Banking decisions: Returns or Environmental Responsibility?

Follow-up on my 1/15/07 blog entry

I heard back within an hour when I emailed New Resource Bank… I still have not heard back from Eco-Bank, two days later, so they are out of the running for my business. 

I have to admit, I’m leaning against going with New Resource anyway, and looking into local banks so that I have the added convenience of local ATMs.   I believe that it is good to put our money where our morals are, but that we should not pay too much to do so…  If I go with New Resource, I effectively tie up $4000 of my money at zero interest, vs. $1000 tied up at the local credit union. 

If I go with the local credit union, the $3000 difference will naturally be invested in projects that help the environment AND are likely to earn good returns, but $1000 is tied up, possibly financing someone else’s Hummer. 

If I go with New Resource, my $4000 minimum earns no returns, but is still invested in projects that help the environment.  Is the loss of earnings on the $3000 worth the fact that the other $1000 will be invested in an environmentally sound manner?

I think I’ve talked myself out of using New Resource… For me, my money is better deployed elsewhere.  For you, the calculation could easily be different: my job is to find investments that are both good for the environment and good for the pocketbook… so I always have more environmentally sound opportunities than I have money to put into them.  

For most people, the opposite is true.   Finding sound investments is extremely difficult (and usually harder than it seems), but complicating things with the added requirement that the investments also be environmentally sound moves the task totally out of reach.  So, given that you are probably not a green investment professional, you will be giving up less potential earnings on the account minimums, and using them for your banking needs is an easy way to ensure that your money is being used responsibly.

Keep in mind, this entire discussion is based on the requirements of New Resource’s Business Checking accounts…. the account minimums are much lower for their personal checking accounts, and so the trade-offs there are not so dire.  Unfortunately for New Resource, I am not in the market for personal banking services… I have an excellent deal through my broker (a deal which they are unfortunately unable to extend to my business account.)

See comments for a response from Peter Liu, New Resource VP & Founder.

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2 Comments

  1. Peter Liu said

    Hi, this is Peter from New Resource Bank. I really like your analysis. I would like to offer some explanations. Our website also has more details.

    There are cost associated with checking accounts such as check processing, fraud protection, ATM fee rebates, etc. Under our Simple Business Accounts, a business can write up to 150 checks for free. The business owner can also use any bank ATM in the world for up to 10 times per month. Some times lower minimum balances offered by other banks are associated with lower “free” activities. For example, a large national bank’s website lists a no-minimum business account that charges $8 per month and has additional fees for more than 20 checks. As a smaller bank, we don’t currently have numerous business checking accounts to choose from. However, we do offer the same FDIC protection plus the commitment to to deliver outstanding service.

    The minimum balance requirment for fee free checking under the Personal Resource Accout is $2,500. There is no minimum balance requirement if you have direct deposit. Also the Personal Resource Checking account allows you to use any bank ATM in the world for free, not just your local bank ATM, thereby providing a lot more convenience. No more driving the extra distance to find your “home” ATM. One of our clients just used his ATM card in Mexico City!

    The Interest Reward Checking Account has a $5,000 minimum balance requirment for no fees. However, it pays interest on any balance over $1,000. So essentially it is similar to your local credit union, with just $1,000 not earning interest. There is also ATM fee rebates on the Interest Reward Checking.

    Thanks again for your analysis. When we designed our products, we benchmarked ourselves to offer more value to our customers than most competitors. However, we may not have apples to apples products compared to every bank.

    Thank you for considering us. We are having a great time serving our clients and working with the growing New Resource Community!

  2. tomkonrad said

    Thanks for your response, Peter.

    I’m feeling guilty for being an obsessive bargain hunter.

    I didn’t know about the ATM fee rebates… that is a great feature, and part of the reason I’m so attached to my broker for my personal banking needs. It certainly would not be offered by my local credit union.

    I’d like to just say that I do think that Peter is right that New Resource Bank’s offerings are well priced. So if you’re not the type of person who shops around obsessivly for the best bargain (as I am), you won’t be giving anything up at New Resource Bank.

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