Andrea Hirai admits that she is “quite stingy” with money and hardly has any regular subscriptions.
However, there is one thing she is happy to pay a monthly fee for – even though most people use the service completely free of charge.
Andrea pays £3 a month or £36 a year for her current account – an amount she considers “worth it”.
All major branch banks offer free checking accounts where customers can deposit and withdraw money and make cash transfers to other people.
But Andrea recently decided to switch her account to Triodos Bank and pay a fee for the first time in her life.
The bank’s goal is to help customers use their money in a way that benefits “people and the environment.”
The company tells its customers that it uses its account fees to fund charities, renewable energy and social housing, and that it renounces fossil fuels and weapons.
For Andrea it was worth the money.
“I felt it was worth paying £3 a month on a regular basis to make a positive impact on the planet, rather than spending it on a regular cup of coffee in a disposable cup that only adds to the global mountain of waste.”
The 50-year-old, who lives in Brixham, Devon, says the bank’s app provides updates on the projects it has funded, a feature she likes.
“I can see all the projects it supports in one place on a map. In my district alone, it supports around 30 projects, including a forest school, two solar projects and a dairy farm,” she adds.
“I wanted to know that my money was going specifically to environmental and ethical projects and to see the direct impact it was having,” she says.
Why doesn’t she opt for a free account instead?
She stresses that no bank is essentially free and that banks actually make money, albeit in less obvious ways, such as overdraft fees and penalty fees.
“It’s just not that obvious,” she says.
Although ethical banks often do not offer the best interest rates on products such as savings accounts, banking experts say, some customers have different principles and would still like to use these banks.
“Not everyone is obsessed with getting the absolute best interest rate on their savings. Some people have different principles when it comes to money and those who want to make a difference in terms of environmental sustainability will choose their bank on that basis rather than a big branch giant that is primarily concerned with profit,” says Andrew Hagger of Moneycomms.
“Triodos’ savings rates are decent. They are among the best offers, but in some cases are better than those of some high street competitors,” he says.
Triodos’ easy access account yields 3.45 per cent, compared to 5.2 per cent at Ulster Bank, while Barclays’ everyday savings account yields 1.66 per cent and HSBC’s flexible savings account yields 2 per cent.
“Savers who want to make a positive contribution with their money are willing to sacrifice part of their interest rate,” said Mr Hagger.
It is not the only ethical bank. Both the Charity Bank and the Ecological Building Society are specifically aimed at helping people who want to invest their money with or get a loan from an environmentally friendly organisation.
Other banks claim to pursue environmentally friendly practices and aim, among other things, to become carbon neutral within the next decade and to stop investing in fossil fuels.
The good news, according to Anna Bowes of Savings Champion, is that those who use ethical savings accounts don’t have to make as many compromises as they once did.
“The environmental, social and governance movement has evolved and there is more choice at more competitive prices. You no longer have to sacrifice all your interests to do the right thing and there are some banks and building societies that could be considered ethical and/or green and also some products where the proceeds go to green projects,” she said.
How do you know if a bank is acting ethically?
There is no uniform definition of a bank that is ethical.
Some follow a set of principles or goals that govern their dealings with customers, other businesses and employees, while others try to proactively make a positive impact.
This could be done, for example, by refraining from investing in ammunition, tobacco or gambling. Others, on the other hand, place a greater focus on the climate and, for example, operate a paperless business.
Look for signs of an ethical bank, such as the Good Egg mark, recommendations from ethicalconsumer.org and the British Bank Award for Best Ethical Financial Services Provider.
