Account puts ethical banking in the palm of your hand

ETHICAL bank Triodos will open its first current account for customers this week. The Dutch-owned bank, best known for investing in socially and environmentally responsible projects, has offered Isas and investments to UK consumers for more than 20 years. But this will be its first move into day-to-day banking.

Here, The Mail on Sunday looks at the account and other options for those keen to pursue more ethical finances.

CURRENT ACCOUNTS THE Triodos Bank current account can be opened and operated online – and also by mobile phone app. Account holders can have an overdraft of up to £2,000 and the interest rate on borrowing is 18 per cent (similar to high street banks).

There is no telephone banking and no branches, but you can request a cheque book. The debit card is made from eco-friendly plastic.

There is a £3 monthly fee for the account – which Triodos says is a fair and transparent representation of the cost of banking. It is part of the Dutch depositor protection scheme. This means that in the event the bank fails, customers in Britain would have to apply through a scheme in Holland.

Cash in deposit accounts is protected up to €100,000 (£87,000) but this value will fluctuate with the exchange rate.

For those looking to ditch the big banks, the Triodos current account ranks in first place for its ethical standpoint, according to the Ethical Consumer Research Association (ethicalconsumer.org).

People can register their interest in the account on Triodos’s website and the bank will write in June inviting people to apply.

Action group Ethical Consumer – which rates companies based on their record in key areas, such as the environment, human rights, the arms trade, tax avoidance, executive pay and corporate responsibility – also says Co-operative Bank and its online arm Smile, Nationwide Building Society and Metro Bank should be considered for current accounts.

SAVINGS T HOSE looking for deposit accounts with banks or building societies with a more ethical approach – and not just current accounts – should consider saving with Charity Bank, Ecology Building Society and Triodos.

Other providers that score well are all mutual organisations. This is because they have no shareholders. Among those favoured are Leeds, Coventry, Cumberland, Newcastle, Principality and West Bromwich building societies. The best easy access savings from this group are Coventry’s Easy Access Saver and West Bromwich’s Limited Access Saver at 0.85 per cent and Leeds’s Rainy Day Saver at 0.8 per cent.

By comparison, the best-buy easy access savings account on the market is with RCI Bank at 1.1 per cent. Coventry also has a table-topping cash Isa paying 1.4 per cent a year fixed for three years.

ETHICAL INVESTING SOMETIMES referred to as ‘green’, ‘sustainable’ or socially responsible, ethical i nvestment means choosing funds that seek financial returns but without creating social or environmental harm.

As well as screening out companies and sectors such as oil and mining, tobacco and arms manufacture, many funds actively invest in areas that bring about social change. The ethical fund market is small, with about £13 billion in assets under management, according to the Investment Association, and represents about one per cent of the investment market. Growth has been static in recent years.

But Becky O’Connor, co-founder of website Good With Money, which offers i nformation on ethical finances, believes consumers are interested in knowing where their funds are invested, but a lack of transparency in the market makes this difficult. She says: ‘Most people have values and given the choice, if it was at no cost to them, would prefer to know that their money is funding businesses that have a positive impact.

‘The problem is, many don’t know, because they aren’t told.

‘Many of these funds generate as much growth as standard funds, but their additional benefits are rarely highlighted by the big online brokers.’