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Ethical bank Triodos takes Brexit action by getting UK licence: should you use it?
Triodos, the ethical bank which offers current and savings accounts and backs only sustainable companies, has taken action to Brexit-proof its products by joining the UK's Financial Services Compensation Scheme (FSCS).
Based in the Netherlands, it has become the latest provider to make changes amid the uncertainty of the UK's departure from the European Union. In March, French bank RCI, the banking arm of car manufacturer Renault, gained a UK banking licence to give customers access to the FSCS.
Triodos Bank customers' savings are now protected up to £85,000 should the bank go bust. This is a vital protection for savers, particularly those depositing money with banks based in other countries, to ensure they have the confidence that their money is protected should the worst happen.
Which? explains who Triodos Bank is, how things have changed and what the company offers to savers and investors.
How has Triodos Bank taken Brexit action?
Triodos Bank has been operating the UK since 1995 under the EU's 'passporting' regime. This allows banks regulated in their home countries to offer services in other EU countries. Triodos was regulated by Dutch Central Bank (De Nederlandsche Bank), and customers qualified for the Dutch compensation scheme of 100,000 euros.
Triodos has carried out a legal transfer of its UK arm and gained a UK banking licence. This means its activities in the UK will be regulated by the Financial Conduct Authority and it has authorisation to operate in the UK under the Prudential Regulatory Authority.
This is all quite technical stuff, but it means that customers of Triodos now fall under the UK's compensation scheme, meaning that their deposits are protected up to £85,000. And being part of the UK FSCS makes it much easier for customers to make a claim if the bank were ever to go bust.
What products does Triodos Bank offer?
Triodos is a bank that prides itself on only lending to companies that 'positively affect people's lives, protect the planet, or build strong communities.'
In order to raise funds to lend out to these types of organisations, it offers current accounts, savings accounts and investments.
Current accounts
Its current account costs £3 per month, which comes with a biodegradable contactless debit card. It offers no credit interest or perks like free insurance or free overseas spending, like some of the most popular current accounts.
An arranged overdraft is charged at 18% AER.
Savings accounts and Isas
Triodos offers seven types savings accounts and Isas, with two aimed at children (a child savings account and a Junior Isa).
The table below shows what accounts Triodos offers, and how it compares to the table-toppers on Which? Money Compare, a price comparison service offered by Which? Financial Services for savings accounts and cash Isas.
| Type of account | Best AER it offers | Best rate (AER) currently available from providers with no ties |
| Instant-access savings account | 1% | 1.5% from Marcus |
| Regular saver | 1.75% fixed for 12 months | 3% from Kent Reliance |
| One year fixed-rate bond | 1% | 2.2% expected profit rate (EPR) from Bank of London and the Middle East |
| Two-year fixed-rate bond | 1.15% | 2.42% expected profit rate (EPR) from Al Rayan |
| Three-year fixed-rate bond | 1.3% | 2.55% expected profit rate (EPR) from Gatehouse Bank |
| Notice Isa (33 days) | 1.15% | 1.25% from Tipton and Cosely BS |
| Two-year fixed-rate Isa | 1.15% | 1.90% from State Bank of India |
What impact will Brexit have on European Banks?
The Financial Conduct Authority (FCA) has set up a 'temporary permissions' regime scheme, which it expects to last for three years, for banks and companies from the European Economic Area in the event of a no-deal Brexit.
This would mean the companies signed up to the 'temporary permissions regime' would get equivalent cover as that of UK institutions.
Firms are then encouraged to apply for a UK licence.
