Sunday, 4 May 2014

How I Divested - Choosing another bank

You may have read my previous post about why I'm leaving my fossil-funding bank. Here's how I assessed which ethical bank to choose.

Firstly, I don't have a mortgage but I do have some savings. I have one bank used mainly for transactions and another bank for my savings and my credit card. I like this setup so I decided to swap each fossil bank to one or two ethical banks.

For convenience, I will call a fossil funding bank an f-bank and an ethical, non-fossil funding bank an e-bank, and we all know 'e' comes before 'f'.

Hmmm Which bank?
I made a spreadsheet-table with each column heading asking a question, and each row representing the answers for each e-bank & account I was considering.

In Australia, we have the benefit of a bank assessment report performed by Market Forces and independently verified. Note that what is considered an e-bank can change over time. Here is a link to Market Force bank comparisons:

I looked at the comparison list and chose three e-banks that were familiar to me. I then did my own online research. Fortunately, I already had an account with one of these, so that it was a likely winner but it did not meet all my needs.

An example bank comparison spreadsheet
For a transaction account, I considered these column headings:
  • the branch & office locations (which isn't so important these days),
  • having zero fees for most everyday transactions,
  • the ATM network used and how convenient they are to me,
  • the option of a Visa Debit Card.
I found one e-bank that uses the Westpac/St George ATM network and another that uses the RediBank / NAB ATM network. The e-banks generally don't have their own ATM networks so to obtain cash there isn't much choice. I found my choice of using these f-bank ATM networks acceptable, as my money is not with them and the e-banks only pay these f-banks a fair fee for the use of the ATM.

Three of Australia's big four fossil-funding banks:
ANZ, NAB and Westpac
For my savings and credit card accounts, I considered these column headings:
  • Savings Rate
  • Term Deposit rate for 3 & 6 month periods
  • Credit Card Type (MasterCard or Visa)
  • Credit Card Rate
  • Credit Card Annual Fee
I came up with one e-bank that could do everything as good as or better than my current f-banks, but I they used MasterCard instead of Visa. This isn't a big deal unless I travel to places where Visa is the only card taken. For this case, I could use the Visa Debit facility on the e-bank that I already have an account with.

Thirty seconds after opening a new bank account
nothing this ominous happened
So it seemed clear which bank for me to choose. But I was nervous about changing banks. Surely when I changed banks, the worst financial disasters were likely to happen. But after a bit of rational thinking and deep breathing, I was confident the sky would not fall in.

I collected my identification getting ready to walk into the banks office to open an account but they said is was quicker to do it online and that is what they would do if I was at their office. The internet has changed banking a lot since I last opened an account with a new bank.

Applying for accounts online was very quick and I also found calling them for help was very efficient.

I could start transferring funds immediately that day which I did. I've yet to get my card and need to setup my credit card account so completing the process may take a few weeks, but after initially being hesitant, I progressively became confident with what I was doing, one step at a time. I even got $4 interest for my savings funds that were only in the account for the last two days of April. More than I expected.

So be bold, go forth and divest. It is an empowering experience.

Friday, 2 May 2014

Why I'm leaving my bank

Today I joined hundreds of people around Australia in notifying our fossil fuel funding banks that we are closing our accounts and placing our funds in an ethical bank.  It's called a Divestment campaign and it is coordinated by / Australia and Market Forces.

My fossil funding bank has, since 2008, invested over 5 billion dollars in coal, oil and gas projects in Australia.
Fossil Bank Divesters 

Everyone knows burning fossil fuels is the prime cause of climate change.
Even climate deniers know it. They just can't bear to admit it.

We know the impacts of climate change...
We are getting stronger storms, floods, droughts and fires.
We are destroying forests and farms for coal and gas mines.

Bushfires like this are becoming more intense
Due to more intense floods and fires, we, as in all of us, are losing lives, businesses and insurance is becoming costly.

Due to ocean acidification, we are losing plankton, the basis of the ocean food-chain, which is impacting all marine fish species. Those species that we may wish to harvest sustainably, or those that we may wish to just to marvel at and let be whether it benefits us or not.

The Corroboree Frog is at risk
due to drought, fire and ongoing warming
destroying its alpine habitat.
So we can expand a coal port, we are going to dump dredging spoil into the Great Barrier Reef and risk loss of coral, fish and the reef's world heritage status. Increased shipping movement will lead to increased shipping accidents with oil and coal pollution impacting the reef. Need I mention coral bleaching through heat stress from climate change?

Bleached Coral in the Great Barrier Reef
is not a living habitat for fish
Our government has declared Australia open for business. If you are a carbon polluter that is.

Ongoing investment in fossil fuels will worsen these conditions and it is morally wrong.
No one should be funding new fossil fuel project when we have cheaper renewable options like wind.

So I, and thousands of others are taking our money out of these investments.
This week, over $AUD 100 million is being removed from Australian fossil funding banks.

Smart people and investors should do the same before the carbon bubble bursts and they find themselves on the wrong side of history.