Crowdfunding is doing what banks used to do – care about you. How about a hug?
How would you like to get 6% guaranteed interest without risk for your hard-earned savings? Certificates of Deposits (CDs) are earning only about 1% at big banks. You could put it in the stock market and risk getting at most 4% to 10%. But right now the stock market is very volatile with triple digit drops and rises. You could lose all your money. That would be a -100% interest rate.
A safer arrangement is loaning your money to a crowdfunding company that in turn loans it to small businesses for a slightly higher interest rate. Each crowdfunding company is the middle man of a perfectly legitimate transaction that big banks used to do.
Big banks are too busy giving 1% or less on savings while charging 26% on credit cards. You do the math. Big banks do not care about you at all.
Crowdfunding and crowd sourcing are really taking off as a means to raise money or get loans. But most companies loan your deposits to small businesses. Here is one such company.