Many of us don’t know what happens to our money when we deposit it into our bank accounts. We know that our banks and building societies are there to look after it until we need to use it. But what do they do with it whilst it’s in the bank?

Firstly, it doesn’t just sit there waiting for you to withdraw it. It goes into a larger pool of money, so it doesn’t sit in a separate bank account, for each account holder. Part of this money is then borrowed by your bank or building society and is lent out to other borrowers and invested into projects.

Don’t worry this won’t affect the amount of money in your bank account, it is still your money. Think of it as an IOU from the bank, they can’t just take your money and not replace it.

The biggest problem with them investing your money is that you don’t know where that money is going. Many of our high street banks are investing your money into non-ethical and unsustainable projects, including fossil fuels, weapons, tobacco, etc.

There are banks out there, however, that invest your money into greener and more sustainable projects. For more information see our articles on Green Finance and why green banking is important.