After years of ultra low interest rates, savers are finally being offered better returns on cash savings accounts.
The Bank of England has held the base interest rate to 5.25 per cent in its ongoing bid to bring down inflation. Although this high inflation means that cash will inevitably lose value (even on the best savings rates out there) over time, it’s always a good idea to have a rainy day fund that you can dip into easily in an emergency.
The idea of saving may feel alien to those struggling with the rising cost of living, but even a small amount set aside consistently every month can eventually add up to a healthy pot.
If you care about the future of the planet as well as your own, then interest rates won’t be the only important factor you consider when choosing a cash savings account.
Ethical banks and building societies will not invest in fossil fuels and other destructive industries like tobacco and weapons, and some – like Triodos – go so far as to only lend your money to businesses and projects that are making a positive impact on the planet and society.
Here are our top sustainable instant access savings accounts currently offering the highest interest rates.
1. Tandem Bank
Account: Easy Access
Interest: Variable 5 per cent/gross/AER* (with ‘top-up rate’ – you need to manually apply this, but it’s the click of a button)
Key terms: No minimum deposit. Manage your account online.
Why is it ethical? A digital challenger bank, Tandem aims to be a “greener, more accessible bank for people across the UK”. Tandem guarantees that your savings are never used to fund fossil fuel extraction and production or similar destructive industries. Instead, money held in Tandem savings accounts is used solely to fund its lending products.
Its home improvement loans finance energy-efficient improvements such as solar panels and air source heat pumps, saving people money on energy bills while also helping to save the planet. Tandem’s EPC mortgages reward customers who own energy-efficient homes.
2. Leeds Building Society
Account: Limited Issue Online Access Account
Interest: Variable 4.85 per cent/gross/AER*
Key terms: Minimum deposit £1,000. Can be managed online only. The above interest rate will end on 30 September 2024, when your money will be moved to an instant access account with a lower interest rate.
Why is it ethical? Leeds Building Society says it puts “fairness, transparency and good ethical practice remain at the heart” of everything it does. As a building society it will not invest in fossil fuels and all its buildings run on 100 per cent renewable electricity.
3. Raisin UK
Account: Castle Community Bank Easy Access
Interest: Variable 4.71 per cent/gross/AER*
Key terms: Minimum deposit is £1,000. You can top up your account with the minimum amount of £500 per transaction and the maximum balance you can have is £85,000
Why is it ethical?
Raisin UK enables you to compare savings rates from ‘ethical’ banks. Currently it offers savings deals with Castle Community Bank as well as Sharia-compliant accounts such as Gatehouse Bank. Sharia-compliant banks adhere to Islamic principles, many of which can also be considered ethical values.
The ethical account currently offering the highest interest on Raisin UK is Castle Community Bank, which is part of the Community Finance Network. This is a network of Credit Unions offering ethical financial products. The bank says it offers the same financial products as banks, but encourages and builds financial wellbeing for its members.
4. Yorkshire Building Society
Account: Internet Saver Plus Issue 13
Interest: Variable 4.80 per cent/gross/AER*
Key terms: Online access only, minimum deposit £1. Unlimited withdrawals allowed.
Why is it ethical? Yorkshire Building Society is an official signatory of the UN Principles for Responsible Banking – a single framework for a sustainable banking industry. The mutual has made a commitment to identify and measure the environmental and social impacts of its business activities, set and implement targets where it has the most impact, and regularly report publicly on its progress.
5. Skipton Building Society
Account: Easy Access Saver
Interest: Variable 3.80 per cent/gross/AER*
Key terms: Minimum deposit £1.
Why is it ethical? As well as not investing in fossil fuels, Skipton offsets more emissions than its operations produce. Its partnership with the Yorkshire Dales Millennium Trust will see it plant 30,000 trees from 2021 to 2023. The partnership will also support 400 people from disadvantaged communities to get involved in creating and caring for woodlands.
6. Triodos Bank
Account: Online Saver Plus
Interest: Up to 3.45 per cent/gross/AER*
Key terms: Minimum deposit £1. Three penalty-free withdrawals per year.
Why is it ethical? While the interest rate on its instant access savings account isn’t the highest out there, Triodos – A Good With Money ‘Good Egg’ firm – really is the gold standard when it comes to saving your money sustainably. While you earn interest on your savings, Triodos uses your money to finance projects that are making a positive and lasting impact on society, culture or the environment. It prides itself on being open and transparent about its investments and publishes details of every loan it makes, as well as the positive impact it is making.
Triodos says it increases rates across the board for all its products, not just some, and for all customers – it won’t tempt people in with temporary higher rates that will fall later on.
7. Nationwide Building Society
Account: Flex Instant Saver
Interest: Variable 3.25 per cent/gross/AER* for 12 months
Key terms: After 12 months, Nationwide will move your money to another instant access savings account with a lower interest rate.
Why is it ethical? As a building society, Nationwide must hold at least 75 per cent of its assets in residential property, making it far less likely than its big bank competitors to be lending to unsustainable firms. Its profits are also invested back into the business for the benefit of borrowers and savers (it’s “members”) rather than shareholders. In June 2023, Nationwide handed back £100 each to 3.4 million eligible members after its annual profits rocketed 40 per cent to £2.22 billion.
8. Ecology Building Society
Account: Easy Access
Interest: Variable 3.15 per cent/gross/AER*
Key terms: Minimum initial deposit £25. Save up to £125,000
Why is it ethical? Ecology Building Society is known for its mortgages on eco-friendly new builds and renovation projects. The deposits it holds from savers is used to lend to making Britain’s housing stock more energy efficient. Ecology is a Good With Money ‘Good Egg’ company – this is a mark that is awarded only to companies that make a positive impact in the world.
9. Co-operative Bank
Account: Online Saver
Interest: Variable 2.65 per cent/gross/AER*
Key terms: Only for Co-op current account holders. Minimum £1 deposit. Manage online and on mobile only.
Why is it ethical? The Co-operative Bank is the only bank to have a “customer-led” ethical policy. Taking into account customer views, it takes a strong stance on fossil fuels, climate, labour rights, indiscriminate weapons and animal welfare. However, in 2017 the bank was bailed out by international hedge funds. Although they continue to proclaim it as an ethical bank, for many the sale put a question mark over the integrity of its ethical policy.
* AER stands for Annual Equivalent Rate and it’s a type of interest rate for savings accounts. AER is calculated based on the interest, bonuses and charges on your savings account across a 12 month period. If your AER is variable, the amount of interest you’ll earn can change, either going up or down.
If you’d like to find out more about the above providers, a Which? membership gives you access to in-depth, expert reviews, ‘Best Buys’ and ‘Don’t Buys.’
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