On my first day of college, I opened up a checking account with a big, national bank, and I continued using that account for years and years, until very recently. Why did I choose that particular bank? Well, they had a branch on campus, and it was convenient. Plus, everybody else was using that bank, too. Turns out, this is not a very good reason to choose a bank, and I finally decided to make the switch to a much, much better bank—one that is socially and environmentally responsible.
What is a socially responsible bank?
Socially responsible banks use money for social good, rather than simply for profit. They are committed to supporting social and environmental causes. Most also undergo rigorous background checks to ensure these values are upheld.
Why do socially responsible banks matter?
Banks profit by using the money that people deposit to make loans to businesses and other customers. However, because you don’t get a say in how your money is used, that money could be used to fund projects that go against your values, like building pipelines for oil. But if you choose a socially responsible bank instead, you can ensure that your money is invested in ways that align with your values and contribute to a better world.
How do you know if a bank is socially responsible?
Many socially responsible banks prove their worthiness by become either a Certified B Corporation or a Member of the Global Alliance for Banking on Values (GABV). Certified B Corporations are for-profit businesses (not just banks), that agree to uphold certain social and environmental standards. These include requirements such as paying employees a living wage and using sustainable sources of energy.
The GABV is worldwide network of values-based banks that agree to invest in communities, maintain transparent business practices, practice sustainability, and create long-term relationships with clients.
Although there are only a handful of B Corps and GABV banks in the US, community development financial institutions (CDFI) is another great network banks, credit unions, and venture capital funds. They don’t have a sustainability component attached to their mission, but they do support economically disadvantaged communities.
If having a local brick-and-mortar branch is important to you, and you don’t live near a B Corps, GABV, or CDFI member bank, most credit unions are also a good option. Unlike banks, credit unions are not-for-profit financial institutions that aim to serve communities. Deposits are lent out to members, not to corporations. This is important because when you support a financial institution that puts community first, you are supporting a strong, self-sufficient local economy, instead of having your money siphoned off to corporations around the world.
What bank did I choose?
Initially, I planned to switch from a corporate bank to a credit union, but my local credit union had some restrictions that I wasn’t comfortable with, such as requiring a minimum of 10 debit card transactions per month to avoid monthly fees. After a lot of research, I decided to switch to Aspiration. Aspiration is an online Certified B Corp bank committed to saving the planet with the promise that customer deposits will never fund fossil fuel projects, firearms, or political campaigns.
Not only that, but they also 5 free ATM withdrawals per month, cash back on debit card purchases, 1.00% APY on savings accounts (which is pretty high rate of interest for a bank account), and no hidden fees. If this sounds good to you, please consider using my referral link* to sign up. You’ll get a $25 bonus, plus $25 to donate to the charity of your choice when you create a new account!
If you belong to a responsible bank already, I’d love to hear about it! What motivated you to make the switch? What causes does your bank support? Let me know in the comments.
*This blog post is not sponsored, but I will make a small commission if you use this link, at no cost to you. Thank you for supporting my blog!