Bank funding fossil fuels? Maybe it's time to stash your cash elsewhere
You're spoiled for choice in Australia when it comes to licensed banks that don't fund fossil fuels. This'll help you narrow down your options.
So, you’re with a bank that fund fossil fuels. Awkward 😬
At least you have over 80 alternatives to choose from, hooray!
…but which to choose?
I’m agnostic. It’s about choosing what works best for you.
Be prepared to spend a bit of time searching for bank accounts online, using the specific account type (e.g. savings, transaction etc) to search.
Just please remember: some comparison sites are ‘pay to play’. As in, you won’t see banks that haven’t paid the site to be displayed.
Now, if you’re an awesome bank with excellent word of mouth, you might not feel compelled to pay for your spot. So, comparison site don’t always have a complete list of your options.
Also, there’s no one size fits all. Personal finance is personal. What suits you might not suit me, and vice versa.
And, I don’t do financial advice, so I couldn’t tell you even if I had an opinion.
You might find the MoneySmart guides instructive in choosing:
(They don’t have a business banking suggestion page unfortunately.)
When it comes to banking, in my opinion you’ll want to look at five things when you’re making your choice.
Check the bank you want to move to:
1. Is not one of the 18 banks funding fossil fuels
Check the list on the Market Forces bank comparison table.
You’ll see there are 40+ banks with clear statements that they don’t fund fossil fuels, and other 30+ who haven’t put any money into fossil fuels, but haven’t explicitly ruled it out.
The former is probably a safer bet, but either will do.
2. Is an authorised deposit-taking institution, or ADI
In other words, a licensed bank.
This means you’re covered by the Financial Claims Scheme, otherwise known as the government’s $250k guarantee.
Check the Australian Prudential Regulatory Authority (APRA) website for an up-to-date list of ADIs:
3. Doesn’t overlap with the banking license for another institution you use
Again on that $250k guarantee: it applies per person, per license.
When a bank is a subsidiary operating under a parent license, the guarantee applies once to the whole group.
So for example, if you’ve got Bendigo and Up bank, they’re both on the one license. So, $250k is covered between the two, not $250k per bank.
The subsidiaries are indented on the APRA ADI list above, like this:
4. Has acceptable terms and conditions
The joke goes: Adam and Eve were the first to ignore the Apple terms and conditions, and look how that turned out!
Religious jokes aside, you do need to wade into the fine print.
I am sorry to say I would not trust AI to do it for you.
Don those reading glasses, pour yourself a cup of patience and find out:
What are the fees? The interest rates? Penalties?
If it’s for a mortgage: does it offer an offset account facility, and are there any fees for it? Does it allow redraw?
If it’s business banking: does it offer the account types you want? Is a business overdraft facility important to you? Will it accept your business structure? For example Money School is held in a trust with a corporate trustee, which some banks won’t allow.
Does it have a branch, or onshore phone support, if you value that? Make sure you choose something with terms that won’t leave you worse off, depending on your needs and preferences. Especially…
5. Has an online banking system that meets your needs
Look at app ratings and online reviews.
For example, I love having desktop options (call me old school) so Up bank with its mobile-app-only option is suboptimal for me.
Shop around and make sure the app/desktop experience you’re getting isn’t going to make life a misery.
A note on business banking
Just because the big banks most commonly appear in the business banking awards doesn’t mean you can’t find a replacement among the smaller ones.
…but if you’re absolutely set on having a big bank, consider Market Forces’ stance that Commonwealth and NAB are far ahead in their fossil fuel lending journey versus Westpac and ANZ.
Just sayin’.
If you’re willing to skip the big banks, there are excellent business banking options available outside the fossil fuel funders, so please do.
Got your shortlist narrowed down? Awesome!
You’re ready to either:
Send a message to your existing bank with a deadline to move - you can use the bank comparison table links on Market Forces to do this if you want. Be sure to pop a calendar reminder on that date to move if they haven’t stepped up.
Start moving.
Before you move, if you’ve got super or shares to shift, check out those posts too.
Otherwise, off to Act you go!