The other attraction to investors is the penalty-free monthly cash flow that the clap note provides from the “first hand.” Using the example above, the investor can expect a monthly payment amounting to 10% ÷ 12 (i.e., 0.833%) of the $100,000 face value, or $833.33. Considering that the investment was only $90,000, the monthly cash flow equates to an annualized return of 11.11%, which carries no penalties if he decides to sell the note prior its 24-month maturity date. CDs always attract penalties if the investor pulls out early.