The Equal Exchange CD

A Simple, Direct Investment for Real Change

We are proud to offer this new type of investment, managed by our partner Wainwright Bank.

The Equal Exchange Certificate of Deposit helps small farmer cooperatives in 19 countries get a fair price for their crops. Interurn for doing good, you also get a competitive rate of return. (Check the latest rates)

The CD term is three years with a minimum investment of $1000. You could buy a conventional CD and have your money help finance a strip mall in Chicago or condos in Miami. Or you could buy an Equal Exchange CD and help finance small family farmers. It’s good to have a choice.

Equal Exchange has been growing fast – tripling sales from $10 million to $29 million in the last five years – and benefiting thousands of farmers and their families. But buying ever more coffee, tea and chocolate each year requires financing. Many of our supporters have asked how they can help, and this is our answer.

Here’s how it works: the minimum purchase is just $1,000, there’s no maximum, and the term is three years. The CD program is managed by Wainwright Bank, a well-respected socially responsible bank in Boston. All the money from the CDs is pooled together and made available to Equal Exchange as a low cost loan. Your CDs guarantee that loan. That means that there is a higher risk than with a normal CD; if we default on the loan it’s possible to lose some of the principal.

In return for that risk, your money can be used for tremendous good. For example, $2,500 can buy, at Fair Trade prices, the complete coffee harvest of a typical family farm. That 5-acre farm, perhaps high in a remote Peruvian valley, might support 6-8 people. So with a $2,500 CD you can help keep a family on their land, providing hope that they can improve life for their children. You earn a competitive interest rate, too.

You probably have a few questions, so we hope the links below will provide some answers. If you have more questions please don’t hesitate to e-mail Terina Barnes at invest@equalexchange.coop or call (508) 427-5252

How do I Apply?

The applications are handled by Wainwright Bank, and will be like any other CD application, with the addition that you will sign a loan guarantee.

First we recommend you read through the questions and answers here, and then call David Dolbashian at (617) 478-4000 ext. 351, or e-mail him at ddolbashian@wainwrightbank.com. David will walk you through your application and help answer technical questions about the CD program.

How is the CD different from a regular CD?

It differs in two related ways:

First, the money you invest in this CD is available to Equal Exchange to fund their growth in Fair Trade (rather than condos in Miami or whatever your conventional CD might fund today).

Second, we do this is by having your CD guarantee a loan to Equal Exchange, which means that if Equal Exchange does not repay the loan for some reason – perhaps we go bankrupt – then you may lose some or even all of the money. See below What Risks Am I Taking?

So compared to a conventional CD, you are taking some additional risk of loss, and reaping some additional benefit by directing your money to advancing social justice. The interest rate and other terms are the same as you’d expect with a conventional CD.

What Risks Am I Taking?

Well, unlike most regular CDs, you could lose money. Wainwright Bank is FDIC insured so if the bank collapses your investment is secure. However, as your CD is used to guarantee a loan, if Equal Exchange was to become bankrupt or unable to pay its debts then you risk losing some or all of your money. If, for example, the company did not pay back 20% of the loan then you could lose up to 20% of your CD.

That might make you a little concerned. We understand. Your money is at risk so you’ll want to know Equal Exchange will be prudent with it. To that end you should read the next section about Equal Exchange’s past financial performance.

Tell me about Equal Exchange’s Financial Performance.

Equal Exchange has been in business for over 20 years. We have grown every single one of those years and have been profitable for 16 out the last 17 years. We are a worker-owned cooperative and the largest 100% Fair Trade company in the U.S. We have fully audited financials.

We have never defaulted on a loan, and each worker-owner makes a personal investment in the company. If we make a profit they get a share; if we make a loss it comes out of their pockets. Perhaps that is one reason we’ve been successful.

Finally, if the company is ever sold, all the proceeds are distributed to other Fair Trade organizations. We’re not in business to make anyone rich, not us, not you. We’re in business to offer a fair deal to all and use the power of commerce to change the world for the better. We’d love to have you join us.

Who can buy this CD?

Any U.S. resident or U.S. organization. It could make an excellent gift for grandchildren, or a good way for a church or synagogue to further support their social justice goals. Please tell your friends if you think they might be interested.

Can I buy one for my IRA?

In short, no. The CD is a guarantee for a loan, which means it is not eligible for purchase for an IRA. Sorry.

Why just a 3 year term?

This is a brand new program so to keep costs low we’re just offering one term. We chose three years because it represents the reality in the field for a farmer. If they know they can count on selling their harvest at a Fair Trade price for a few years they to can start to plan for the future: sending a child to school, improving quality, or diversifying their crops.

Of course you can also renew the CD at the end of the term and continue to fund Fair Trade for another three years.

Tell me more about Wainwright Bank.

We are very happy to be partnering with Wainwright Bank, and we could wax poetic for hours about their social justice and community values. Their commitment to these causes are not just words but hundreds of million of dollars of loans. They are undoubtedly the good guys. The best way to learn more is by yourself; we suspect you will like what you learn.

Sounds interesting, but I still have some questions.

No problem, just e-mail your questions to Terina Barnes at invest@equalexchange.coop or call (508) 427-5252

O.K., I’m ready to apply …

Great, give David Dolbashian at Wainwright bank a call at (617) 478-4000 ext. 351 or e-mail him at ddolbashian@wainwrightbank.com. He’ll walk you through the process.

On behalf of small farmers on four continents, thanks, and welcome aboard!