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Ethical Cash ISAs

Finding an ethical cash ISA. Guide with ethical and environmental ratings for 47 cash ISAs, Best Buy recommendations and what to avoid.

About Ethical Consumer

This is a shopping guide from Ethical Consumer, the UK's leading alternative consumer organisation. Since 1989 we've been researching and recording the social and environmental records of companies, and making the results available to you in a simple format.

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What to buy

What to look for when choosing a cash ISA:

  • Is it an ethical investor? Make sure that your chosen brand is clear about how it will invest your money. Keep an eye out for ethical investment policies. The sector is lucky to have two innovative organisations looking to lever the power of people’s savings for positive social and environmental change.

  • Is it a mutual? Is the organisation owned by and run for their members rather than for short-term financial gain? Savings accounts that are by mutual organisations like building societies have traditionally been a more ethical choice.

Subscribe to see which companies we recommend as Best Buys and why 

What not to buy

What to avoid when choosing a cash ISA:

  • Is it financing climate change? Many banks have extensive investments in fossil fuels, including the most damaging ones like tar sands, ultra-deep-sea drilling, and fracking.

  • Is it funding nuclear weapons or cluster munitions? Many banks lose marks in our Arms and Military category for funding these most destructive of weapons.

  • Is the company a likely tax avoider? Secrecy and aggressive tax avoidance continues to pervade the banking sector. Avoid banks which lack robust tax policies.

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Score table

Updated live from our research database

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Brand Score(out of 100) Ratings Categories

Our Analysis

Choosing an ethical cash ISA

You may find financial products out there being promoted as ethical or green Cash ISAs because they exclude investments in tobacco, alcohol, pornography, fur, armaments, and some oil investments, rather than making a positive impact.

While its good that these things are excluded, such ISAs are often just one option offered by a provider that doesn’t maintain the same standards for all of its products. 

The best ethical Cash ISAs, such as our Best Buys, are from providers who not only exclude the most dodgy and damaging investments, but also are very clear about what they do proactively invest in.

It’s no surprise that the Best Buys in this guide mirror those in our guide to savings accounts

All host multiple positive stories on their websites about projects they have funded and initiatives they are involved in. In each case, the money held in savings accounts makes this work possible.

This is in contrast to some of the large high-street banking groups who have the advantage of appealing to their huge numbers of existing customers, and hold around two thirds of ISA accounts. Dig a bit deeper into what they do with their money and you may well want to avoid them or transfer to a more ethical provider.

Both of our Best Buys get a positive Company Ethos mark on our rankings table for offering an innovative alternative to the mainstream banking industry.

Both are members of the Global Alliance for Banking on Values (GABV), a not-for-profit independent network of banking leaders from around the world committed to advancing positive change in the banking sector, and also have ethical lending policies.

All of our Best Buys and Recommendations are protected by the FSCS (Financial Services Compensation Scheme), which means up to £85,000 (or £170,000 for joint accounts) held per firm would be repaid to the saver if a firm should fail. You should be aware that some banks or building societies are linked and therefore share one lot of £85,000 protection. You can check which ones are linked using this tool.

Update: The Co-operative Bank

Coventry Building Society has reached agreement with the sellers of The Co-operative Bank to buy the Bank subject to gaining approval from the financial services regulators. The purchase is expected to complete in the first quarter of 2025. When it is complete, we will combine the records of the two companies. Until then, they remain separate. Co-op currently scores 63/100 and Coventry Building Society 68/100.

Mutuals / Building Society ISAs

Mutually owned entities, in the form of building societies, are also a good option for cash ISAs. They are seen as a more ethical option due to the fact they lend mainly in the housing market and don't invest in fossil fuels and other unethical sectors.

All the mutuals featured on the table pick up an additional mark in our scoring system for Company Ethos due to their more democratic structures. You can read more about mutuals and building societies in our guide to savings accounts.

CSR policies

Most banks do now have Corporate Social Responsibility (CSR) policies which give the impression that they are as concerned about some of these activities as you are.

However, looking at their lending and investments, as we have done for the ranking table, shows that in many cases these words are little more than hot air.

Some of the banks we rated were involved in financing some really damaging companies and projects, fuelling abuses at the intersection of animal rights, human rights and the environment.

Barclays, Lloyds, NatWest, Santander, and Banco de Sabadell (TSB), Virgin Money, HSBC and Royal Bank of Scotland were amongst those who lost marks for lending to particularly problematic sectors including arms, fossil fuels, deforestation and animal cruelty.

See our latest savings guide for more detail on who is funding what.

Should I get an ISA?

The distinctive thing about UK ISAs is that the interest is all tax-free. Other things that make ISAs unusual are that you can only open one type per tax year, and there is a limit to how much you can put into them each year.

This annual limit has risen from £3,000 in 1999, to £20,000 where it has remained since 2017, and includes any combination of ISAs you have, including Innovative Finance ISAs and Stocks and Shares ISAs

If it’s the tax-free interest that’s enticing you, you may not actually need to open an ISA. Since the Personal Savings Allowance was launched in 2016, unless you are a higher-rate taxpayer or have very large savings, your interest payments in any savings account will be tax-free anyway.

If you have an ethical ISA, you have a place to put money safely away, and know that it is doing good, until you need it. With large amounts of money often sitting in ISAs for many years, it really can make a big difference where you put it.

Transferring to a more ethical cash ISA

It is sometimes possible to transfer a Cash ISA (or convert a Stocks and Shares ISA) from another provider if you already have one, though you should check if there is a penalty fee.

You will need to check if the new provider accepts transfers – of our Best Buys, Triodos and Charity Bank accept transfers – and ask them to maintain the tax-free status of your savings.

Government efforts to promote competition in the sector mean that it’s pretty easy to move your whole Cash ISA to a more ethical provider.

In theory it should take no more than 15 days, but you should follow advice on how to do it without losing its tax free status. Contacting the new provider is usually the best place to start.

Types of Cash ISA

Just like savings accounts, there are several types of ethical Cash ISAs to choose from. The practical details should also be checked, as they vary on how much you need to deposit to open one, and how restricted withdrawals are, as well as interest rates.

  • Easy Access is good if you may need to withdraw money, but probably will have lower interest.
  • Regular Savings is good if you can make a monthly deposit, and should have higher interest.
  • Notice or Fixed are good if you are able to wait to withdraw money, and should have higher interest.
  • Junior ISAs  are for savers under 18 years old. Parents or guardians can open and manage the accounts, but the money belongs to the child. Up to 16 or 18 years is a good amount of time to build up savings, and they may have higher interest rates too. The annual deposit limit is currently £9000.
  • If you are aged between 18-39, you can open a Lifetime ISA (LISA) account, which is specifically to save for a first home, or retirement. You can save up to £4,000 a year and receive a maximum bonus of £1,000 each year until you are 50. However, it does not do better than a pension, except perhaps for self-employed basic-rate taxpayers. Not many brands offer LISAs, but Paragon, Newcastle Building Society and Skipton Building Society do. 'Help to Buy' ISAs are no longer available to open.

Other types of ISA

Innovative Finance ISAs

An innovative finance ISA – sometimes called an IFISA – is an ISA that contains peer-to-peer loans instead of cash in a bank or stocks and shares in companies. They were introduced in 2016 to make it easier to invest tax-free with a wider range of providers. These types of ISAs are at risk, and not protected by the FSCS.

Peer-to-peer lending matches up investors, who are willing to lend, with borrowers, who could be individuals, businesses, or property developers.

Triodos offers ethical IFISAs but when we checked in November 2022, there were no open offers. See our guide to ethical IFISAs for more details.

Stocks and shares ISAs

See our guide to ethical stocks and shares ISAs. these types of investment can be linked to ethical investment funds. These ISAs are also at risk, and not protected by the FSCS.

Company behind the brand

Charity Bank is at the smaller end of banking institutions with an annual turnover of around £8m. It scored highly across the board for our ethical ratings, coming top of the pile. It provides loans across the social and charity sector, for projects including education, the environment, health and social care, sports, voluntary and community regeneration. Its 33 day notice cash ISA currently (Nov 2022) requires a minimum initial deposit of £250 (1.46% Gross/AER at November 2022).

On its website it says, “Your money will be used to support charities and social enterprises, whilst earning you a return”1. Since 2002, when it was launched in Downing Street by Gordon Brown, Charity Bank has given over 1,100 loans equalling £400m to social purpose organisations 2.



Want to know more?

If you want to find out detailed information about a company and more about its ethical rating, then click on a brand name in the Score table. 

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The [S] in the score table means the product gets a sustainability point for having a transparent and/or ethical lending policy.