The Oakland-based startup CNote wants to reward everyday savings-account holders with more than a fraction of a point of interest.
Hundreds of billions, or even trillions, is sitting in low- or no-interest savings accounts. “There’s no reason we can’t unlock it for good by putting that money to work in our communities, while driving better returns,” CNote’s Catherine Berman says.
The first product is a “high-yield savings product” that pools deposits and invests them in Community Development Financial Institutions, or CDFIs.
Unlike banks, which use the cash for credit cards or loans and typically offer depositors less than 1% interest, the CDFIs invest in women and minority-owned businesses or local infrastructure.
CNote’s product returns 2.5% to depositors. CNote first attracted $9 million in savings from accredited investors.
It is now making the Securities Exchange Commission-qualified product available to everyday savings account holders.