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Did you grow up with a piggy bank? You know, the pink kind that smiles end to end as you proudly plop each copper penny into its thin slat? Plunk. Plink, plink.
Yep, me too.
But, what I’ve come to realize is the psychology behind that little pig is much broader than I thought. To me, that piggy bank was the first representation of “savings” – or the idea of storing money for another day. As a kid, it could sometimes feel like torture, waiting endlessly for that 50 cents to grow to $5 so I could finally buy that special toy. As a teenager, it started to feel like power, where I didn’t have to ask my parents for every purchase. As a grown adult, it feels like safety, knowing that despite the uncertainties of our world today, I’ve got some cash on hand to handles life’s bumps and cool opportunities.
But along that journey, something interesting happened in my mid-twenties. The concept of savings and that piggy bank started to change. It’s when I was informed that dollars in my savings are not just supposed to sit and collect dust – they are actually supposed to work for you while you sleep. Huh?
Then my dad explained to me what actually happens to my savings when it’s in a bank. Despite my fairytale impression that my dollars were sleeping soundly in a big silver vault protected by Vin Diesel, the truth is the complete opposite. My savings dollars – and yours – don’t stay in a big vault at all, but rather get lent out to other people by the bank. This is how the bank “puts the money to work.” It takes my $100 as a “savings deposit” and then loans that $100 to someone else in the form of a home mortgage, credit card or simply buys other investments with it like treasury notes.
What happens next? Oh.. you’ll love this part. The bank then earns money off of our money and returns a portion (and I mean less than 1%) of that earned money back to us – the savers. So when you look at your bank account and see the word “interest” that’s code for:
“Of the money we make off you, here’s how much we’re going to give back to you. Love, Your bank.”
And here’s where the concept of CNote was born. We think, if our money is being used anyway, why not a) give the savers more of those earnings (ie. interest) and b) why not put those dollars to use for good things we care about (ie. supporting local businesses, non-profit, low-income community development, etc).
Sound crazy? Nope.
We think it’s high time we revisited this esoteric concept of “savings” and how the trillions of dollars out there currently don’t go to work for us and our communities, but for the big banks. It’s time to take back our savings and put it to work in ways that drive more earnings for good savers and more goodness for our communities.
CNote is making this happen, every day, by working with inspiring community lenders that are not only certified by the Treasury Department, but have a proven track record of delivering solid financial performance and incredible social impact. It’s how we bring great earnings and impact to everyone.
Tell that childhood piggy bank to stand back. Change is a comin’.
– Cat Berman, Co-founder