Over the next several chapters, we'll be discussing your investment options—asset class by asset class. We will look at what each class is, how it works, and the values-aligned investment choices you have. We'll start, in this chapter, with the first asset class: cash. Your cash should not be overlooked when you're thinking about a value-aligned portfolio. Like any other investment you make, it is being used for some purpose, and you have the right to choose a bank that uses your money to support the things you care about.

This chapter will help you think differently about your cash and the impact it is having on the world. It describes a range of banking options through which you can express your values, and it provides you with the step-by-step actions required to shift your assets from your current bank to a financial institution that is driven by more than the bottom line. By changing banks, you might also find that you receive higher interest, pay lower fees, and/or receive more personalized customer service.

In 2011, I transferred my savings and checking accounts from Wells Fargo and Citibank to New Resource Bank, which aspired to invest 100% of its loan portfolio in businesses that advanced sustainability. I loved New Resource Bank! They were small, local, and loaned my money to green businesses. When I started writing this chapter, my bank was in the process of being acquired by Amalgamated Bank, another values-aligned financial institution.

While I appreciated my new relationship with Amalgamated, I prefer smaller banks. So I moved my cash accounts to two different financial institutions, both of which support women-led businesses and underserved groups in my community. I also opened a third account with Aspiration Bank, because it is a digital-only values-aligned bank, and I wanted to test that, too.

Although I opened accounts at three banks, I'm not advocating that you do the same. I did it as an experiment. Bottom line? It wasn't that hard. I made the shift bit by bit and didn't close out my Amalgamated accounts until I knew all my deposits, bill payments, and transfers were being handled by my new banks. Since I wasn't in a rush, I gave myself about six months to complete the process, even though I could have done it much faster.

So far, I am very happy with my choices. I feel good about where my money “lives” and what it supports. I get updates about the impact these institutions are making, and my new banks even invite me to local events from time to time. In my view, that's a pretty compelling relationship to have with your bank!

Cash Is Ready Money

Cash includes any funds that are immediately available—in full—for any purpose. Cash is normally invested in savings, checking, and money market accounts. These investments are available from a range of financial institutions.

When you put your cash in the bank, it is safe, but chances are you aren't making money on it. In fact, since the rate of inflation is probably higher than the interest rate you receive on your cash, you're actually losing money. For example, if you're receiving 1.00% interest and the inflation rate is 3.00%, then in real terms* you're losing 2.00% of the value of your cash each year. Crazy, right?

Your bank, however, is using your money to make money for itself. How they are using it, what they are investing in, and who is benefiting from your money should matter to you. After all, it's your money. The question is: Are they supporting your goals and using your money in ways that align with your values? The good news is you have other choices if they aren't.

This is particularly important for women because we are savers. In other words, we often have more cash than we need to hedge against risks. According to an article by Ellevest, women keep 71 cents of every dollar in cash instead of investing it.¹ We tend to do this because we're saving for a future goal, we want to protect against lean times, or we just don't know where else to invest. So these funds are left in cash accounts—sometimes for years, even decades, without growing. I want you to know that it doesn't have to be this way. You can make the switch and start having your money work for you while supporting your values.

Traditional Options: The Mega-Bank

Let's start by looking at the mega-banks, where many Americans have chosen to invest their savings, checking, and money market accounts. Four of the biggest banks in the US are Bank of America, Wells Fargo, Citigroup, and JP Morgan Chase. These four mega-banks have combined assets in the trillions of dollars, and they control half of all the banking assets in the country.² During the 2008 financial crisis, the economic power these banks wielded became apparent and the now-famous epitaph “too big to fail” became a household saying.

How did we get to the point where a relatively small number of banks play such an outsized role in the US economy? In a word—consolidation. Through a series of mergers and acquisitions from 1990 to 2009, 37 banks combined into what are now known as the “Big Four.”

These mega-banks tend to invest in what is known as the “financial economy,” money that gets put to work in stock trading, global markets, investment banking, and similar financial services. Because mega-banks and other large banks are publicly owned and traded on the stock market, their investments must maximize return for the benefit of their shareholders. This requirement is a key driver of their business models, investment decisions, and customer focus—and it often doesn't leave a lot of room for people, the planet, or the other things that matter to many of us.

If you want your money aligned with your values, you need to know how your bank is investing your cash. Due to their size and complexity, there is little transparency as to how money deposited in mega-banks is actually used, which makes it hard to determine the values that drive the bank's business decisions. Putting your money in a mega-bank is like putting it in a black box. Chances are you're inadvertently supporting businesses, industries, and economic players that aren't aligned with your values. It's even possible that you're invested in the businesses and activities that you would boycott, petition against, and otherwise work to change.

While the mega-banks do offer a range of banking services, it's unlikely they're making us money—unless we're shareholders. And even then, it's unlikely they're a place where women, minorities, and the local community successfully obtain loans as they try to start—or run—small businesses.

These banks are so big, so much a part of our economy, and so ubiquitous in our lives that we just assume they're our only option for savings and checking accounts, credit cards, and other personal financial products. But that couldn't be further from the truth. And it wasn't always like this. Even today's mega-banks started out much smaller and focused on the needs of the average person. At one time, they were also centers for innovation. But as they grew, the banks' business models became more focused on large customers, economic growth, and shareholder profitability.

Other Banking Options

Sadly, many financial institutions like Bank of America have long outgrown their founders' original visions. Still, there are plenty of others that use their capital to support local communities, the members of their institution, or specific values such as climate change and social justice. These alternatives to mega-banks include values-based banks, credit unions, and community development financial institutions (CDFIs). Some of these options are banks, some are member based, and some are nonprofits. These values-based financial institutions provide a wide range of banking services that often come with higher returns or lower fees than larger banks. Most of them ensure your deposits are federally insured up to $250,000, similar to mega-banks. And many have been in business for decades and are extremely viable options for socially minded individuals.

Values-Aligned Banking Options

Choosing a values-based bank, credit union, or CDFI means you'll know how your bank is investing your money. In addition, you aren't giving up safety as long as you choose a financial institution where your money is insured. You may also pay less in fees and make more in interest. And in many cases, you'll receive a more intimate customer experience. That's a lot to like.

As a consumer of banking services, you have some control over the type of impact you make through your choice of a bank. You can choose a financial institution that supports a group you're affiliated with, provides loans to women and other underserved communities, or addresses environmental issues. All of those options are possible. Table 4.1 lays out some impact goals and shows the types of financial institutions that typically provide that level of impact. Please visit our companion website to locate values-aligned financial institutions near you.

Aligning Your Cash

At this point, you have learned that you have options about where you hold your savings and checking accounts. You also know that you can invest your cash in ways that support women, your local community, or other causes you care about. However, actually taking the time and energy to make these changes may seem daunting. Some of the women involved in writing this book went through the process just like I did. And, like me, they learned that it's not that hard to break with your current bank.

The biggest obstacle you are going to run into when moving your cash to a new bank will be inertia. We felt it, too, but as we started learning more about how our money could advance our goals, we got more and more excited to shift our cash into alignment with our values. Then, when we realized that we could make more money in interest and get more personalized customer support, many of us moved into action. And so can you.

If you're considering changing your bank, I'm sure you have a lot of questions. Here are some of the ones I considered when I first started to move my cash:

Isn’t this Going to Take a Lot of Work?

It will take some work, but it doesn't have to be that much. It's going to take you a bit of effort to shift from one bank to another, but there are a number of resources that can help you make the transition easily.

The most time-consuming aspects of this process will be:

• Deciding where you want to move your cash; and
• Establishing your automatic direct deposit and bill payment links with your new bank.

To simplify these steps and to hold yourself accountable for following through, you may want to go through the process with a few friends. Several of us did this together over a period of months, and we learned a lot in the process.

As a bit more incentive, you may find that changing banks saves you hundreds of dollars every year. Switching banks allows you to do some “financial housekeeping,” because you will go through all of your recurring and automatic payments. You may find (as some of us did) that there are things you have been paying for on a regular basis that you completely forgot about and don't even need anymore.

How Long is this Going to Take?

Plan on a transition period of three to six months. Not because it must take that long—you could do this in a matter of days or weeks if you prefer. A longer time frame allows you to move through the process at a pace that fits your lifestyle. After you open your new account, you don't have to move all your assets at once. It can be easier initially to shift only a portion of your funds. By managing two accounts for a while, you can enter your automatic deposit and bill payment links into your new account over time. Furthermore, you can watch your old account after most of the funds have been shifted to be sure there are no unexpected deposits or withdrawals. Once you are comfortable that your new account is fully functional and funds are no longer needed in the old account, you can close it.

What if I Can’t Find a Values-Aligned Bank that Provides all the Services I Need?

This can be a challenge if you do a lot of international travel, have business overseas, feel like you are tied to your bank due to a mortgage, or have unusual financial needs. Many credit unions offer additional services to their members through partnerships with Credit Union Service Organizations, so be sure to ask before assuming your needs can't be met.

If a values-aligned bank can't provide the services you need, you may want to have two banks. Most of your cash can be kept in a values-aligned institution, with a minimal amount kept in your current bank to ensure you have access to the key services you want to maintain or that your new bank cannot offer. This way, you will have most of your cash in alignment with your values, even though some of it will be in a nonaligned bank. If you set up a link between your banks, it will be easy to move funds back and forth. This can actually be a win-win scenario because you have access to the benefits of a community-based financial institution, the key services you need from your current bank, and the satisfaction that most of your cash is being put to work in support of the things you value.

What if I Hate My Current Bank, but I Love their Technology?

In the past, limitations related to online bill pay services or mobile phone apps were a hindrance in making the commitment to move cash to more values-aligned financial institutions. But this is changing.

Online banking capabilities are rapidly becoming the standard that all banks and credit unions need to meet. So more and more of them are upgrading their systems. If this is critical to you, be sure to address this issue when you are interviewing prospective banks.

What about ATMs? Won’t I give up Access?

Not necessarily. Many credit unions and CDFIs are part of a broad network of ATMs. The ATM fees that values-aligned institutions charge for out-of-network ATMs can be competitive with major banks—even beating them in some cases. So don't assume that you will have less access or will pay more.

Won’t Changing Banks Negatively Affect My Credit Rating?

Unless you're also applying for a new credit card or loan at the same time, the answer is no, because neither savings nor checking accounts are associated with lines of credit. Financial institutions don't report changes in these types of accounts to credit rating agencies unless you open up a new line of credit at the same time.

Take Action

The following steps can be taken alone or in partnership with others if you prefer a more collaborative approach with shared responsibility and support.

1. Determine how much money you want to hold in your new savings, checking, and cash alternative accounts. If you have multiple accounts, consider whether you want to move forward in stages, moving one account first before tackling the next account.
2. Visit our companion website and create a short list of values-aligned financial institutions that interest you.
3. Interview your candidates to ensure they meet your needs and pick a new bank.
   • Download the questionnaire for this part of the process from our companion website and add any additional questions of your own.
   • Download the template spreadsheet to fill out as you conduct interviews.
4. Open your new account.
   • In some instances, you can open an account online, which makes this part of the process extremely easy. Most likely you'll need your SSN and some form of identification for this process.
   • Fund your new account with a deposit that's large enough to eliminate monthly fees.
   • Order your checks and ATM cards. They usually take one to two weeks to arrive.
5. If you're paid through direct deposits, have those—and any other automatic deposits—redirected to your new account. Do this as soon as you can after opening your new account.
   • To make this process easier, get a direct deposit authorization form from your new bank. Make sure it includes your new account information. Give this to your employer or any company/individuals that make direct deposits to your account, along with a voided check (if requested) from your new account.
   • Ask when the payment to your new account will take place. It could take one or more payment cycles, so be sure to watch your new account for the switch.
6. Once your direct deposits are being sent to your new account, update your automatic bill payment systems.
   • Make a list of any businesses that automatically debit your account for their bill payments. You can do this by going back through your bank statements. If you think you may have automatic deductions that occur less frequently, that is, quarterly or annually, you might want to look back through a year of statements.
   • Use this opportunity to do financial “housecleaning,” eliminating any recurring services you no longer need or want.
   • To make this process easier, get an automatic payment authorization form from your bank. Make sure it includes your new account information before you send it to the businesses on your list.
   • If necessary, transfer more funds to your new account to be sure that as automatic withdrawals start taking place, there are sufficient funds in the account to cover the payments. Leave enough money in your old account to cover checks that haven't cleared or automatic payments that may still be made.
7. Capture any information about recurring payments that you have set up through your old online bill payment service. Enter this information in your new online service.
8. Once you have switched all your recurring transactions and bill payments and you are comfortable that everything is working, wait one to three months to ensure there are no unexpected transactions in your old account. Also confirm that all outstanding checks have cleared.
9. After your waiting period has ended, shift any remaining funds to your new account.
   • Before closing your old account, confirm that all outstanding checks have cleared and save PDFs of any statements you might need. If you think you'll need these records for tax purposes, check the IRS website to verify how long you should be saving these records, as circumstances can vary.
   • Close your old account, following your old bank's procedures.
   • Caution: Do not assume your account has been closed just because there is no money left in it. Your old bank will likely continue to charge fees on an empty account, unless you officially close it using their procedures.
10. Write a cordial letter to the CEO of your old bank explaining why you left. You can find a template for this on our companion website.
11. Pat yourself on the back for a job well done and think about all the people that you will be helping through your cash deposits, moving forward.