4 Ways Socially Responsible Banks Are Good for You and Your Wallet
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If you buy local to support neighborhood businesses, avoid shopping at stores known for paying their workers poorly or protest projects criticized for being environmentally harmful, you might want to make sure your bank accounts are also supporting your values.
A dozen U.S. banks have proven their commitment to upholding social and environmental values by becoming B Corporations, joining the Global Alliance for Banking on Values (GABV), or taking both steps. B Corporations are for-profit businesses that have been certified by the nonprofit B Lab for upholding high social and environmental standards.
Becoming a customer at one of these banks doesn’t mean you lose traditional banking services, and in fact, your deposits become a way to show support.
Here are four reasons to choose a socially responsible bank, especially a certified B Corp or GABV member bank.
» See our list of socially responsible banks
1. Your money supports your causes
Your bank accounts automatically support causes you care about — and your money avoids industries or projects that you might be against, such as the Dakota Access Pipeline. Your money is still yours when you need it.
"You can sleep well at night knowing" your deposits aren’t supporting oil or gas pipelines, says Andrei Cherny of Aspiration, a B Corp-certified online investment firm that offers a cash management account.
“Your bank accounts automatically support causes you care about.”
If you want specifics on how a bank has helped people and the planet, you can find impact reports on many B Corp and GABV member banks’ websites.
2. Your deposits are insured
All banks and credit unions in our list of socially responsible financial institutions, as well as most community development financial institutions, have federal deposit insurance either through the FDIC or NCUA. If banks go bankrupt, up to $250,000 in your checking or savings accounts stays safe. Beyond that, B Corp and GABV member banks make staying in business a priority.
"We have to stand up [an economic] model that tests well," says Kat Taylor, co-founder and co-CEO of the B Corp-certified and California-based Beneficial State Bank. “We don’t want the naysayers to say, 'Sure, you can do all that goody-two-shoes work, but you’ll never compete in the marketplace.'"
Another financial activity that can increase your social impact is socially responsible investing, but as with any investing, you risk losing money.
» Explore a related activity: socially responsible investing
3. You'll find lower fees, higher rates
Many of these banks have lower checking fees and higher rates for savings than big banks. At least six of the 14 financial institutions on our roundup have free checking, and three waive the monthly fees for basic checking if you enroll in electronic statements. Savings rates range from 0.01% to 1% annual percentage yield, and about half of the banks have rates for five-year certificates of deposit above 1% APY.
In contrast, the four biggest national banks charge $10 to $12 for basic checking and generally require direct deposit or a minimum balance to waive those fees. Interest rates on their basic savings accounts tend not to rise above 0.01% APY.
"Being with a fair and transparent bank reduces the risk that you’re going to be sold a bunch of products that don’t benefit you, that are overpriced" or that have hidden fees, Taylor says.
» Read up on ways to make your investments and donations uphold your values
4. You'll get feel-good extras
New York-based Amalgamated Bank’s Give-Back Savings matches half the interest you earn from its 0.70% APY and lets you choose where to donate the money from a list of organizations. Another New York bank, Spring Bank, and Minnesota’s Sunrise Banks also feature accounts in which money is donated based on how many debit card transactions you make or dollars you save. Customers can choose from a list of charities.
“It’s hard for people to imagine that they’ll have a bank account that ... helps them do good in the world.”Andrei Cherny, CEO and co-founder of Aspiration
Aspiration provides an optional daily spending tracker that gives you a personal impact score based on how much your purchases support sustainable companies. Businesses also have impact scores, based on thousands of data points such as customer satisfaction, job safety, employee pay, greenhouse gas emissions and renewable energy use.
"Sometimes it’s hard for people to imagine that they’ll have a bank account that ... helps them do good in the world," Cherny says.
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