Put your money where your heart is

Put your money where your heart is

To most people, fair trade means bananas or coffee. But you can now buy a Fairtrade savings account, where your money is only used for lending to ethically approved projects from a wind farm in Essex, to a Bristol-based clothing co-op that employs 500 workers on fair wages in India.

Fairtrade Fortnight begins on Monday, and Triodos - a bank dedicated to ethical finance - is trying to entice savers into its Fairtrade Saver account. If you're interested only in top-paying accounts, turn to our consumer test on page 6. But if you can stomach lower interest rates in exchange for knowing that your money is going unambiguously to funding worthwhile enterprises, then these may be for you.

"It's a way for people to connect their money with their own interests and values," says Triodos spokesman, James Niven. "It's something tangible. They are conventional accounts in every other way, except with the big difference that it's completely transparent where the bank is lending. There is a strong demand from people who want to know exactly how their money is being used."

The Triodos Fairtrade Saver account offers 2.62% with 33 days' notice. With longer notice periods and bigger deposits, there are higher rates, rising to 4.33% for £100,000 deposited for a year in the saver account.

Among the ongoing fair trade projects financed by Triodos is Bishopston Trading Company, a clothing co-operative with five branches in the west of England, using fabrics.....continued below

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made from organic cotton that have been woven in Tamil Nadu in southern India. It employs 500 people under fair-wage conditions.

There are other providers of ethical accounts. The biggest is the Co-operative Bank, which also has a higher rate of interest with its instant access smart saver offering 4.75%.

The Co-op will not lend to companies engaged in the abuse of human rights, the arms trade, animal cruelty, tobacco or which are damaging the environment. It makes a virtue of having turned down more than £700m-worth of business on ethical grounds. It is also a shareholder in the Unity Trust Bank, set up by the trade unions in the 1980s, specialising in serving unions, charities and social enterprises. It has launched a £50m "social economy fund" to provide finance for charity and voluntary-sector projects.

Yorkshire-based Ecology Building Society was also set up in the 1980s, originating in a meeting at a Green Party conference. It lends in support of sustainable development, encouraging energy efficiency and recycling.

There has been a doubling in consumer spending on ethical products and services in the past five years, according to the Co-op's ethical purchasing index. This puts the UK's annual ethical spend at £32.3bn, including £5.6bn in ethical banking.

Co-op spokesman Dave Smith says: "It has been driven by consumer demand. It is no coincidence that you see so many fair trade products in the supermarket. Banks can't isolate themselves from this. If people want to buy Fairtrade food, they'll want it in their financial services, too."

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