This is part of a new series from Good With Money on ‘How to green your ISA’, showing you how to make your tax-free ISA allowance work for the planet and people as well as your pocket.
Given the roller-coaster ups and downs of global stock markets over the past year, it might feel safer to allocate this year’s ISA allowance to cash. And with all the continuing uncertainty, there has never been a greater need to build up that savings buffer.
However, with Covid-hit economies across the world continuing to struggle, bank base rates remain low – and therefore so do cash savings rates. So finding a competitive rate on your Cash ISA is no mean feat and could be even more difficult if you also want to ensure your cash is being used for good rather than simply saving with any provider.
Fortunately there are some good alternatives to the big high street banks that can still offer a competitive, if a little uninspiring, return. On the green and ethical scale, they range from stand-out social and environmental pioneers, to member-owned institutions such as building societies, to neutral players that are simply more attractive than the Big Four banks, which remain driven by shareholder value and propped up by fossil fuel investments.
Sadly these days there are few cash savings rates that won’t later be eroded by inflation. However, unlike stock market investments which can rise and fall in value, cash ISAs come with steady interest rates and also offer deposit protection from the Financial Services Compensation Scheme.
Below, we round up the best 5 providers for a Good Cash ISA this tax year. And if don’t fancy locking your cash into an ISA, all the providers below offer good rates on general cash savings products too.
Ecology Building Society
- Ecology Cash ISA 0.30 per cent
Regular Saver at 0.80 per cent
Easy Access at 0.10 per cent
Ecology Building Society uses its savers deposits to lend out as eco-friendly mortgages for new-builds and renovation projects with the ultimate aim of helping make Britain’s housing stock more energy efficient.
Ecology has a Good Egg mark from Good With Money, awarded only to companies that make a positive impact in the world.
- Variable Rate Cash ISA up to 0.2 per cent
Junior Cash ISA at 1.5 per cent
Regular Saver at 0.05 per cent
Ethical Bank Triodos, which also has a Good Egg mark from Good With Money, uses the money its savers deposit with it to lend out to real economy businesses making a positive environmental, social or cultural impact on the world. Offering stock market investments, crowd-funded Innovative Finance ISAs (IFISAs) as well as an ethical current account, Triodos is a true leader in the field of ethical personal finance.
Nationwide Building Society
- One year triple access ISA 0.25 per cent
- Fixed rate ISAs offering up to 0.35 per cent
Nationwide is the UK’s largest mutual, meaning it’s owned by and run for the benefit of its members. Because of the way it’s run, it says, it’s free to reinvest more profits into products and services that benefit members, rather than being driven by shareholders. It says doing the right thing by its members is at the heart of what it does.
- One year fixed term Green cash ISA, Shariah principles 0.45 per cent
An Islamic Bank, Gatehouse avoids investing in industries considered to be 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.
Additionally, for every Green Saver account opened or renewed, Gatehouse will plant a tree in a UK woodland on the saver’s behalf.
Under Shariah principles, interest cannot be earned but profit is generated instead. The profit shared is the expected profit rate at the time the account is opened. To date, Gatehouse has always generated and paid its customers the expected profit rate. Find out more about how it works here.
The Co-operative Bank
- Britannia Fixed Rate Cash ISA up to 0.2 per cent
- Online Cash ISA 0.15 per cent (for current account customers only)
The Co-operative Bank (which also owns Britannia), a long-term player in the ethical personal finance market, has come under fire in recent years due to a number of structural and management changes and financial difficulties. However, it says it remains committed to its strict ethical code as well as its aims of building a greener future for young people (better than net-zero), co-operation for the nation, and inspiring others by developing a target-driven sustainability strategy with co-operative values and ethics at its heart.