How can you make your money do good?

Many people today are aware of the social and environmental impact of their actions, be it purchases, food choices, energy, transport and fuel use – even fashion. More and more people are moving towards a more sustainable lifestyle and are making choices to reflect their beliefs and values.

So what about your finances? While not immediately obvious as a force for good, how we manage our money day-to-day can have a big impact, depending on the choices we make.

 

The truth is that many of us are not aware of what journey our hard-earned money goes on once it is put away in a savings account or investment products. And we might be shocked to learn that our pounds and pennies could be funding industries and practices that go against our core values – perhaps even something we openly oppose.

At Ethex, we want to make everyone aware of the power of their pound and help them to save and invest in businesses they believe in, while still giving the opportunity for financial growth. This is often called impact or ethical investing. And it’s easier than you might think.

 

Last year, we conducted a survey into impact investing in the UK and discovered that while the majority (90%) of the population were interested in making their money do good, 90% of those surveyed felt they did not have enough information to make these choices.

That’s why we’re publishing a series of straightforward articles, explaining how, and why you can make your money do good.

 

So here are some of the products that can have a positive social, ethical or environmental impact:

Current Accounts
Even with your day-to-day financial transactions, your money can be working to help causes and industries you believe in. Take the new Triodos Bank Current Account, for example. It allows you to apply your values to your everyday banking, by putting your money to work in a range of ways that support ethical enterprises and initiatives and promote social, cultural and environmental change for the better.

Savings Accounts and Bonds
Savings accounts and savings bonds allow you to deposit your cash and earn a rate of interest. You may need to give notice before withdrawing your money, and usually, the longer the notice period, the higher the interest rate. However, if you save with a business listed on Ethex, your money will be lent on to other positive businesses or individuals, enabling you to support them indirectly, funding their ongoing good work and offering you a lower-risk way of getting a return on your money.

ISAs
An ISA, or Individual Savings Account, is a tax-free wrapper around savings and investments, meaning you can receive interest without paying tax. There are three different types of ISA: cash; stocks and shares; and innovative finance ISAs. You can invest in several different ISAs up to a maximum of £20,000 in 2017–18.
• Cash ISAs are a tax-free savings account. You can hold more than one cash ISA at a time as long as you do not exceed the maximum ISA limit for the year.
• Stocks and shares ISAs allow you to invest tax-free in stocks and shares.
Innovative Finance ISAs were launched by the government in April 2016 allowing you to hold peer-to-peer investments tax-free.

Shares
Investments in shares provide a business with the funding they need to run and are the are the financial foundation underpinning a business. There are three main types of shares on Ethex, all offering you the chance to have a positive impact with your investment:

Transferable shares are issued by companies and can be sold on to another investor through the Ethex secondary market. If you sell your transferable shares, it does not affect the amount of share capital that the business holds. Their value can go up or down and they usually pay a return in the form of dividends from the business’s profits.

Withdrawable community shares are issued by co-operatives. They can give you your money back, but only on terms set by the business. If you sell withdrawable shares you are taking money directly out of the business. Their value usually stays constant, and they pay a return in the form of interest, which may vary over the lifetime of the investment.

Depository receipts are a type of equity investment issued by international social investment organisations, allowing you to hold equity in foreign businesses. You earn a return from the investment, but the risk can be greater than with savings accounts. The funds are usually placed with a dedicated charity which then invests a matching amount in the business.

 

Whatever your reasons for looking to invest ethically, taking much greater ownership and control of your money to generate a social and financial impact is definitely a good idea – as ultimately you get to choose where and how your money is saved and invested.

You’ve now taken the first step in finding out more about ethical savings and investments – so continue to keep up to date with what’s new in this space by signing up to receive the Ethex alerts and follow us on Twitter, Facebook and Linkedin.

https://www.ethex.org.uk/savings--investments_16.html

Invest and save with Ethex to

make money do good

You can browse, compare and invest in a range of products on Ethex platform from bank accounts and ISAs to equity investments and charity bonds that offer a social/environmental as well as a financial return. All you need to do is get started...

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