Campaign is on for savers to move to socially responsible cash Isas – and the rates are surprisingly competitive too
You are looking to open a savings account, but would like your cash to be used in a socially or environmentally responsible way rather than financing arms dealing or other dodgy activities. Or perhaps you are angry about the cuts and bankers’ bonuses and want to teach the big banks a lesson by moving your savings elsewhere.
If either of these scenarios strikes a chord, a best-buy guide launched this week should help make it easier to choose the right account. And you might be surprised at the number of credit unions that are now offering competitive interest rates of up to 4%.
The Move Your Money campaign, which began as an anti-Wall Street movement in the US and arrived in the UK this year, has put together what it says is the first comprehensive list of socially responsible cash Isas offered by ethical banks, credit unions and building societies. It says the aim is to “help people choose an Isa that not only offers a good financial return but also puts their money to use in a responsible way”.
The online guide enables people to rank the accounts by interest rate, provider type and minimum deposit. It also tells you whether the account is instant access or one where you have to give notice to withdraw your cash, and if it allows you to transfer money in from existing Isas. In addition, Move Your Money has given each provider an “ethiscore” out of 20.
These are some of the better-paying accounts featured:
Traditionally, credit unions have been excluded from the best-buy tables, but new rules mean they are now able to pay interest on savings.
Many people won’t be aware of the North London Credit Union, based in Enfield, Middlesex, a community-based financial co-operative open to people who live or work in parts of north London (the boroughs of Barnet, Enfield, Haringey and Waltham Forest, and southern Hertfordshire). It has a 12-month fixed-rate cash Isa paying 4% on a minimum deposit of £2,000, or 3% below that, and a 90-day notice account which pays 2.5%.
Meanwhile, the Leeds and Skipton accounts are both five-year fixed-rate Isas paying 4% on a minimum of £1 and £500 respectively.
• 3%-plus Several other credit unions feature in the Move Your Money table, including the No1 CopperPot Credit Union, based in Stockport, which is open to serving and retired police officers, police community support officers, special constables and police staff and members of their family living at the same address in England or Wales. It has an instant access Isa paying a variable 3%.
Erewash Credit Union, open to those living or working in Derbyshire, also has an Isa paying 3%, as does London Mutual Credit Union, which caters for those living or working in the London boroughs of Southwark or Lambeth, and Voyager Alliance Credit Union, which offers financial services to people working in the passenger transport industry in England and Wales.
• 2% to 3% In addition to several building societies (including Nationwide and the Ecology) and ethical banks (Triodos and Britannia, part of the Co-operative Bank) offering products paying at least 2%, the Move Your Money table features a number of credit unions. These include Clockwise, for savers who live and work in Leicester, Leicestershire and Rutland, which offers an instant access Isa paying 2.5%. The minimum deposit required is £1.
Police Credit Union, based in Birmingham, is also featured. Its 60-day notice Isa pays a minimum of 2.5% (in 2011-12 it exceeded this, paying 2.7%). The minimum deposit is £100.
Credit unions will appeal to many because savings are lent to local people and businesses to benefit the community. But at some, such as Clockwise and No1 CopperPot, transfers in of money held in existing Isas are not permitted.
But a government-commissioned report published this week warned that the credit union movement is “not financially sustainable” on current interest rates.