decisions to pay out high dividends, and the bookkeeping can be a bit hard to follow — and sometimes, depending on who you ask, a bit shady or optimistic (as you might remember, David Einhorn’s highest profile short target before his recent campaign against St. Joes was Allied Capital, part of the reason why that company needed to merge with Ares).

Oh, yes, and they are headquartered on Park Avenue — and they’re externally managed, so the fact that they have relatively low executive compensation, per the teaser, is probably because of their management contract with their partner (also called Ares — Ares Management LLC in this case), which is a bigger investment banking group. I assume they pay some sort of set management fee along the lines of the 2 and 20 (2% of assets, 20% of gains over some benchmark) that most hedge funds charge, but I have not checked.

The BDC is underleveraged right now, so yes, they should have room to grow their portfolio without resorting to more equity raising (they have raised equity many times, which is the main way that BDCs grow since they’re not allowed to reinvest profits in the business — they have to pay them out as dividends). Last I saw the debt/equity ratio was around 50/50, but that was in September.

And no, BDC’s are sort of a kind of bank … but this is not an “account”, you’re an owner and entitled to your share of the profits, but if they lose money or otherwise disappoint, your “savings” are certainly not guaranteed if you buy these shares.

So … if you’re looking for a BDC high-yielder, this is certainly one to consider. There are several others that are smaller, including the other pioneer of the business, American Capital (ACAS), which I don’t think has recovered enough to pay a dividend again yet, and Pennant Park (PNNT), which is not far away over on Madison Ave. and has roughly the same yield, or Gladstone Capital (GLAD) or MCG Capital (MCGC), both of which also yield 7.5% or so … and I’m sure I’m failing to mention some others. If you’ve got a favorite in the group, or are a fan or foe of Ares, let us know with a comment below.