The best savings deals and bank account for the eco-conscious

More than a half of Britons claim it’s important to them to be able to make greener financial choices, according to new research by RCI Bank.

Despite this, three quarters haven’t tried to make their finances greener over the past year and more than a third say they don’t think it is currently easy to make green financial choices.

The research found that of those who have tried to make their finances greener over the past 12 months, 27 per cent had opted to put money in green savings accounts.

Furthermore, 31 per cent had researched what their banks invest in to make sure they’re ethical, while 14 per cent opted for a green current account.

Tafari Smith, head of savings at RCI Bank said: ‘Our findings reveal both an appetite for green finance but also some barriers when it comes to accessibility and consumer priorities.

‘Banks need to ensure it is easier for their customers to make greener financial decisions that have a positive impact on the planet.

‘This feels particularly important given the current environment and economic pressures, when perhaps making more sustainable financial choices isn’t at the top of people’s agenda.’

This is Money decided to take a look at all the green savings products and current accounts on offer at the moment. Here’s our pick of the best options currently available. 

Best green easy-access deal

Savers looking to combine green credentials with a top rate could consider Tandem Bank’s Instant Access Saver paying 1.1 per cent.

By opting to save via Tandem you’ll be helping to support Tandem Bank’s green lending initiatives, with the aim of helping to make UK homes more sustainable and environmentally friendly.

This is an extremely competitive return – only a three other providers pay more than this across the entire market.

Cynergy Bank and Zopa Bank both pay 1.2 per cent, while Chase Bank has recently launched a linked savings account paying 1.5 per cent for its current account customers.

Tandem savers can set up an account with as little £1 and deposits are protected up to £85,000 by the Financial Services Compensation Scheme (FSCS), which doubles to £170,000 in the case of joint accounts.

However, although it uses savers’ cash towards green loans, it’s also worth noting that it provides bespoke, high value mortgages for UK residents, expats and foreign nationals in the UK and abroad.

You therefore cannot be entirely certain 100 per cent of your cash is going towards a green cause.

An alternative therefore is a 0.6 per cent deal offered by Ecology Building Society which helps fund properties and projects it feels respect the environment.

You can find out more about the projects it is supporting here.

Best green notice account

Notice account offer savers a halfway house between an easy-access and fixed-rate deal.

They enable savers to withdraw their funds following a notice period, typically ranging between 14 and 120 days, but can sometimes offer savers a better return than they might otherwise achieve with an easy-access account. 

RCI Bank’s E-Volve Savings 14 day notice account paying 0.95 per cent is our pick for the best green deal on the market at present. On a £10,000 holding that will earn you £95 after one year. 

As the name suggests, savers must give 14 days notice when withdrawing funds from the account meaning it falls just short of being an easy-access deal.

It also offers a 95 day notice account paying 1.1 per cent, which could appeal to savers prepared to wait 95 days to regain access to their cash.

RCI Bank is car maker Renault’s global banking group and money in the account is protected up to £85,000 via the Financial Services Compensation Scheme.

RCI Bank’s new savings product will enable savers to put their money towards supporting greener transport and mobility in the UK.

Savers cash will primarily be used to propel the switch to electric vehicles, with deposits being used for the financing of EVs and charging infrastructure.

An alternative for savers is offered by the agricultural bank, Oxbury. It directs savers cash towards supporting the rural economy by providing loans and credit to farmers.

Oxbury Farm Loans are tailored for a range of farm needs including Carbon Reduction and Renewable Energy, Farm Infrastructure Improvements, Land Purchase, and Rural Diversification Projects.

Its 35-day notice account pays 0.66 per cent, whilst its 95-day account pays 0.9 per cent.

Savers need a minimum of £1,000 to begin and can deposit up to £500,000 into the account – albeit with a maximum afforded protection of £85,000 by the FSCS.

Best fixed-rate green savings deals

Gatehouse Bank is offering a range of fixed rate deals designed to help grow woodlands across the UK.

For every account opened or renewed, the bank promises to plant one tree.

Its one-year deal pays 2 per cent, which is only 0.05 per cent less than the market leader and among the four best one year deals currently available.

Someone depositing £10,000 in this account will earn £200 in interest over the course of one year. 

It’s also worth noting that its five-year deal is currently the best deal on the market paying 2.5 per cent. It also has a market leading 18-month deal paying 2.05 per cent. 

Its two-year and three year deals pay 2.15 per cent and 2.2 per cent respectively, both of which make our independent best buy league tables.

Savers will need at least £1,000 to get started and thereafter can deposit up to £1,000,000 into the account- albeit with only £85,000 protected by FSCS per individual.

Tandem Bank is also offering some competitive fixed rate deals. Its one-year deal pays 1.8 per cent and its two-year deal pays 2.1 per cent.

By opting to save via Tandem you’ll also be helping to support Tandem Bank’s green lending initiatives, with the aim of helping to make UK homes more sustainable and environmentally friendly.

NS&I’s green savings bonds are another option for green fingered savers. Its three-year fixed rate deal pays 1.3 per cent.

Despite better returns on offer elsewhere, NS&I’s account may well attract eco conscious savers.

The bonds will help finance the Government’s green spending projects designed to tackle climate change and help make the UK greener and more sustainable.

Green projects like zero-emissions buses, offshore wind and innovative low-carbon technologies will be eligible for funding, along with programmes to help Britain adapt to changing climate like improved flood defences.

Savers need £100 to open an account and can deposit up to £100,000 all of which is protected by the Treasury – rather than just £85,000 via the FSCS.  

It’s worth noting that the agricultural bank, Oxbury, has a one-year fixed term bond paying 1.8 per cent, and a two-year deal paying 2.05 per cent, if you’d like your money to support the rural economy.

For a particularly eco-conscious saver it also offers its Forest saver which directs saver’s interest towards planting trees on British farm sites to mitigate their carbon footprint as a return for their investment.

But just bear in mind it currently offers no interest in return and will lock your money away from one year.

Best green cash Isa

For those looking to shield the interest they earn from their savings from the taxman, Ecology Building Society is offering a competitive easy-access cash Isa deal paying 0.8 per cent.

Since 1981 Ecology has lent to over 3,500 projects, supporting individuals, charities, environmental businesses and community-led housing organisations to realise their sustainable living ambitions.

In 2020 alone, it lent £39.3 million to support 230 sustainable properties and projects.

Although 0.8 per cent isn’t the best deal on the market – Cynergy Bank is paying 1.05 per cent – Ecology’s offer still features high up our best buy table.

For those prepared to lock their money away for a period of time in exchange for a better return then Gatehouse Bank is offering a host of best buy fixed rate cash Isa deals. 

Its one-year cash Isa deal will pay you 1.4 per cent and its two-year deal will pay you 1.75 per cent.  

The best green current account?

When it comes to choosing a green provider to bank with you need look no further than Triodos Bank.

It sees itself as the most socially responsible UK bank and champions the concept of sustainable banking, which it defines as using money with conscious thought about its environmental, cultural and social impacts.

The UK arm of the Dutch-founded bank led by environmentalist, Bevis Watts, promises only to lend on projects that make a ‘positive impact’ for people and the planet.  

Triodos customers’ money goes to a whole range of projects including charities, community schemes, care homes, social housing providers, organic farmers, homelessness programmes and renewable energy.

It publishes details about these organisations on its website so its customers can see where their money is going.

Last year, Which? and Ethical Consumer ranked Triodos as the most sustainable savings account provider. 

The ranking was based on publicly available information about how they use savers’ deposits, the environmental impact of the industries they fund, and what the bank or building society was doing to reduce this. 

Much of Triodos’ UK growth has come through its current account offering, which it launched in 2017.

Triodos has stood out over recent years for its customer retention, which can be observed from the official current account switching figures.

Whereas many of the more established names have lost far more customers than they have gained using the seven-day switching service, Triodos has consistently enjoyed one of the highest ratios of net customer gains.

The latest figures revealed that Triodos enjoyed a net gain of 1,128 customers having only lost 81 customers over the course of three months – lower than any other competitor – suggesting it has a better retention rate than any other bank.

This is perhaps all the more surprising when you consider that Triodos’ current account customers pay a £3 monthly fee.

The bank justifies this by arguing that most banks fund free accounts with hidden fees and high overdraft charges – often with financially vulnerable customers footing the bill.

While many banks charge overdraft rates of 39.99 per cent, Triodos’s overdraft rates are held at 18 per cent.

To put that in context, a Triodos customer who is overdrawn by £500 for 30 days will be charged £6.83 whilst those who face rates of 39.99 per cent will be charged £13.99.

To cap of its eco credentials it also offers one of the UK’s most eco-friendly debit cards made from renewable resources such as plant leaves and corn. It’s biodegradable and recyclable.