Looking for a green term deposit? Here are 3 good options
Term deposits are a no-brainer for some savers because you simply stash your money away and forget it. Then with a good interest rate, your initial deposit comes back a little bigger.
But there is one aspect of term deposits you might contemplate a little further, and that’s whether the one you’re interested in is green.
With banks investing nearly 3.8 trillion USD in fossil fuels between 2016 and 2020, more Australians are looking for greener money options. So by choosing a green-centric bank for your term deposit, you could help with the climate crisis.
First things first: What is green banking?
Green banking is an umbrella term for institutions that offer eco-friendly banking products and services like home loans, bank accounts and, of course, term deposits.
When a financial institution commits to never invest in climate damaging industries like fossil fuels, we call them a green or eco-friendly bank.
To have a green term deposit you first need to find a green bank.
Green term deposits options in Australia
There are a few good options for savers wanting a “greener” term deposit. Some providers have altogether ceased investing in fossil fuels, which is great news, while others have gone the next step and actually put money into green or sustainable projects.
It’s also worth noting that you don’t necessarily have to switch bank accounts with a new ‘green’ term deposit. In fact, a number of providers will deposit your interest earnings into the bank account of your choice.
Below we’ve picked three term deposits worth comparing. Two of them allow you to nominate your bank account, while all three providers have no record of funding fossil fuels since 2016, as documented by Market Forces.
Judo Bank
- 4.10% p.a. 12-month term deposit
- 4.95% p.a. 5-year term deposit
- Interest paid to bank of your choice
Judo Bank says that it’s not involved in directly financing large fossil fuels industry projects or companies. Not only that, but Judo is a 2022 Mozo Experts Choice Award winner for best term deposits. It offers some of the highest rates in Mozo’s database, with its 12-month term deposit at 4.10% p.a. and its 5-year deposit sits at 4.95% p.a. You can also pay your interest to a bank of your choosing, which is always a plus.
Bank First
- 3.30% p.a. 12-month term deposit
- 3.75% p.a. 5-year term deposit
- Interest paid to bank of your choice
Bank First says that it doesn't invest in any listed or unlisted fossil fuels share and has no plans to do so in the future. Its 12-month term deposit interest rate is 3.30% p.a. and its highest rate is 3.75% p.a. for its 5-year term. You can also have your interest gains paid to a nominated account of your choosing.
Rabobank
- 3.75% p.a. 12-month term deposit
- 4.50% p.a. 5-year term deposit
- 2022 Mozo Experts Choice Award winner
This 2022 Mozo Experts Choice Award winning term deposit does not invest in the fossil fuel industry and also finances the development of sustainable food and fibre industry. Its 12-month deposit interest rate is at 3.75% p.a and its 5-year term interest rate is at 4.50% p.a. For this particular term deposit, you can’t have the interest paid to another bank.
If you want to learn more about green finance and how to make your money more eco-friendly check out Mozo’s family finances page.
* Different interest rates apply to different amounts or different interest payment frequencies.
^See information about the Mozo Experts Choice Term Deposit Awards
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