Got a question about your savings? Email in and we’ll get one of our experts to reply. Anna Bowes, co-founder of Savings Champion, has given her guidance to a reader below. If you have a question for our experts, email us at money@inews.co.uk.
Question: I am currently saving for my children – both in their early twenties – in order to help them with house deposits. I know they are both very “green” – and keen on making sure they live ethical lifestyles. Neither of them flies very often, and neither drives. In keeping with that spirit, I feel like I should try and deposit their money with a bank that invests its money in green investments. Is it possible to do this and still get a good return?
Answer: The good news is that as the ESG (environmental, social and governance) movement has developed, there is more choice at more competitive rates.
You no longer need to give up all your interest 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 are used for green projects.
For example, RCI Bank’s E-Volve account is a 14-day notice account which is currently paying 4.80 per cent. It’s not market-leading as you can earn up to 5.20 per cent on an easy access account.
You need to give 14 days notice on this account, but it’s pretty competitive and all funds deposited will be used primarily to fund pure electric vehicles and charging facilities – but will also look at opportunities to expand into other environmentally sustainable transportation projects.
NS&I and Paragon Bank both offer a Green Bond – which in both cases is a fixed rate 3-year bond. NS&I is paying 5.70 per cent AER and Paragon is paying 4.95 per cent
Tandem Bank prides itself on being green. It says it was built to make it easier for people to live a greener lifestyle. It says that the money you save with them is used to help more homeowners make greener choices, from financing solar panels to energy efficient windows. That said, the bank also lends for more usual purposes such as debt consolidation, home improvements and to private landlords, so there’s no specific product that guarantees what your cash will be used for.
The Ecology Building Society also claims to be “building a greener society”. It says it’s a “building society dedicated to improving the environment by supporting and promoting ecological building practices and sustainable communities”. It says it’s a specialist mortgage provider for properties and projects that have a positive environmental or social impact.
And of course there is Triodos Bank – which is an ethical bank rather than specifically green but could be something that appeals to your daughters.
Gatehouse Bank offers a range of Woodland Savers which means that a tree will be planted for each account that is opened and funded with a minimum of £1,000. The provider itself is a sharia-compliant bank so by its very nature it is an ethical bank as it invests your money in sharia-compliant investments.
In summary, there are plenty of options for you to look at – how green you want their accounts to be is down to the individual, but there should be something for them.
