Switching to a Climate-Friendly Savings Account
Extending my climate practice into my finances can be a tricky business. On the one hand, I firmly believe that I should put my money where my mouth is — divest from fossil fuels and invest in climate-forward companies. This should apply to my banking, my investment portfolio, and my retirement savings.
On the other hand, I'm also a realist. The only way climate-forward finance is viable long term is if it can compete with the status quo. Not to mention, I like my cushy credit card points, ATM availability and decent ROI as much as the next person.
In short, I want it all. I want my money to work for the planet and I want it to work for me.
Which brings me to my current quandary: Is there a high-yield savings account with a bank that does not invest in fossil fuels?
How I use my savings account
Normally, I accumulate savings in a traditional savings account until I've got a big enough chunk, and then I move it into my Carbon Collective investment accounts. But lately, with high inflation and high interest rates (stagflation much), keeping some emergency cash around seems like a good idea.
With the savings account I’m looking for, I plan to primarily use electronic transfers. I’ll also let the money sit for at least a year, barring catastrophe.
There are three types of accounts to consider: a traditional savings account, a high-yield savings account, and a money market account.
I already have a traditional savings account and these don’t don't give much return (around 0.33%). High-yield savings accounts give a higher return (1-5%), and money market accounts have similar rates (1-5%) but often require a higher minimum balance.
For reference, interest rates in general are high right now, and 4-5% is attainable at a normal fossil-fuel-funding bank.
What I’m looking for in a climate-friendly savings account
There’s a lot of advice out there, so I found it best to start with my personal criteria to make it easier to narrow down my options. My requirements for a climate-friendly savings account are pretty minimal.
- The bank must not invest in fossil fuels and preferably invests in climate solutions.
- The account must be FDIC insured.
- I'm looking for around 3-4% APY.
- I also need it to have a modern banking set up (e.g. security, encryption, decent website), since I intend to manage the money electronically.
After some Googling, cross referencing, and bugging my colleagues, I came up with four options: Atmos, Ando, Clean Energy Credit Union, and Spring Bank. Here’s how those options scored for me:
- I ruled out Clean Energy Credit Union because its APY is only 0.15% which is lower than market.
- Ando wasn't a good fit because they tie your ability to get a 5% rate to inviting friends, and that shtick is just not for me.
- Spring Bank is a nice local option (it's in Wisconsin; I'm in Illinois) but its high-yield account is certificate of deposit, meaning I pay a penalty if I withdraw early. Given the whole point of this is an emergency fund, that won't do.
- So that leaves me with Atmos. Atmos gives me a 1.75% rate and doubles it if I donate to a climate nonprofit. I already donate to a climate nonprofit, so lets make that money work!
Switching banks may not seem as engaging as other climate actions, but it makes a huge difference. Spending a couple hours on research is worth it to ensure that my money isn’t being used to fund fossil fuel companies. If you’re on the hunt for a high-yield savings account, it's worth seeing what climate-friendly options are out there. Here are some more options: Top 5 Savings Accounts with Sustainable Banks