One way to make banks behave

One of the biggest shocks to emerge from the banking crisis were some of the strange and risky investments the banks were chucking savers’ money into. With every financial catastrophe — Ireland’s burst property bubble, the US sub-prime mortgage market — Britain’s banks would sheepishly put their hands up and admit how much they’d put in.

Now the industry is starting to listen to calls for banks to become more transparent about their lending. But ethical banks point out they’ve been doing so for years.

Dutch bank Triodos (triodos.co.uk), for example, not only exclusively lends British savers’ money to UK businesses, it publishes the name and address of every firm and organisation it lends to (knowwhereyourmoneygoes.co.uk).

Its savings rates don’t top best-buy tables, but they are reasonable and, financing only projects with social and environmental benefits, customers are flocking to Triodos. Last year, its number of customers internationally jumped more than a fifth to 279,000.

Triodos’ Online Saver Plus account pays interest at two per cent. It allows three withdrawals a year, but charges a penalty on more than that. The minimum deposit is £1 and the maximum is £250,000. Its cash ISA also pays two per cent. And all of the banks’ customers are invited to visit the projects their deposits fund, such as the UK’s largest solar panel roof, powering the music at Glastonbury’s Worthy Farm, plus beauty chain Neal’s Yard Remedies in Covent Garden and Hackney recording destination, The Premises Studios.

Triodos also offers Charity Saver accounts where it donates 0.25 per cent of the average annual balance to charity partners like Friends of the Earth, the Fairtrade Foundation, the Soil Association or Amnesty International. Its Ethical Savings Bond, running for two years, pays out 2.75 per cent, or 3.25 per cent over three years and 3.75 per cent over five.

Another ethical bank, The Co-operative (co-operativebank.co.uk), which also lends based on socially responsible aims, pays 0.25 per cent on its instant access Smart Saver, but a more generous 3.3 per cent on a one-year fixed term deposit.

“Our mission is quality of life, and human dignity. No other bank can say that,” Triodos’ managing director Charles Middleton, said at its AGM last month. This might sound like fluff, but it’s hard to think of the boss of any other High Street banking presence even uttering the sentiment.