Five questions on: Charity bank

 

What's Charity Bank?

Is it a rebrand for our hated high street banks? No. It's actually an alternative bank that's also a registered charity. The Charity Bank offers savings accounts and then uses the cash to lend to charities, social enterprises and community organisations that find it difficult to get loans from the traditional banking sector.

Is it a credible alternative?

It has been given a massive financial boost this week that gives it greater credibility. It announced that it's getting a £14.5m cash injection from Big Society Capital, the dormant account fund. The cash will invested over the next three years in the bank.

What will that mean for the bank?

The Bank now hopes to attract £190m in deposits from savers by the end of 2018. “We want to become the UK's most admired bank by helping borrowers achieve positive social impacts by using the deposits of socially conscious savers who want a good social return on their investments as well as a financial one,” said boss Patrick Crawford.

Do they just expect people to stash their cash with the bank to salve their social conscience?

It is offering a Cash Isa Third Edition – which was rated by Ethical Consumer as the most ethical offered by any bank – in time for the 2014/15 tax year. The Isa pays 1.5 per cent, which doesn't make it the best on the market, but it's not far behind market-leading offerings paying 2 per cent. Additionally those are fixed rates which lock you in for a year or more, while Charity Bank's Isa just requires 33 days' notice.

So a decent interest rate, and all my cash is used for good causes? Where do I sign up?

To see details of the ethical Isa and the bank's other savings accounts go online to www.charitybank.org/ethical-savings

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

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