Review CNote – earn 2.5% APY (Uninsured accounts)

CNote is the “alternative” Savings account, which invests their money in the development of small businesses and communities in America and advertises 2.5% APY. Unlike other savings accounts that are not insured at all, usually a Savings account or FDIC-insured or NCUA insured.

CNote gives money exclusively in certified institutions of social development (CDFIs), they discuss this in more detail here. They show that the total charge on the rates are lower than the FDIC insured products, keep in mind that if the insured institution, the FDIC is not your bills are still covered for up to $250,000. And when CDFI not you are an investor on the hook, if triple your protection plan ‘fails. Part of that plan includes a reserve Fund the net loss, which supports the CNote, but no details are listed on the amount to the Fund, and the total amount of rennet through Cnote so hard quietly. Unlike traditional accounts CNote account You will not be able to access your funds whenever you want. You are instead subject to quarterly liquidity with 30-days notice.

Our Verdict

I personally do not recommend to put money on account of such insurance, especially if you can get a rate of 2% APY with insured accounts (or up to 5% of the insurance compensation account). I think some people will be tempted out of the corner of the community, but You are not given any say about what type of projects are/are not funded because they are low risk projects, and somehow I suspect that most of them will be funded without CNote. I think it’s kind of a bit like Kiva, but for American small business and community projects, and you receive a refund, but You don’t get to choose your projects.


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