Top 6 ethical savings accounts for 2019

Written by Rosie Murray-West on 3rd Jan 2019

Last updated 3 January 2019

Finding a competitive savings rate is no easy task in the current climate, and can be made even more difficult when you throw sustainability into the mix.

Fortunately, there are some ethical alternatives to high street banks that can still produce a decent return.

Nationwide

  • Regular Saver at 5 per cent

Yes, you did read that right. Five per cent is an almost unattainable rate these days, which is why this account comes with so many strings attached. For a start, it’s a regular saver, in which you can put a maximum of £250 in per month for up to one year. This means a maximum total savings pot of up to £3,000 accruing a maximum total interest of £81.25 (based on no withdrawals). It only runs for a year and you must also have a main current account with Nationwide. You can, however, get your money out whenever you like and holders of joint accounts can open one of these accounts each.

Nationwide is the UK’s biggest building society and scores highly for ethics according to both Ethical Consumer and the Good Shopping Guide (ranked in the top ten for both).

Gatehouse Bank

  • 5-Year fixed term deposit at 2.68 per cent (expected rate)

  • 3-Year fixed term deposit at 2.33 per cent (expected rate)

  • 1-Year fixed term deposit at 2.1 per cent (expected rate)

As an Islamic Bank, Gatehouse avoids investing in industries considered unethical under Shariah principles, which in practice are the same as those frowned upon under Christianity. The firm states it will “only invest funds in ethical goods and services and, for example, does not invest in gambling, alcohol, tobacco or arms”. It invests in real estate and construction as well as sukuk, which are sometimes known as Islamic Bonds.

The accounts pay profit not interest because the payment and receipt of interest is forbidden in Islam as money cannot in itself generate money. Instead the company provides an ‘expected profit rate’. If the company feels that the expected profit rate will not be achieved, it will give reasonable advanced notice of the new expected profit rate and customers can close the account immediately with no penalty and will be given the profit they have earned.

The rates on its fixed bonds are competitive. Although they are not at the top of the best buy tables, they are in the top ten accounts.

Newcastle Building Society

  • Help to Buy ISA at 2.56 per cent 

  • Regular Savings Account at 2.27 per cent

Rated highly on a number of ethical and sustainable metrics, including investment, environmental and staffing policies, Newcastle Building Society also offers competitive interest rates across a range of products. These include it’s Help to Buy ISA, which is one of the most competitive in the market, as well as its regular savings accounts. There are a number of catches, though, with the regular savings rate only available for one year and then only on savings of up to £200 per month. Moreover, Southerners need not apply as this if for those in the North East only.

Britannia

  • Fixed Rate Cash ISAs at 1.4 to 1.61 per cent

The Britannia fixed rate ISAs allow you to earn a fixed rate of interest, with a choice of 2 maturity dates. They are suited to those with lump sums to put away, and you can open an account with between £5,000 and £20,000 for the 2018/2019 tax year. No further deposits are allowed after the product has been withdrawn, so if you are depositing less than your annual ISA limit this will restrict the amount you can hold in a cash ISA in this tax year.

Those transferring ISA balances currently with Britannia or another provider can open an account for £1. You can make withdrawals before the account reaches maturity by post or in branch, but you’ll lose 180 days’ worth of interest on the amount you withdraw. Once your account matures your money will be transferred to a variable rate instant access cash ISA. Britannia is owned by the Co-operative Bank, and comes under its ethical policy. Although the company is now mainly hedge fund owned, it claims to continue to invest using a strict ethical code.

Ecology Building Society 

  • Regular Saver at 1.75 per cent

  • Easy access at 0.85 per cent

Ecology building society, best known for its mortgages on eco-friendly homes, also now boasts a range of savings accounts that are rated best buys by Ethical Consumer. The regular saver pays 1.75 per cent a year and savers can put between £25 to £250 a month via direct debit, up to a maximum of £3,000 per calendar year. The easy access account also offers a competitive rate of 0.85 per cent, with an account limit of £75,000. Both accounts are also available to open on behalf of a child or in a child’s name.

Triodos

  • Regular Saver at 1.75 per cent

  • Fixed Rate Cash ISA at 1.3 per cent

  • Variable Rate 33 day notice Cash ISA at 1.15 per cent

  • Junior Cash ISA at 2.25 per cent

Ethical Bank Triodos has launched a number of savings accounts to suit a range of different needs. A selection is shown above, including its highly competitive regular savings account, which allows savers to stash up to £500 per month – more than both Nationwide and Newcastle, and allows up to two penalty-free withdrawals per year with 33 days notice given. The Junior ISA is quite far behind the best rates on the market (3.6 per cent with Coventry BS as at 3 Jan 2019), however it’s backed by solid ethical principles.

 

Sign up to our weekly newsletter

Get better with money, in every way.