Today, CNote has officially launched The Promise Account, a cash solution that optimizes for impact and return, while being fully insured. You can learn more on the product page and read pre-launch coverage from Impact Alpha.
CNote’s Promise Account Taps Power of Cash for Competitive Returns + Social Impact
New insured cash solution shifts capital to financially underserved communities
OAKLAND, Calif., Feb. 19, 2020 — Driven by the conviction that cash holdings are an underused tool for social good, CNote has launched the Promise Account, a cash solution for foundations and other institutional investors that’s optimized for returns, impact and insurance.
The Promise Account targets a big portion of the nearly $20 trillion in cash and equivalents sitting in the market. CNote places account holders’ dollars in competitive deposit products, such as money market funds and CDs, available from vetted FDIC- and NCUA-insured community development financial institutions (CDFIs) and low-income designated (LID) credit unions. CNote optimizes this basket of products to achieve the highest returns with liquidity of 90 days or less.
A one-stop shop for cash with impact
“We see cash as the final frontier of impact because traditional cash solutions sacrifice impact, returns or liquidity,” said Catherine Berman, CEO and co-founder of CNote, a fintech platform whose mission is to close the wealth gap in the U.S. “The Promise Account fills a gap for institutional investors that want to support financially underserved communities while generating competitive returns.”
The Promise Account is a one-stop shop for cash with impact. The fee-free accounts are fully insured up to $3 million per investor through the FDIC and NCUA. Investors can sign up and manage their accounts online, with a minimum deposit of $250,000. Their money grows the deposit base at U.S. community institutions, allowing them to increase lending activity and deploy additional financial resources: CDFIs fund female- and minority-led small businesses, affordable housing and economic development, and LID credit unions serve communities where most people have household incomes well below the national median.
To replicate the Promise Account, investors would have to research mission-aligned investments across multiple financial institutions and manage multiple accounts to receive more than $250,000 in insurance coverage, maximize returns and maintain relative liquidity—a burden few would take on.
Reduced risk with enhanced reporting
“The Promise Account eliminates the barriers for accredited investors that want to invest for positive impact and need to park their cash where it’s safe and easy to access—we think it holds particular appeal for foundations,” said Berman.
“CNote provides more than deposits when we work with CDFIs and credit unions,” she added. “We act as a partner, providing technology that enables them to accept deposits more readily and efficiently. That means we get greater visibility into the impact they are creating, so we can go beyond vague assurances of community benefits and give Promise Account holders clear impact measurements.”
CNote is an award-winning, first-of-its-kind financial platform that allows anyone to make money investing in causes and communities they care about. With the mission of closing the wealth gap, CNote directs every dollar invested toward funding female- and minority-led small businesses, affordable housing and economic development through its nationwide network of community lenders.
Read The Full Release: