There is a wealth of information and jargon out there surrounding banks and investment. Here at Blue & Green Tomorrow, as part of our “What is…” series, we’re looking to aid our readers in understanding of these terms. This latest addition considers, “What is a bank?”
A literal definition of a bank as produced by Investopedia.com is a “financial institution licensed as a receiver of deposits. There are two types of banks: commercial/retail banks and investment banks. In most countries, banks are regulated by the national government or central bank.”
A commercial or retail bank is the type with which most of us are familiar. Their primary function is to manage withdrawals and deposits as well as supplying short-term loans to individuals and small businesses. On a daily basis, consumers use these banks for basic checking and savings accounts, certificates of deposit and home mortgages.
Investments banks do not take deposits. They assist individuals, corporations and governments in raising capital through providing services such as underwriting and corporate reorganisation to institutional clients.
With many banks now offering an online service with the inclusion of higher interest rates and lower fees, the consumer’s decision of which bank to do business with is often based on the convenience of the service provided.
The large proportion of society uses a bank, or certain aspects of a bank, every day. Despite this, little attention is paid to where our money actually goes once deposited.
Your bank statement, whether received online or through the post, implies that your money, however much it may be, just sits, and doesn’t go anywhere. In fact, this is not true.
At the end of the day, a banking institution is a business and a business is there to make a profit. To make this profit, the bank lends your money to corporations, public institutions and even governments with interest.
Depending on who you bank with, this could mean that your money may be involved in heavy polluting industries or even an oppressive regime.
What are the green and ethical options?
Blue &Green Tomorrow strives to help you make well-informed choices on where your money is best placed. As previously reported, there are a number of banks and building societies with prominent green and ethical credentials.
The Co-Operative Bank has robust green and ethical policies which govern its current accounts, savings and investment products.
The policy it has put in place covers human rights, the arms trade, corporate responsibility and global trade, genetic modification, social enterprise, ecological impact and animal welfare.
It also seeks to help in lending to projects within the renewable energy and carbon reduction sectors – with onshore wind being a particular area of interest.
The Ecology Building Society offers a range of green savings accounts and mortgage options. As stated on its website, “We believe in the concept of sustainability throughout the ‘footprint’ of a mortgage, from the way it’s funded to the ultimate impact it makes on the environment.”
The building society’s mortgages support building practices that respect the environment sustainably and have low impact on communities.
Charity Bank invests through loans to benefit charities and communities. It offers saving accounts and cash ISAs to consumers.
Its vision is to “have a thriving third sector that brings about real social change and a society where social return is considered as important as financial return.”
The bank’s core values, which run throughout the organisation are to be honest, people focused, responsible, innovative and committed.
Triodos Bank offers green and ethical savings accounts and investments. The bank was established in 1980 in the Netherlands and now has significant operations in the UK.
Triodos ensures that its investments lie in environmental, community-based and art and culture projects. It makes money working towards positive environmental, social and cultural change.
But as well as considering the bank you use, there other key green and ethical issues to take into consideration.
Does the bank you are considering have responsible lending policies that ensure that its products and services are targeted in an appropriate manner? Does it provide help and advice to customers who may fall into financial difficulty?
Climate Change and the Environment
It is not just where these banks invest their money but also how it runs its business. Does it have polices in place to lower its carbon emissions or offer its customers green products?
There are an estimated two million people in the UK without even the most basic bank account. Is your bank doing anything to address this situation?
If you would like to know more about which banks are the most green or ethical, or you would like advice in making a more ethical choice, fill in our online form and we’ll put you in contact with a specialist financial advisor.
How to Build An Eco-Friendly Home Pool
Swimming pools are undoubtedly one of the most luxurious features that any home can have. But environmentally-conscious homeowners who are interested in having a pool installed may feel that the potential issues surrounding wasted water, chemical use and energy utilized in heating the water makes having a home swimming pool difficult to justify.
But there is good news, because modern technologies are helping to make pools far less environmentally harmful than ever before. If you are interested in having a pool built but you want to make sure that it is as eco-friendly as possible, you can follow the advice below. From natural pools to solar panel heating systems, there are many steps that you can take.
Choose a natural pool to go chemical free
For those homeowners interested in an eco-friendly pool, the first thing to consider is a natural pool. Natural swimming pools utilise reed bed technology or moss-filtration to naturally filter out dirt from the water. These can be combined with eco-pumps to allow you to have a pool that is completely free from chemicals.
Not only are traditional pool chemicals potentially harmful to the skin, they also mean that you can contaminate the area around the pool if chemical-filled water leaks or is splashed around. This can be bad for your garden and the environment general.
It will be necessary to work with an expert pool builder to ensure that you have the expertise to get your natural pool installed properly. But the results with definitely be worth the effort and planning that you have to put in.
Avoid concrete if possible
The vast majority of home pools are built using concrete but this is far from ideal in terms of an eco-friendly pool for a large number of reasons. Concrete pools are typically built and then lined to stop keep out any bacteria. This is theoretically fine, except that concrete is porous and the lining can be liable to erode or break which can allow bacteria to enter the pool.
It is much better to use a non-porous material such as fibreglass or carbon ceramic composite for your pool. Typically, these swimming pools are supplied in a one-piece shell rather than having to be built from scratch, ensuring a bacteria-free environment. These non-porous materials make it impossible for the water to become contaminated through bacteria seeping into the pool by osmosis.
The further problem that can arise from having a concrete pool is that once this bacteria begins to get into the pool it can be more difficult for a natural filtration system to be effective. This can lead to you having to resort to using chemicals to get the pool clean.
Add solar panels
It is surprising how many will go to extreme lengths to ensure that their pool is as eco-friendly as possible in terms of building and maintaining it but then fall down on something extremely obvious. No matter what steps you take with the rest of your pool, it won’t really be worth the hassle if you are going to be conventionally heating your pool up, using serious amounts of energy to do so.
Thankfully there are plenty of steps you can take to ensure that your pool is heated to a pleasant temperature while causing minimal damage to the environment. Firstly, gathering energy using solar panels has become a very popular way to reduce consumption of electricity as well as decreasing utility bills. Many businesses offer solar panels specifically for swimming pools.
Additionally, installing an energy efficient heat pump or boiler to work in conjunction with your solar panels can be hugely beneficial.
Finally, it is worth remembering that there are many benefits to investing in a pool cover. When you cover your pool you increase its heat retention which stops you from having to power a pump or boiler to keep it warm. This works in conjunction with the solar panels and eco-friendly heating system that you have already had installed.
Additionally, you cover helps to keep out dirt and other detritus that can enter the pool, bringing in bacteria. Anything that you can do to keep bacteria out will be helpful in terms of keeping it clean.
4 Ways To Get a Green House in 2018
Demand for green houses is surging. In 2020, almost 20% of all homes on the market will be green.
If you would like to buy a green home, this is a great time to look into it. Prices are still pretty low and there are a lot more financing options available than there were right after the recession.
If you’re thinking about buying a house, now could be a very good time to make the move! A number of factors in the housing market right now mean that you might be able to afford your dream home. Although in many parts of the country house prices are still rising, if you do your research and plan wisely, there are lots of good schemes to help you get your foot on the property ladder, or trade up to the house you’ve always wanted.
Interest Rates and Stamp Duty
Although the Bank of England raised interest rates by 0.25% recently, they remain very low, which is good news if you’re thinking of taking out a mortgage. However, rates may not stay low and it’s predicted that there’ll be a further rate rise during 2018, so don’t wait too long. Another factor that’s going to help first time buyers in particular is the Chancellor’s decision to abolish stamp duty for first timers purchasing properties for under £300,000.
For many people looking to buy a green home, raising a deposit of between 5% and 20% may not be a realistic option, in which case there are a growing number of schemes to help. Increasingly popular are shared ownership schemes, through which the buyer pays a percentage of the full value of the property (typically between 25% and 75%) and the local council or a housing association pays the rest, and takes part ownership. This is suitable for buyers who may struggle to meet the up-front costs of buying outright. There will often be a service charge or management fees to pay in addition to the mortgage. The Government’s Help To Buy scheme is a good place to start looking if you’re interested in this option. This scheme is now available to people looking to buy green homes too.
If you’re still saving for a deposit, another scheme is the Help to Buy ISA. You can get a 25% boost to your savings on amounts up to £200 per month with this scheme. It’s only open to first time buyers and you can claim a maximum of £3000.
Green home buyers are going to run into a number of other ancillary costs, most of which are common to other homebuyers.
When calculating how much you can afford, it’s vitally important to remember that buying a house comes with a whole host of other costs. Depending on the cost of the property that you’re buying, you may have to pay stamp duty of anywhere between 1% and 5%. There’ll be estate agents fee if you’re also selling a property, although there are a wide range of online estate agents operating such as Purple Bricks or Right Move that have lower fees than traditional high street companies. Conveyancing costs to a solicitor can add another £1000-£3000 and you may need to take out life insurance and hire a moving firm.
There are other initial costs such as, fixing parts of the home that aren’t upto your taste. Getting new furniture to fill up all the new-found space in your new home. If you are moving away from the city, you need to consider the cost of transportation as well, as it can take up quite a lot over time. Take your time, do your homework and shop around and soon you could be getting the keys to your perfect home.
I hope this article was useful for you to learn more about the basics that you need to be aware of before you start the process of buying your first home. If you have any doubts with regards to this, let us know through the comments and we will be glad to help you out. If you have any suggestions regarding how we can improve the article, let us know them through the comments as well for us to improve.
Do you have any other reservations against buying your first home? Do you see your house as an asset or a liability? Do you think it is important for everyone to get themselves a new home? Let us know through the comments.