Were you aware that ethical banking can help you save money while giving back to your community?
When using a traditional bank, you’re directly contributing to wasteful projects, such as fossil fuel investments. Because many people are unaware of their options, they end up sticking with the same banks they’ve always used.
However, ethical banks make it easier to save money while living sustainably.
Ethical banks care about their customers, so they provide many services and benefits you can take advantage of. You can also find them just as easily as you can a traditional bank.
To save you some time, we’ll cover everything you need to know about ethical banking, including its benefits and choosing a bank.
So what is ethical banking? Read on to find out!
The Main Idea of Ethical Banking
Ethical banking revolves around several practices that build relationships with customers instead of profiting from them. Because of this, many ethical banks don’t end up profiting much, but they have larger customer bases.
If you look at many banks, you’ll see that they often have low interest rates and charge outrageous overdraft fees. However, ethical banks include higher interest rates and give more leeway with overdrafting.
For example, Huntington Bank offers 24-hour protection on overdrafts. Whenever a customer overdrafts their account, they’ll have an entire 24 hours to bring their balance above $0 before getting charged an overdraft fee.
On the contrary, many other banks hit their users with instant overdraft fees of anywhere between $25 to $40 depending on which bank it is. This is an unethical practice as it doesn’t make customers feel comfortable when withdrawing or spending money, especially if their accounts are low.
Characteristics of Ethical Banking
Some of the best ethical banks do a variety of things much differently than traditional banks. As a result, you can quickly find ethical banking options in your area by looking for a few key characteristics.
If you look at a bank’s policies, you can find out if they’re an ethical bank based on how they treat their customers and whether they’re going green. For example, when a bank has overdraft protection policies, you can expect the bank to be ethical.
Here are some of the main characteristics of ethical banking:
Many traditional banks don’t care about who users their platform because they can get money out of them in one way or another. However, ethical banks care about their customers, so they screen customers before allowing them to open accounts.
This ensures that the customers are ethical, which helps the bank maintain a positive reputation. Having financially sound customers will also prevent the bank from having to charge them if they did something like an overdraft.
Another thing that sets ethical banks apart from traditional banks is their community involvement. Ethical banks contribute to fundraisers, sponsor events, and often make scholarships.
While any bank can introduce ethical practices, those that are truly ethical are consistent. The best ethical banks maintain their practices at all times and never introduce schemes to earn more money from customers. They also stay active in the community.
Many ethical banks are going green by avoiding fossil fuel investments. When looking at ethical banking options, you can tell that environmentally friendly banks will help you because they never invest in fossil fuels, even if it’d mean earning profits.
How to Choose an Ethical Bank
Living sustainably and choosing an ethical bank isn’t a difficult process, especially after having a better understanding of what an ethical bank is.
When you’re ready to leave traditional banking behind, you’ll need to know what to look for in an ethical bank to ensure you can build a strong relationship with them.
You can find the best ethical banks by going through these steps:
Look at Track Records
If the bank has a positive track record of being consistent and investing in their community, they’d most likely be a good bank for you. Look online for articles on a bank to learn more about the things they’ve done.
Reading a bank’s policies is another effective way to determine if they’re ethical. If you go through their policies and see things like large fees and low interest rates, stay away from them. Look for banks that give their customers room to grow and build wealth without paying large fees.
See How Transparent the Bank Is
The best ethical banks are transparent with their customers with what they invest in and donate. If you’re interested in a bank but can’t find any information about what they do with their money, living sustainably would be much harder. You also wouldn’t be able to trust that they’re ethical.
Read Customer Reviews
The last thing you can do to make choosing an ethical bank easier is read customer reviews. Customer reviews are highly effective because you’ll learn about a bank from others that have used their services. If you see that most people enjoy the bank’s services, you can expect to have a positive experience.
Get Involved with Ethical Banking Today
After reading this article, you no longer need to ask, “What is ethical banking?” If you’re tired of paying large fees and complying with strict policies, we encourage you to look for ethical banking options as soon as possible.
Before you withdraw all your money, start looking for banks in your area. You can also find online ethical banking options, which provide similar services. From there, you can start going green while enjoying the many benefits that ethical banks offer.
To learn more about ethical banking, check out our other articles!