Create a savings account at a climate-friendly bank

When you put your money into a bank account, it isn't just sitting; banks use this money to invest in many different types of projects. While you can't control where your bank invests your money, you can choose a bank that is lending their money to better causes. While most of the biggest banks are lending significantly to the fossil fuel sector, a growing number of institutions are prioritizing lending to green projects and community development. You might be thinking that moving a bit of money probably doesn't make much difference, but it has a surprisingly large impact - moving $8000 (the average savings in the USA) from a major bank to a green bank has nearly the same impact as eliminating meat.

Moving your money is both one of the easiest and most impactful things you can do to positively impact climate change

 

(image from project drawdown's report on personal banking)

And here's the kicker - most of these banks pay a lot more interest than the big banks! In addition to their lending practices, major banks like Chase know that most people just have accounts there because they have a big name, or their parents had an account there, so they can get away with paying interest rates like .02% (and that's for the "preferred" account), while banks prioritizing green lending like Forbright Bank are paying 3-4% interest (as of this writing - interest rates can change, but it is clear to see which banks are paying their customers vs pocketing all of the gains). While these banks are smaller and may not be household names, they are backed by the same FDIC insurance as the big banks.

Switching isn't as hard as you think

Ok, fully moving banks can be quite a chore, since you need to update all of your transfers and direct deposits. However, you can get nearly all the impact just by opening a new savings account at a green bank, and keeping a majority (or any part) of your cash savings in this account. And doing this in the modern days of electronic banking is extremely easy - many green banks allow you to open and fund an account 100% online. I personally still have my Wells Fargo checking account, but have move my savings over to Forbright Bank. I have a portion of my direct deposit going to this new account, but you can also just set up a recurring transfer. If you are on the fence, there is not much downside to opening an account and giving it a try - worst case you can just take your money out, there is no impact to your credit score for creating an account).

The basic steps are:

1. Find a climate friendly bank that supports online account opening (or if you prefer to go in person, find one that has a branch near you). bank.green is a great resource to find banks that do not fund fossil fuel companies
2. Connect your current bank account to the new one. In many cases, this can be done instantly, but otherwise takes a couple days to verify microdeposits
3. Move a portion of your cash savings to the new account using an online transfer
4. Watch your money earn more interest and help to make a better future

Note: this focuses on US banking, but the sentiment holds true in any country.

Pushing the system

Aside from the personal impact, moving your money can send an important signal to your old bank that their loaning practices matter to customers, and can lead to banks changing their lending practices to keep customers happy. This is not just a hypothetical, it has happened in the past on multiple occasions:

• In the 1980s, divestment movements targeting companies behind Apartheid in South Africa resulted in many major banks divesting as well
• In the 1990s, divestment from tobacco companies, which contributed to changing the perceptions around smoking

In order to help send this signal, contact your bank to let them know why you are moving savings out of their bank. You can do this using their standard contact number, or try to find the email of an executive of your local branch.