Each month we will provide an update on a variety of deposit rates available on the market. Ellie has provided some background on why we believe this to be a valuable service.
If one of your New Year’s resolutions is to organise your finances or if you’ve been hearing about the recent increases in savings rates then Ethical Futures is here to help! One of our own resolutions is to continue improving the service we offer to our valued clients and our plan for 2023 is to provide you with updates on the best deposit rates available at the beginning of each month.
As clients, or potential clients, of Ethical Futures we are sure that it will be important to many of you to find the most ethical savings account, as well the best savings rates so we have pulled together a list of some of the banks that you may wish to keep an eye on.
Each month we will publish the top 5 savings rates across the UK market for instant access accounts, notice accounts, and 1 year and 3 year fixed rate accounts. We will also include rates from what we consider to be the 4 key ethical savings providers currently in the UK market.
This is only a guide and we would recommend that you do your own research before placing money with any provider, especially if there are any issues that are important to you. Your ethical values are deeply personal and as with the investment market there are many different variations on what is ethical or sustainable.
Specialist Ethical Banks
These names are probably well known to most Ethical Futures clients and we will include these rates each month:
- Co-operative Bank – “the original ethical bank”.
Founded in 1872, the Co-operative was the first bank to introduce a customer-led Ethical policy focusing on three areas - Planet, People and Community. They are committed to being an ethical employer, as well as sustainable and carbon neutral. The bank has not invested in fossil fuels since 1998 and will not invest in oppressive regimes, unethical labour practices, or anything that contributes towards animal harm.
Founded in 2002 to support charities and social enterprises with loans and to invest people’s savings ethically, Charity Bank won the Savings Champion Awards for ‘Best Ethical Provider’ of 2022.
Ecology will use your savings to make a positive environmental impact whilst giving a fair financial return. The bank was established in 1981 as a building society to help finance environmental building renovations and support sustainable development. Ecology has strong principles and is based out of an eco office and gardens in Yorkshire. They have committed to fair tax and fair pay systems.
A leading expert in sustainable banking founded in Netherlands in 1980. This bank is now available across Europe, including the UK subsidiary established in 1995. Your money will be used to finance projects like renewable energy, sustainable farming and education as well as providing funding to charities. Triodos strictly rules out financing fossil fuels, fast fashion, armaments and tobacco.
Building Societies
Also known as Mutuals, Building Societies are owned by their members and run for member benefit rather than for shareholder profit. Members can have a say in how things are run and Building Societies are frequently used to benefit the local community.
Two of the ethical specialists noted above are buildings societies and one of most prominent in the UK is Nationwide. Nationwide has been around in some form since the 19th Century, they are known for their community grants and charity partnerships and also give 1% of pre-tax profit to charity and have been carbon neutral since April 2020.
Sharia Banks
Islamic law (Sharia) has a number of rules concerning banking, and finance. One of the key principles is that Islamic banks cannot charge or pay interest and must comply with core ethics by not investing in gambling, alcohol, tobacco, armaments, pornography and other commodities contrary to Islamic values.
Established in 2007, Gatehouse Bank takes a Sharia, ethical and socially responsible approach. They offer Woodland Saver accounts, which support the creation of new woodlands in the UK by planting a tree for each account that is opened or renewed. Gatehouse Bank has been a certified carbon neutral business since 2021.
Previously the Islamic Bank of Britiain founded in 2004, Al Rayan Bank was purchased by Masraf Al Rayan in 2010 is now a UK subsidiary of the second largest bank in Qatar.
BLME was launched in 2007 and is sponsored by Boubyan Bank based in Kuwait. The bank deals in Wealth management, real estate and Savings and is now based in Dubai as well as the UK and listed on the NASDAQ Dubai.
Digital Banks
As there are no physical branches and less paperwork, digital banks are often touted as the “greener” option. Many of these banks are newer to the market and do not have the same connections and investment in oil, armaments, tobacco etc. as the traditional mainstream banks. These banks often focus on innovation and technology and appear keen to promote change and development in the finance industry. You will need a compatible mobile phone or digital device to access these accounts.
Founded in 2014 as the UK’s first app-based bank and the first digital-only bank to be granted a regulatory license. Atom Bank state that they want to change the industry for good and “improve things for our customers, our people and the world around us”.
Paragon Bank deal in savings and specialist lending, the bank was founded in 1985 and is now part of the FTSE 250. The bank has been working on improving its sustainability credentials since 2003, and was the first UK bank to launch a successful Green Bond in 2021. At time of writing Paragon offer a Green 3 Year Fixed Savings account (4.30% AER) which uses money to invest in green initiatives.
Tandem Bank was first established in 2014 to create a greener digital bank providing sustainable ways to save. It has grown since purchasing Harrods Bank in 2018 and now offers Savings, mortgages and green home improvement loans amongst other products.
You might also consider placing your money with NS&I which offers 100% secure savings backed by the UK Treasury. Premium Bonds are offered in return for lending money to the UK government and this also now includes the Green Savings Bond issued as part of the government’s drive towards sustainability.
Note on FSCS Protection
Eligible deposits are protected up to a total of £85,000 by the Financial Services Compensation Scheme (FSCS). This applies per person per bank (£170,000 for joint accounts).
The exception to the above is NS&I investments. They benefit from greater protection levels. NS&I savings and investments have the backing of HM Treasury. They guarantee 100% of everything you invest in NS&I, not just £85,000.
We hope you that you found this blog post and the monthly rate updates useful. As always, if you have any questions then please get in touch and if you think you could benefit from a cash management strategy for larger deposits then we would be delighted to help make your money change your world!
It is important to take professional advice before making any decision relating to your personal finances. Information within this article does not provide individual tailored investment advice and is for guidance only. We cannot assume legal liability for any errors or omissions it might contain. Ethical Futures llp is authorised and regulated by the Financial Conduct Authority.