A new green savings account has been launched allowing savers to save money and fund good causes – but only if they are willing to sacrifice some of their interest rate.
Planet Saver is a fixed rate bonus from green debit card and savings company Ekko.
It offers two rates, 3.4 percent for a one-year bond and 3.03 percent for a three-month option.
In comparison, the best one-year bond pays 5.15 percent, from Raisin or Zenith Bank, while the best three-month bond pays 5.09 percent, from Emirates NBD.
But the twist to the Ekko Planet Saver is that its bonuses actually pay 1 percent more than advertised, but that money is donated to environmentally friendly causes.
Cook, co-founder of carbon-offset debit card platform Ekko, is passionate about making a real difference for the environment.
‘The opportunity to help consumers using financial products make a big impact [on the planet] It’s there,” says Oli Cook, “and the industry has the opportunity to do it.”
Saver of the planet: Oli Cook says he is passionate about saving the planet, but admits that if you want the highest savings rate then this account is not the best for you
The company’s new product, which launched alongside cash management platform Akoni Hub and Bank of London and the Middle East, seeks to do just that.
“We need to make it possible for people to do good things with this money and see the impact and benefit,” he says.
The Planet Saver account, which launched in February, allows customers to receive their deposit and earnings upon maturity of their account, minus the interest they have given up in favor of these projects.
Contributions currently go to animal conservation projects led by Tusk, recycling projects by Preventing Ocean Plastic, deforestation programs by Conservation International, and carbon offset projects led by Gold Standard.
The four projects, at least for now, are resolved. In the future, Cook says there are plans to allow account users to have a say in selected projects or increase the number of projects available so users can choose to contribute to those that interest them most.
In the meantime, “he’s focused on all four, so that people can continue to do something special with their money,” he says.
“We can achieve greater impact through these four projects, just for starters.”
Through the savings account, Cook says, users can contribute to environmental causes without having to actively donate money from their savings to do so.
He told This is Money: “It’s also a passive choice, not actively coming out of your pocket, but coming out separately as an interest deferral.”
Conservation: One of the four selected causes, Tusk, focuses on animal conservation
“It’s not about losing money, it’s about using the interest to do good things.”
Therefore, Cook recognizes that Planet Saver is suitable for an environment where interest rates are at a medium or high level.
“Very good benefits are already being obtained and a part of them can be used to do good and support environmental projects,” he said. “That doesn’t work if you go back five or six years, when everyone had zero percent savings rates.”
I want more people to do this. We exist to make the world a better place, and I really don’t care who does it.
With the benefit of interest rates continuing to rise, people have more freedom to divert some of their cash toward causes they are passionate about.
This comes hand in hand with growing concern about climate change and a growing trend towards environmentally conscious decision-making.
“I think the sentiment has changed and the awareness of sustainability has increased,” Cook says.
“People want to do good things and are willing to make decisions that are good for the world, and this is fundamentally changing in all sectors.”
Of course, the rate offered by Planet Saver, with its built-in one percent contribution to environmental projects, is unlikely to match the best rates offered by competing banks.
That said, at 3.4 percent for the 1-year account and 3.03 percent for the three-month option, not including the 1 percent contribution, Planet Saver is still a competitive option.
Still, the key is to find a middle ground, Cook says.
‘We focus on the balance between a good rate and doing good. If someone wants the highest rate possible, this may not be the right product for them, and that’s absolutely fine.
“Some prefer to go for the highest rates possible, because that’s what they need in their lives… but for those who are willing to do something good with their savings, this is a great option.”
A market shaker
However, according to Cook, growing the business is not his only motivation. The goal, he says, is to bring about change in the industry, not huge profits.
He said, ‘I want more people to do this. We exist to make the world a better place and I really don’t care who does it.
Adding up: Cook hopes to attract millions of customers to Planet Saver and force change
An ideal world, he says, would be for big banks to enter the area where Ekko is currently located.
“We’re trying to push the industry to do more,” Cook adds, “the whole industry has to do better and we’re here to help them do that.”
The UK savings market is worth a whopping £1.5 trillion, meaning £15 billion would be raised if all banks followed a system similar to Planet Saver.
It may not be a realistic expectation, but Ekko is still looking to enter the market as a shaker.
Within 12 months, we expect to start seeing significant amounts flowing into our projects.
“We need to make it possible for people to do good things with this money and see the impact and benefit… Financial services play an incredible role in helping people make better decisions and have a positive impact,” it states.
“I often think about companies like Monzo and Starling Bank, which launched 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 improve their game to compete for customers.’
Cook, who previously held roles at HSBC and Metro Bank, says he foresees the same for Ekko.
“We just have to push the industry to get there and get there faster,” Cook says. “People are moving too slowly right now.” “We need to move faster and we need to make this happen now.”
Calling for an end to greenwashing
The current problem for big banks, he says, is the size of the commitments they make and their ability to deliver on what they promise.
From the consumer’s point of view, large institutions have an opacity that makes it difficult for them to demonstrate whether they are really making a difference.
“Many consumers inherently don’t trust banks because they can’t see what’s happening with their money,” Cook says. “That’s where we fall into greenwashing, because consumers can’t understand it.”
However, with Planet Saver, Ekko says he’s trying to be as transparent as possible about where users’ money is actually going.
‘You can see the exact amount that flows into those projects and what those projects do. “I think that’s what people are looking for, to see exactly what went where and to whom so they can see if they are good, have a good reputation, or are aligned with my values,” Cook says.
Despite his stated focus on being a mover and shaker in the financial services industry, this doesn’t mean Ekko doesn’t have big plans for Planet Saver in the future.
In contrast, Cook says Planet Saver has received interest from both consumers and small businesses hoping to put their savings to good use.
“Twelve months later, we expect to start seeing significant amounts flowing into our projects.”
By “significant,” Cook means millions. He adds: “Over the next 12 to 18 months, we aim to move millions into our projects through Planet Saver alone.”
But Ekko has no intention of limiting himself to Planet Saver. The company plans to start offering other types of savings accounts and expand beyond the UK.
“The UK can lead in this area,” says Cook, “but it is a global opportunity.” As far as we know, there is no similar product in the world.
“If we look at it globally, the opportunities are enormous.”
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