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If you have a bit of spare cash and a social conscience, you might be interested to know that you can do more with your money than simply deposit it in the nearest anonymous, money-grabbing bank. There are a number of ways to get a return on your savings and that warm, fuzzy feelgood feeling.
The newest "big idea" is Zopa, an online exchange where people with money they might otherwise put in savings accounts can instead lend it to pre-vetted borrowers who've applied for loans through the website. It doesn't count as social or ethical investing in its usual sense, but it does mean you can bypass big financial institutions in favour of something more direct and meaningful. Approved borrowers get good rates, too, so it's worth checking out if you are in need of a cheap loan.
Zopa is regulated, but it isn't risk-
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free, so don't stake your life savings; the site is aimed at people with extra cash. Lenders decide what kind of borrowers (rated "A" or "B" risk) they are prepared to lend to, and at what rates. All the same, in its first year, Zopa's lending members made an average of seven per cent (before tax), which is better than a building society can offer.
For those who want a more direct connection to a good cause, Triodos Bank is an ethical bank offering normal savings accounts that pay interest and keep your money safe, but also lend cash to vetted good causes. Simpler still, consider banking with the Co-operative Bank, or its online offshoot, Smile. These are banks with an ethical policy who won't lend cash to causes and corporations that don't meet their strict standards.
FIRST POSTED MAY 18, 2006
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