I’ve mentioned before that I have several current accounts with the big high street banks, which I opened for bank incentives, and continue to use to get interest on our money.
A few years ago, I started to think about alternatives to the big banks. What about building societies and credit unions? What happened to ethical savings, and what do people do when they want to get a mortgage to build an eco-house?
Ok, so the last one wasn’t something I started thinking about straight away, but it was pretty handy finding an answer to it just days after my eco-house pipe dream resurfaced.
Building societies
After looking up the best rates for regular savers, I was surprised to find many of them were with building societies including Leeds, Saffron, and others which required residence within a radius of their branches.
I came out of that search with a result – the Marsden BS was nearby, and offered a regular saver at 3.5% AER. (This was 2014, before the base rate fall.) Get that, I resolved… And I did. But it required opening another instant access account with £100, with a lower rate than my current account… ugh.
The upside to that was a percentage ofinterest on the balance donated to a local charity. There was something kinda charming and retro about having to wait for a passbook in the post – I liked this local savings idea! What others are there around here, I thought… that’s how I found the Ecology.
If those folks pinched my business without waving a juicy interest rate under my nose, they must be special!
Actually, I think they are – imagine finding a financial institution with honest-to-goodness, real-life principles. They had a boring but fair minimum interest rate of 1% on their savings products (at the time – although rates have changed and savings products are temporarily on hold at time of writing due to high demand).
They will only lend on property/projects which will benefit the environment or local community. I’m in love!
Local finance
Even better, they’re not that far away, in West Yorkshire. So now I know there’s a real option for Lord Balders and myself to get help in building ourselves a sedum-roofed, self-sustaining straw bale palace.
That probably won’t happen, but the idea of using our money in doing something good for the environment is catnip to the teenage eco-warrior I used to be. Now, I still need to get my head around why they required me to print off and post them a paper application form. That might seem a small thing, but it’s a serious criticism for an ecologically-minded institution!
Credit unions
After that, I was out to binge on small-scale community finance, and located our local credit union.
I can’t say that I’m convinced that a credit union would do much good for someone like me, but the idea of supporting a credit union, which in turn supports those who would otherwise feel forced to turn to payday lenders, is definitely a good one. That’s next on my list.
High-cost credit providers market themselves aggressively to their target market – the less well-off, who are less financially literate and more likely to take what is presented to them instead of seeking out the best financial products. Sadly, these are the people who would benefit most from credit unions – those who are scooped up by doorstep lenders and their direct mailers.
Alternative finance
If only Burnley Savings and Loan (a.k.a. Bank Of Dave) were taking on savers – but their waiting list is currently closed. I love a good underdog alternative to the big banks, but the problem is that their small scale limits their reach. However, their small scale alone actually makes them more of an eco-friendly option than a multi-national conglomerate.
While some of these smaller alternatives wouldn’t exactly be making my money work as hard as it could, the trade-off is the wider payback and of course, the feel-good factor. After all, there are more important things than money!
More ethical finance options
Over to you…
If any of these options are available in your area, would you consider supporting an ethical/ecological financial option?
I am taking part in the Monday Money linky withLynn from Mrs Mummy Penny,Faith from Much More With LessandEmma from EmmaDrew.Info
