Triodos Bank offers new 'ethical' current account
A new ethical current account is to be offered by a provider promising a fresh approach to banking in the UK.
Triodos Bank, which says it only lends money to to organisations and projects that are making a positive difference to society, has opened registrations for its first UK personal current account, with a planned rollout from June.
Customers will receive an "eco-friendly" debit card made from PLA, a "natural plastic" that has been tested to confirm its suitability for use in a regularly-handled debit card, Triodos said.
The account, which can be operated via online and mobile banking, will be transparent and fair, the bank said, and will challenge practices which lead to customers stumbling into unauthorised overdrafts with potentially high fees attached.
Rather than operating a "free" current account, customers will be charged £3 per month. While arranged overdrafts will be available, the bank will not allow unarranged overdrafts.
Unpaid items will incur a basic charge of £5, with a maximum monthly charge of £50, which the bank said would reflect admin costs.
An arranged overdraft limit of up to £2,000 will be available by request, with a rate of 18% EAR (equivalent annual rate).
Customers can make cash withdrawals from ATMS accepting MasterCard and Link. The account will not have in-credit interest or cashback.
Triodos customers are protected by the Dutch deposit guarantee scheme - for up to 100,000 euro (£84,800) per depositor - rather than the UK-based Financial Services Compensation Scheme (FSCS).
Triodos already operates accounts in the Netherlands, Spain and Germany.
Its UK operations are based in Bristol, and it has been in the UK for 22 years.
The bank said those it lends to include charities, community schemes, social housing providers, organic farmers, homelessness programmes and renewable energy projects.
Huw Davies, head of retail banking at Triodos Bank, said: "There is no such thing as 'free' banking because someone else always pays.
"'Free' accounts are usually subsidised with high penalty charges and hidden fees, so the most vulnerable customers, or those making a rare miscalculation with the household finances, end up paying an exorbitant price.
"This isn't fair, so we are leading by example with a fresh approach."
Andrew Hagger, founder of website MoneyComms, said the move " will enable Triodos Bank to engage with an even wider group of customers who prefer to choose a bank based on its ethical principles".
He said the agreed overdraft rate it is offering is "considerably cheaper than many of the bigger high street brands".