A new eco-savings account has launched that lets savers squirrel money away and fund good causes – but only if they are happy to sacrifice some of their interest rate.
The Planet Saver is a fixed-rate bond from green debit card and savings firm Ekko.
It offers two rates, 3.4 per cent for a one-year bond and 3.03 per cent for a three-month option.
By comparison, the best one-year bond pays 5.15 per cent, from Raisin or Zenith Bank, while the top three-month bond offers 5.09 per cent, from Emirates NBD.
But the twist with the Ekko Planet Saver is that its bonds actually pay 1 per cent more than advertised, but that money is donated to environmentally-friendly causes.
Cook, the co-founder of carbon-offsetting debit card platform Ekko, is passionate about making a real difference to the environment.
‘The opportunity to help the consumers who are using financial products to make a big impact [on the planet] is there,’ Oli Cook says, ‘and the industry has the chance to do this.’
Planet saver: Oli Cook says he is passionate about saving the planet, but admits that if you want the highest savings rate then this account isn’t the best one for you
The company’s new product, which is has launched alongside cash-management platform Akoni Hub and the Bank of London and The Middle East, seeks to do just that.
‘We need to make it possible for people to be able to do good things with this money, and see impact and benefit,’ he says.
The Planet Saver account, which was launched in February, sees customers receive their deposit and profit at the maturity of their account, minus the interest that they have foregone in favour of these projects.
Currently, contributions go to animal conservation projects run by Tusk, Preventing Ocean Plastic’s recycling projects, Conservation International’s deforestation programmes and carbon compensation projects run by Gold Standard.
The four projects, for now at least, are fixed. In future, Cook says there are plans to allow the account users to have a say in the projects that are selected or to increase the number of available projects so that users can choose to contribute to those that they care most about.
In the meantime, however, ‘it’s fixed to the four so that people can still do something special with their money,’ he says.
‘We can make a bigger impact through these four projects just to start off with.’
Through the savings account, Cook says, users can contribute to environmental causes without them having to actively donate money out of their savings to do so.
He told This is Money: ‘It’s also a passive choice, which isn’t actively coming out of your pocket – it’s coming out separately as an interest deferral.
Conservation: One of the four causes selected, Tusk, focuses on animal conservation
‘This is not about you losing money, this is about using the interest to do good things.’
As a result of this, Cook concedes that the Planet Saver is suited to an environment where interest rates are at a medium to high level.
‘You’re already getting a very good return and you can use a proportion of it to do good and support environmental projects,’ he said. ‘That doesn’t work if we go back about five or six years when everyone was on zero percent savings rates.’
I want more people to do this. We exist to make the world a better place, and I don’t really care who does it
With the benefit of interest rates continuing to rise, people have more freedom to divert some of their cash towards causes that they are passionate about.
This comes hand in hand with ever-growing concerns over climate change and a growing trend towards environmentally conscious decision making.
‘I think sentiment has shifted, and awareness of sustainability has grown,’ Cook says.
‘People are wanting to do good things and are willing to make choices that are good for the world, and this is fundamentally changing across all sectors.’
Of course, the rate offered by the Planet Saver, with its built-in one per cent contribution to environmental projects, is unlikely to match the best rates offered by competing banks.
That said, at 3.4 per cent for the 1 year account and 3.03 per cent for the three month option, both not including the 1 per cent contribution, the Planet Saver is still a competitive option.
Regardless, the key is to hit a middle ground, Cook says.
‘We focus on the balance between a good rate and doing good. If someone wants the highest possible rate, this may not be the right product for them, and that’s absolutely fine.
‘Some prefer to go for the highest possible rates, because that’s what they need in their lives… but for those willing to do some good with their savings, this is a great option.’
A market agitator
According to Cook, though, growing the business is not his only motivation. The aim, he says, is for industry change rather than huge profit.
He said: ‘I want more people to do this. We exist to make the world a better place, and I don’t really care who does it.’
Adding up: Cook hopes to bring millions of customers onto the Planet Saver and force change
An ideal world, he says, would see big banks wading into the area that Ekko is currently in.
‘We’re trying to push the industry to do more,’ Cook adds, ‘the whole industry has to up their game, and we’re here to help them do that.’
The UK savings market is worth a whopping £1.5trillion, meaning that a massive £15billion would be raised if every bank followed a similar system to the Planet Saver.
Not a realistic expectation perhaps, but nevertheless Ekko is looking to enter the market as an agitator.
12 months down the line, we hope to start seeing significant numbers flowing into our projects
‘We need to make it possible for people to be able to do good things with this money, and see impact and benefit… Financial services have an incredible role to play in helping people make better choices and have a positive impact,’ he says.
‘I often think about the likes of Monzo and Starling Bank, who came out with phenomenal digital products that changed the game when it comes to digital experiences and the way people manage their money, and this forced more financial institutions to up their game in order to compete for customers.’
Cook, who previously held roles at HSBC and Metro Bank, says he envisages the same for Ekko.
‘We just need to push the industry to get there and do it faster,’ Cook says, ‘At the moment people are moving too slow. We need to move faster and we need to make this thing happen now.’
Calling for an end to greenwashing
The current problem for big banks, he says, is the size of the commitments that they make and their ability to actually deliver on what they are promising.
From the point of view of a consumer, large institutions have an opaqueness that makes it difficult for them to demonstrate whether they are actually making a difference.
‘Lots of consumers inherently don’t trust banks, because they can’t see what happens with their money,’ Cook says. ‘That’s where we fall into greenwashing, because consumers can’t understand it.’
With Planet Saver, however, Ekko says it is trying to be as transparent as possible about where users’ money is actually going.
‘You can see the exact amount flowing to those projects and what those projects do. I think that’s what people are looking for, to see exactly what has gone where and who’s it gone to so I can check whether they’re good, reputable, or aligned to my values,’ Cook says.
Despite its professed focus on being a mover and shaker in the financial services industry, this doesn’t mean that Ekko doesn’t have big plans for the Planet Saver in the future.
On the contrary, Cook says Planet Saver has received interest from both consumers and small businesses that are hoping to put their savings to good use.
‘Twelve months down the line, we hope to start seeing significant numbers flowing into our projects.’
By ‘significant’, Cook means millions. He adds: ‘Over the next 12-18 months, we’re looking to move millions into our projects through Planet Saver alone.’
But Ekko doesn’t intend to stop at the Planet Saver. The company has plans to begin offering other types of savings accounts and to expand beyond the UK.
‘The UK can lead in this space,’ Cook says, ‘but it’s a global opportunity. As far as we know in the world, there isn’t a similar product.
‘When considering it globally, the opportunities are huge.’
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