Charity Bank, the only UK bank that is also a registered charity, has launched a new ethical savings account to support recession-hit charities and social enterprises as they struggle with a decline in funding.
Charity Bank uses its depositors’ funds solely to provide affordable loan finance and support to charitable organisations doing vital work in communities across the UK and beyond. The Community Bond is designed to encourage consumers to invest their money in charities, as the sector faces a slow-down in grant funding and a drop in income from legacies and donations.
Alongside the general bond, which will be used to invest in community organisations across the UK, Charity Bank also offers a number of ‘regional’ bonds. Last month it launched the Welsh Community Bond and later this month it will open a bond to be invested specifically in the Sefton area of Liverpool. It already offers the Yorkshire Deposit Bond.
Welsh Assembly minister welcomes Charity Bank bond
Welsh Assembly Government Minister Andrew Davies AM, who was at the launch of the Welsh Community Bond, said: ‘One of the attractions of the Bond is that it is invested in local community organisations, so people know their money is being used to make a difference. I hope the people of Wales get behind it and we can make it the success it deserves.’
Malcolm Hayday, Chief Executive of Charity Bank, added: ‘The Community Bond offers savers a safe, secure and transparent way to use their money to invest their money for good.
‘It’s a great alternative for people who might need to tighten their belts but who don’t want to reduce their support for charity, because we can use their money to fund vital projects, and then they can get their money back when they want it. And unlike a donation which once spent, is gone, we can loan the money out again and again while it remains with us.’
Support local charities and keep your capital safe
Which? senior researcher Martyn Saville commented: ‘Offering interest rates starting at 0.5% for its 1-year bond and 1% on its 3-year bond, Charity Bank is never going to match the best savings rates available on the market, but that’s not the point. If you’re keen to support local charities and community projects, at the same time as protecting your capital, these new community bonds could be just for you.
‘Charity bank is fully regulated by the Financial Services Authority (FSA) and is covered by the Financial Services Compensation Scheme (FSCS), so any savings up to £50,000 are completely safe. Unlike traditional donations to charity, you get your money back at the end of the term, while charities benefit from the use of your cash in the meantime. While I wouldn’t recommend putting all your savings into this one bond, particularly if you rely on your savings for income, it is a good option for consumers who want to keep their savings safe, earn a bit of interest and offer vital support to worthy local causes.’
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