Ethical Savings Accounts

Finding an ethical savings account

Ethical concerns around savings accounts are comparable to those for other banking services like current accounts or mortgages.

An ethical savings account is one that doesn’t enable the financing of destructive sectors like arms and fossil fuels but instead uses customers’ deposits to facilitate positive social and environmental action. It will also have an ethical approach to tax, pay and gender equality. Some banks and building societies also have pro-active investment policies and actively support positive environmental and social organisations. 

Financial institutions offering savings accounts

In this guide to ethical savings accounts, we've included a range of banks and building societies operating in the UK.  

We’ve included 11 of the UK’s biggest building societies in this research, but to keep the guide to a manageable size, haven't included all c.50+ building societies, or individual credit unions. However, because credit unions are locally focused and only lend to individuals, there is minimal risk of inadvertently funding fossil fuels or arms production with your savings in this type of organisation.

Savings accounts with the big high street banks are included in the guide, along with 'new' digital challenger banks like Monzo and Starling. We've also included a couple of Sharia banks (Al Rayan and Gatehouse). 

With scores ranging from 0 out of 100 to full marks, and lots of brands in the upper-middle range, there are lots of options to switch your hard-earned savings to a more ethical place. 

Types of savings accounts

Most of the companies in this guide offer a range of savings accounts. There are different types of savings accounts, partly dependent on things like access and minimum length of term.

Some of the most common savings accounts are:

• Easy-access accounts: offer flexibility, allowing withdrawals at any time, though interest rates tend to be lower.
• Fixed-term savings accounts (or bonds): require money to be locked away for a set period, typically offering higher interest rates as a reward for reduced access.
• Cash ISAs (Individual Savings Accounts): tax-free savings account, up to a specified limit. We have a separate guide to cash ISAs. 

Many savers choose to save through investments rather than conventional savings accounts. 

We have guides to investment products including stocks and shares ISAs, pensions, and ethical investment funds.

Do ethical savings accounts earn less interest?

Interest rates on more ethical accounts are not necessarily lower than accounts from less ethical savings providers. 

For example, as of March 2025, Nationwide was offering an impressive 6.50% AER on its flex regular saver account, Leeds Building Society was offering 4.8% AER on its regular savers account, and Tandem Bank was offering up to 4.4% on its fixed savers account.

The table below shows interest rate comparisons between some of the highest and lowest scoring companies in the guide and reveals that poor ethics do not guarantee good returns. 

It's important to note that the Bank of England’s interest rate reduction in February 2025 prompted many banks to reduce savings rates as we were finalising our research, so these figures may no longer be accurate. Check the MoneySavingExpert website for regular updates on the best available UK savings accounts interest rates.

Climate change and banks

Banks have faced increasing pressure in recent years to divest from fossil fuels, especially from the most destructive practices like tar sands, ultra-deep-sea drilling, thermal coal extraction, and fracking. Many have created some positive sounding spin in response to this pressure.

However, many of the banks in the guide scored 0/100 under our climate rating. 

Banks which failed to score anything for climate were:

• Al Rayan
• Bank of Scotland (Lloyds Banking Group)
• Barclays
• Cater Allen (Banco Santander)
• Chase (digital bank) (JP Morgan)
• Coutts (NatWest Group)
• Danske Bank
• First Direct (HSBC Group)
• Halifax (Lloyds Banking Group)
• HSBC
• ICICI
• Lloyds Bank
• Marcus (Goldman Sachs)
• NatWest
• Royal Bank of Scotland (NatWest Group)
• Santander
• Tesco Banks (Barclays Group)
• TSB
• Ulster Bank (NatWest Group)
• Yorkshire Bank (owned by Virgin Money, now owned by Nationwide)

Goldman Sachs has earned a particularly dubious honour. It would have scored an impressive -170 in this rating were scores not capped at zero. It audaciously claims to be carbon neutral, despite being one of the most prominent fossil fuel financiers on the planet.

Three Best Buy brands scored full marks for their climate-positive financing, whilst many building societies were rewarded for incentivising home energy efficiency improvements through favourable rates. We discuss this more in the mortgages guide.

Tax conduct of banks

Nearly half (23) of the brands in this guide scored 0/100 for tax conduct, as they either had two or more high-risk subsidiaries located in tax havens, or were themselves domiciled in a tax haven. High-risk subsidiaries include holding companies, investment companies, and other primarily financial services-focused firms.

All of the UK high street banks were found to have subsidiaries in a range of global tax havens, whilst building societies came out with largely clean sheets.

The Channel Islands appear particularly popular with the sector. Gatehouse Bank is domiciled in Jersey, and Shawbrook Bank is held by a company in Guernsey. Barclays, HSBC, Lloyds, and NatWest all operate offshore subsidiaries in the Channel Islands too. Who knew that bankers were such fans of quaint harbours and creamy milk!

According to the Tax Justice Network, the UK and its overseas jurisdictions are collectively responsible for costing the rest of the world $87.9 billion in lost tax per year.

Those who scored zero for tax were:

• Al Rayan
• Bank of Ireland
• Bank of Scotland (Lloyds Banking Group)
• Barclays
• Cater Allen (Banco Santander)
• Chase (digital bank) (JP Morgan)
• Coutts (NatWest Group)
• Danske Bank
• First Direct (HSBC Group)
• Gatehouse
• Halifax (Lloyds Banking Group)
• HSBC
• Lloyds Bank
• Marcus (Goldman Sachs)
• Metro
• NatWest
• Post Office (Bank of Ireland Group)
• Revolut
• Royal Bank of Scotland (NatWest Group)
• Santander
• Shawbrook Bank
• Tesco Banks (Barclays Group)
• Ulster Bank (NatWest Group)

Fair Tax Mark

In contrast to tax avoidance by the big brands, some of the financial institutions in the guide are paying their fair share of tax. 

Of the brands in the guide, three building societies (Coventry, Ecology, and Leeds) had been accredited by the Fair Tax Mark. This means they had been independently verified by the Fair Tax Foundation as paying the right amount of tax and not being involved in tax avoidance.

Rating banks by their lending policies

Nine companies scored 80/100 or above in our new 'lending policy' rating. Five of these were building societies. 

Leeds, Newcastle, West Bromwich, and Yorkshire building societies scored 80/100 as they either had no corporate lending or had detailed exclusions for prohibited sectors. Charity Bank, Ecology Building Society, and Triodos all received additional points as their core purpose was considered to be providing loans to environmental or social projects.

The only reason that Charity Bank did not score higher is because it was less explicit about the sectors that it excluded. Do not let this put you off though; it is implicit from its business model that your money will not fund destructive sectors.

Our current account guide has a more detailed breakdown on how this new 'lending policies' rating and the 'lending & investment' ratings were calculated.

How ethical is Sharia banking?

Islamic savings accounts operate under Sharia-compliant principles, avoiding riba (interest) and relying on risk-sharing models. The most common structure, Mudarabah (profit-sharing), allows depositors to invest funds with the bank, sharing in profits while also bearing any losses. Wadiah (safekeeping) accounts guarantee the safety of your deposit, with banks optionally giving a hibah (gift) instead of fixed interest. Qard Hasan (benevolent loan) accounts function as interest-free loans to the bank, also with optional hibah.

Islamic finance follows ethical lending rules based on Sharia principles, and excludes sectors including alcohol, gambling, tobacco, weapons, and pornography while directing funds toward halal sectors such as real estate, halal trade, and Islamic bonds.

Of the two Islamic banks in this guide, the property finance-focused Gatehouse Bank scores reasonably well whilst Al Rayan sits in the lower end of the table.

Gatehouse scored 90/100 for its lending policies, but was notably fined £1.6 million by the UK’s financial watchdog in 2022 for shortcomings in its anti-money laundering and financial crime controls. In its judgement, the authority noted that “Gatehouse’s customers and investors primarily originated from jurisdictions that posed a higher money laundering risk and some were politically exposed persons”.

Al-Rayan is owned by Masraf AlRayan, one of the largest banks in Qatar. It lost marks under climate and lending policies ratings, as it did not appear to exclude funding to the fossil fuel sectors. Both it and Gatehouse scored 0/100 under our tax conduct rating.

Digital challenger banks

How well do the 'newer' digital or app-based banks perform in our ratings for savings accounts?

Our ratings system places major digital banks like Monzo, Revolut, and Starling in the middle of the score table. 

Currently they are not challenging the more ethical banks and building societies who are at the top of the score table, but they score better in many ratings than the big high street banks.

A higher-scoring digital bank is Tandem. Tandem Bank was founded in 2014 and is one of the UK’s original challenger banks. It claims to be the UK’s first green digital bank, and scores relatively well for its climate action and lending practices. Tandem Bank guarantees that your savings are never used to fund fossil fuel extraction and production or similar destructive industries. Instead, money held in its savings accounts is used solely to fund its lending products: motor finance, home energy efficiency improvement loans, home loans, and mortgages. Around 24% of lending was channelled into green home improvements such as solar panels and air source heat pumps, and loans for low emission or secondhand cars.

Building societies and credit unions

Member-owned building societies and credit unions are not focused on corporate shareholders and can be a great alternative to high street banks like Barclays, HSBC, Lloyds, and NatWest.

Building societies and credit unions are mutually owned organisations, so you automatically become a member if you open a savings account with them. For some, part of their appeal might include the fact that they aren’t all headquartered in London. 

Some operate nationally and others locally, so it’s worth checking what your local area offers.

What are clearing banks?

Some of the smaller, more ethical banks in our guides appear to be using larger banks to access the banking system.

Since our last round of banking guides, Ethical Consumer has increasingly been contacted by readers concerned that their attempts to avoid the 'big four' banks (Barlcays, HSBC Group, Lloyds Group, NatWest Group) are proving harder than they thought. Helen Tucker, for example, wrote recently "I boycott Barclays because of their support for fossil fuels and the ongoing genocide in Palestine. I used to have a savings account with Skipton Building Society until I realised that they use Barclays as their clearing bank. I have closed my accounts with them and lodged a formal complaint (more of a request that they change banks)."

This appears to be mirroring the Barclays boycotts that we saw in the 1990s over its role in Apartheid South Africa. In some of Ethical Consumer's very earliest research into this issue in 1989, we produced lists for boycotters of which banks were 'clearing banks' in their own right, and which needed to use others. And it looks like there is demand that we do something similar now.

The first point to note is that, 30 years later, alternatives have opened up. There are many more ways to move money around than “clearing cheques” and, following a government attempt to create more competition through a new organisation, Pay.UK, there are more ways of accessing the system.

But if you think that the complexity of switching your own bank accounts is daunting, can you image what it might feel like to a bank? For this reason, many building societies and others have stayed with whichever member of the big four they started out with. 

Pushing for change on clearing bank use

Nevertheless, it certainly makes sense for consumers to raise this issue with their own bank. Ethical consumers have been pushing for (say) clothing companies to make sure their supply chains are ethical for years, and banks should be asked this question too. Indeed, many organisations (such as Cambridge University) are looking at reviewing their own banking arrangements in light of what we know about the climate crisis, and it is important that banks themselves are not left out of this conversation.

There is another reason why it makes sense to push ethical banks to consider taking action on this issue. If an ethical bank is paying one of the big four banks for payment services, it is essentially giving money to a key competitor. When the FCA reviewed competition in banking in 2015, it noted that this was one of the reasons why the big four had remained so dominant in the UK.

Now that there are non-bank agencies offering this service (such as Clearbank) surely it makes good business sense for ethical banks to make the leap to one of these?

Lending to the UK government with NS&I

NS&I (National Savings & Investments) is something of a quirk in this guide. 

As a state-owned savings bank, NS&I's core purpose is to raise net financing for the UK government, which helps support the funding of public services. In order to rate its lending policies, we therefore had to consider all financing provided by HM Treasury – no small task.

Its overall ethics may divide progressively-minded savers. On one level, most progressives support public services and would approve of more money being available to grow and maintain them. However, most ethical savers look for strict lending exclusions that restrict funding to sectors like arms and fossil fuels. The UK Treasury clearly funds its own military, and is again consulting on expanding oil and gas licences in the North Sea.

NS&I scores in the middle in our guide, better than the big high street banks. Readers can make their own decision as to whether they invest with it, based on their views on the virtues of the current UK government.

Pay and inequality in the finance industry

The finance industry is one of the most unequal in terms of pay. It has the largest gender pay gap, and also has huge pay ratios, with those at the very top being paid hundreds of times more money than the lowest paid. 

It's no surprise that the big high street banks are often the worst for these types of inequality. 

For example, the pay ratio of the CEO compared with the lowest 25% of employees at HSBC is 283:1. That means the CEO receives 283 times more money. In contrast, the lowest pay ratio we found was 6.5:1 at Charity Bank.

Our separate article on high pay and bankers' bonuses has more detail, including pay ratios and the amount CEOs are paid.

Other types of financial inequality can be seen in gender pay gaps and pay gaps for ethnic minorities. 

Our separate feature article highlights which banks are the worst for pay gaps (spoiler: usually the big high street ones!), and what initiatives banks are taking to change this. 

Who is the Reliance Bank?

The Reliance Bank calls itself “the UK’s 1st ethical bank since 1890.” It says “We prioritise our business lending to organisations delivering positive social impact in the UK.” 

That means it funds organisations that provide health and social care, affordable housing projects, and treatment centres that help people affected by gambling-related harm. It donates up to 75% of its profits to The Salvation Army International Trust, a charity which owns Reliance Bank.

The Salvation Army International, is part of the Christian church whose mission is the advancement of the Christian religion and “to help people whose lives have been affected by emergencies, disasters, poverty, and social inequality.”

American banks offering UK savings accounts

Two giants of American banking have found their way into this guide, via the digital banks Chase and Marcus, the respective offspring of J.P. Morgan Chase and Goldman Sachs.

Both banks sit at the very bottom of the ethical scoretable.

We’ve recently received numerous messages from readers about boycotting US companies in response to Donald Trump and associated individuals and policies. 

Jamie Dimon, CEO of J.P. Morgan Chase, has acted as an informal adviser to Donald Trump, particularly ahead of his second term. The pair appear to have risen above former tensions, which included Trump referring to Dimon as a “highly overrated globalist”. Striking a balance between private cooperation and public distancing is not unusual for Trump, who went on to offer Dimon the position of treasury secretary, which Dimon declined.

Trump’s reliance on Goldman Sachs alumni also raised eyebrows during his first term as US President. Trump frequently denounced the firm as emblematic of elite financial power during his campaign, but went on to appoint former bank executives as treasury secretary and director of the National Economic Council. 

Both bank’s relationships have sparked debates about the influence of Wall Street on political decision making and may add to the myriad reasons that already exist to avoid giving either banks your money.

Clearing bank research by Rob Harrison.