Be Money Smart and Ethical: Move Your Money to an Ethical ISA, now!
April 5th is the end of the Tax Year. Banks everywhere are telling us that now is the perfect time to invest in an Individual Savings Account (ISA). Opening an ISA with an ethical bank provides a great and easy opportunity to both invest smartly and start to change the banking system.
Quite simply, an ISA is a savings account where the interest made on your savings is not taxed. If you shop around, ISAs can offer higher interest rates than ordinary savings accounts too.
Opening an ISA in the next week could bring you huge benefits. On April 5th the deadline date passes for investing this years cash ISA allowance of £5,340, and a new financial year starts. So, if you had £10,000 to save you could put £5,000 in an ISA now and still be able to put a further £5,000 in the same ISA after April 6th (when the allowance for 2012/13 will rise to £5,640). You needn’t worry if you don’t have this kind of money to invest. ISAs allow you to invest a minimum of £1 and with high interest rates they, offer the opportunity for ordinary people to make straightforward investments which let their savings grow. “This time next year Rodney”, and all that.
Another straightforward issue is that people should be allowed a say over where their money is invested. Lloyds Group, Royal Bank of Scotland, and Barclays all invest in arms companies, environmentally detrimental projects, and in propping up dictators. Is this really what we want for our money? The great thing about ISAs is that there are numerous banks and credit unions out there which marry an ethical ethos with competitive rates. Currently, Lloyds offers a rate of 2.65%, Halifax 3.05%, Natwest 3%, and RBS 3%. Compare this with the London Credit Union (3%), Charity Bank (2.5%) and Triodos Bank (2.5%) that offer competitive rates and something that you can’t put a price on: the knowledge that your money is being invested in charities, improving our environment and local community projects.
Similarly, there are financial bodies offering far better customer service than the major institutions. First Direct, Co-operative Bank, and Coventry Building Society top the Which? list for Best Customer Service. Halifax, RBS, and Santander came in the bottom three.
ISAs offer a simple way to make great savings. Moving Your Money before April 6th will enable you to make the most of those savings. But Moving Your Money to an ethical ISA provides not only competitive rates, but also much more: the knowledge that your money is going to projects that help communities not arms companies, as well as giving you far better customer service.
Billions of pounds are saved in ISAs each year. Imagine if all that money was put in banks that work in the interest of individuals and society!
Matt Hawkins works in the transport industry and runs a blog called The Reading List.
Originally published in March 2012 at moveyourmoney.org.uk
