Big news! ShoreBank, the oldest and largest socially conscious bank in the U.S., has just unveiled a no-minimum high-yield online savings account with 5.00% APY. They'll use your money to strengthen low-income communities and help the environment; you get an interest rate that matches or beats almost all your other options.
This is huge, in my opinion. I've written before about several money market accounts and CDs where you can support a variety of good causes at interest rates that rival anything else out there, but getting a competitive interest rate from a no-minimum savings account was always the missing piece. Now anyone with $1 and an interest in supporting ShoreBank's mission can put their money where their heart is by opening an account.
How this kind of banking works
When you deposit money at a bank, they take your money and lend it out so they can earn enough to pay you interest and make a profit. Most banks do this based solely on financial criteria, which means your bank could be using your money to do things you don't approve of (maybe it's funding cluster bombs or enriching the Sudanese government, for example). But mission-based financial institutions target your money to accomplish social and/or environmental goals. (Read more from me or from The Community Investing Center.)
ShoreBank's mission-based lending
ShoreBank, which was founded in 1973, works in the Midwest (Chicago, Cleveland, and Detroit) and the Pacific Northwest making loans that support community development in low-income neighborhoods and/or a healthier environment.
ShoreBank furthers community development in low-income and financially underserved neighborhoods by providing financing for locally-owned small businesses, non-profits and faith-based organizations. ShoreBank also funds affordable housing construction and rehab, and offers mortgages and financial education to community members. They lent $365 million in 2006 for community development (62% of total lending), including $129 million to small businesses.
ShoreBank's environmental lending funds the construction and renovation of energy-efficient homes and businesses, clean-up of contaminated sites, financing changes in business processes to improve energy efficiency and decrease waste, and much more. In 2006, $202 million (35% of their loans) were for these purposes.
5.00% APY-- helping others and yourself
As you probably know, 5.00% is a fantastic annual interest rate for a no-minimum savings account. According to Bankrate.com, as of 10/12/07, there are only three accounts with higher rates that don't require $500 or more to open, and even the best of those, iGObanking.com, is offering 5.17% APY-- a pretty small difference, less than $2 per $1,000 over a year.
Spread the word!
This is big news for everyone who's been wanting to use their banking dollars for a good cause but were worried about earning too little in interest-- and those people who never thought about the option, too! I am really excited about the potential for this savings account to put a lot of our money to work in socially and environmentally beneficial ways. If you think this is as awesome as I do, please write about it, link here or to the account sign-up page, or do anything else you can think of to spread the word.
Also, keep an eye out here at Money and Values; I'm in the process of opening an account, and I'll post a review of how user-friendly the online banking interface is as soon as I get access!
- If you're interested in other socially conscious banking options-- including CDs and money market accounts that fund causes from international microcredit to fair trade to child care to independent media-- read more here.
- If you're interested in mutual funds that do socially responsible investing, check out my series starting here or use this handy tool/search engine.