Ecology Building Society Earthwise ISA Review

Posted: 14 February 2008 by Harriet Meyer

Ecology Building Society offers a range of green accounts and mortgages for ethically minded savers and borrowers.

Its Earthwise ISA is among its most popular, paying an appealing 5.55 per cent tax-free interest. But beware -- if you make more than one withdrawal a year the rate sinks to 4.55 per cent, shaving a fair sum off any interest earned and making it far less competitive. On the plus side, this will work as a good incentive not to spend your savings.

The minimum deposit to open an account is £25, with ISA rules dictating that no more than £3,000 can be slotted away each year tax-free.

So, what makes it a green account? Any money invested is used to fund its specialist mortgages for environmentally friendly properties. Ecology will lend up to £350,000 on properties that use sustainable materials, for example, or projects to renovate or convert buildings that would otherwise remain derelict. If this sounds like an ecological project up your street, then it may be the place to stash your hard-earned cash. Mainstream lenders often shy away from financing such products, which are often considered to be high risk.

For those who have already used their ISA allowance, Ecology also offers its Eco60 account, paying 3.6 per cent on a minimum deposit of £500, rising to 4.6 per cent on £25,000 and over. But you must give 60 days notice to access your cash.

The society is known for its friendly approach, customer focus and strongly held convictions. But the clincher for many of the internet-savvy generation will be whether it has online access. All transactions used to be done through the post or over the phone, but the society now offers Ecology Interactive, which enables customers to look at their account balances and transactions, and will soon be extended to allow transfers and online withdrawals.

Ecology's a small provider, with no branches and 10,000 open accounts, but this account pays a higher rate than many of its eco-competitors.

Time-poor savers may be better off elsewhere, but this account pays a higher rate than many of its eco-competitors.