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Ethical banking

If you’re looking for a bank that has similar values to your own, you may want to consider ethical banking. It’s a way of ensuring that you’re not only living by your personal ethical values, but your bank is, too. Read on to find out more about what ethical banking is, the differences between traditional bank accounts and ethical accounts and why you might consider an ethical bank account.

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What is ethical banking?

A financial institution or banking provider that tries to make a positive impact on the world could be considered an ethical bank. That impact could be on society, local communities or the environment, but what they do to be an ethical bank will depend on the bank’s ethics, values and principles and the type of impact they want to make.

Ethical banks have policies in place that prevent them from investing in certain types of companies, such as companies that test on animals, employ child labour or make cigarettes. Ethical banks don’t just prevent money from going into these types of industry, but they also tend to take positive action. Most ethical banks in the UK, such as Gatehouse Bank, a Raisin UK partner bank, promote environmental and social progression.

Why join an ethical bank?

Many people join ethical banks that uphold the same values they have themselves. It’s a way of keeping both your money and your morals aligned. You might consider opening ethical banking savings accounts if you want to be certain that your money won’t be invested in companies you would consider unethical.

 

What's the difference between a 'traditional' bank and an ethical bank?

When you deposit money in any financial institution, you are trusting that financial institution to decide where your money goes between the time you make a deposit and when your money is returned to you. That’s because the bank will lend money and make investments to make a profit on the capital they hold.

The main difference between a ‘traditional’ bank and an ethical bank is which companies they consider investing in. Traditional banks will typically deal with any company they think will make a profit. Ethical banks will ensure that your money is lent to companies that do not negatively affect the society or environment.

Will I still get a competitive rate with an ethical bank?

While some ethical banks might not make as much profit as they deal with a fewer number of businesses, this shouldn’t affect the interest you might be able to earn on a savings account.

Is ethical banking the same as Sharia banking?

Sharia banking could be considered a type of ethical banking. Also known as Shariah, Shari’a or Islamic banking, Sharia banking follows Islamic law. That means your money won’t be used to fund businesses prohibited under Sharia principles, such as alcohol, tobacco or gambling. Through a Sharia savings account, you’ll earn profit rather than interest, as earning interest is against Islamic law.

Where can I apply for ethical bank accounts?

Many ethical banks provide online banking services, and you can also apply for savings accounts from a range of ethical banks at Raisin UK. We offer savings accounts from some of the best ethical banks in the UK, and it’s quick, free and easy to open a savings account online.

Simply register for a Raisin UK Account, log in and apply for the ethical savings account that’s right for you.

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