Pekin Hardy Strauss Wealth Management is partnering with Self-Help Federal Credit Union to offer a 24-month, 0.60% interest CD that will provide capital to underserved and under-banked communities in Chicago.
As we approach the halfway point of 2020, it may be an understatement to say it has been a difficult year thus far. The COVID-19 pandemic has caused significant loss of life, major economic hardships, and enormous strain on public services and budgets, creating devastating impacts on the lives of millions of people. Then, in late May, the murder of George Floyd reminded the country of the systemic racism and inequity that continue to exist in our society, which likewise causes devastating impacts on many Americans. In Chicago, individuals, small business owners, and non-profits – many of whom come from communities of color – have seen their livelihoods affected by Covid-19 and by the recent unrest.
As a firm and as individuals, we have been looking for ways to meaningfully help those who have been hardest hit by the events of the year thus far. In order to make a meaningful impact right here in Chicago, Pekin Hardy Strauss is partnering with Self-Help Federal Credit Union to offer a Federally-insured certificate of deposit (CD). The capital raised by this offering will be deployed locally by Self-Help Federal Credit Union to help individuals, small businesses, and non-profit organizations in low-income communities of Chicago cope with the impacts of COVID-19 and ultimately build a more inclusive economy in the city we all call home. We believe this is a great way to make a positive impact in our local community, and we are excited to be sharing it with you.
Some of our clients may already be familiar with Self-Help and their work, but for those who are not, Self-Help Federal Credit Union is a Durham, North Carolina-based non-profit organization that seeks to provide banking and lending services to communities that are underserved by conventional lenders. With a footprint covering North and South Carolina, Virginia, Florida, Wisconsin, California, and Illinois, the Self-Help network has over 150,000 members and more than $3 billion in assets. Self-Help intentionally locates its branches in low-income neighborhoods and seeks to provide affordable, responsible financial services to individuals and businesses in those neighborhoods while also financing community development and rehabilitation projects in areas that have suffered from disinvestment. Self-Help has deployed over $9 billion of financing to individuals, businesses, and other organizations across the country.
Our relationship with Self-Help goes back several years, and we are strong supporters of their mission and their work. With this CD issuance, we now have a special opportunity to support their work at a time when it is needed most. This CD will be offered with a 24-month term at a 0.60% interest rate. As a cash or short-term bond substitute, this is a low risk investment, due to the federal insurance backing, which also offers a reasonable yield. As a point of comparison, the yield on 24-month U.S. Treasuries currently sits at 0.16%.
This CD offering is being made available only to Pekin Hardy Strauss Wealth Management clients, assuming that total capital commitments exceed $1 million. Because we believe so strongly in the work that Self-Help is doing, Pekin Hardy Strauss as a firm and the Pekin Hardy management team are committing $250,000 to this investment. We are proud of the civic-minded nature of our client base, and we hope that our clients will see enough value both in the risk-reward profile of this issue and also in the work Self-Help is doing in our community to ensure that we reach the offering minimum.
There is a limited window for making an investment in this CD; the offering will close on July 29. If you are interested in making an investment in the Pekin Hardy Strauss/Self-Help CD offering, please contact us immediately to inform us of your interest.
What is the interest rate?
The CD will offer an interest rate of 0.60% with a 24-month term.
Is this CD federally insured?
Yes. Each client’s investment in the CD is insured up to $250,000 by the National Credit Union Administration, a federal agency tasked with regulating credit unions and protecting their depositors (similar to the FDIC for commercial banks).
Can I purchase this CD?
This CD can be purchased in taxable accounts and in retirement accounts.
How will this money be invested?
Self-Help will direct the capital raised in this CD offering to low-income neighborhoods in Chicago. The capital will likely be deployed as a combination of loans to individuals and small businesses as well as investments in community redevelopment projects.
Pekin Hardy receives no fee from the offering other than the management fees based on the individual client’s investment and fee schedule. This article is prepared by Pekin Hardy Strauss, Inc. (“Pekin Hardy”, dba Pekin Hardy Strauss Wealth Management) for informational purposes only and is not intended as an offer or solicitation for business. The information and data in this article does not constitute legal, tax, accounting, investment or other professional advice.