Virgin Money current account customers now have access to a market-leading savings rate of 1.56%.
The Linked Savings Account knocks Chase Bank off the top spot as the best easy-to-access paid savings offer, but only on balances up to £25,000. For balances over £25,000 the rate drops to 0.75%.
Rate hike: Virgin Money has increased the savings rate on its popular linked savings accounts. The rate increases from 1% to 1.56%, the highest rate on the market, for all new and existing customers.
This means a Virgin current account customer with £25,000 stashed in the linked savings account will earn £393 in interest over the course of a year.
It comfortably beats the best buy at our easy access independent tables, offered by Cynergy Bank, paying 1.32%.
It also beats the 1.5% savings account, linked to the Chase checking account launched in March.
Hugh Chater, Commercial Director of Virgin Money, said: “Following recent increases to the Bank of England’s base rate, our new market-leading rate gives consumers more reason to do business with Virgin Money.”
“As well as rewarding customers with Virgin Points, this increase in our linked savings rates means we can offer new and existing customers even better value for their savings.”
Virgin vs. Chase – which is better for savers?
Virgin Money hopes its new linked savings rate will entice new customers to do business with it.
Chase Bank has attracted more than half a million current account customers in just eight months since its UK launch last September.
Much of its success can be attributed to the range of benefits that come with opening an account.
Chase’s 1.5% linked savings places no restrictions on withdrawals and is paid out on balances of up to £250,000, ten times what Virgin Money is willing to pay at 1.56 %.
This means that for someone who has accumulated considerable savings, Chase will probably always be the best deal.
No Fees or Charges: Abroad, Chase won’t charge for account usage. Its currency converter uses Mastercard’s exchange rate, with no additional transaction fees or markups.
For example, if the two offers remained the same, someone depositing £50,000 into the Chase account would end up with £755 after a year, while someone saving the same amount with Virgin would end up with £581.
The Chase account also offers 1% cash back on spending for the first 12 months, but with a few exceptions.
It offers a fee-free debit card abroad, so Chase won’t charge you any fees when using its card on the go, including ATM cash withdrawals.
It also offers an automatic regular savings feature that allows customers to round up their reserve currency to the nearest British Pound with an interest rate increase of 5%.
Last month it introduced a referral scheme rewarding customers with £20 each time they successfully refer someone to open a Chase checking account, up to a limit of £400 in total. However, it ends at 11:59 p.m. on Tuesday, June 7.
However, Virgin Money may feel like it offers equally strong incentives to entice new entrants to do business with it.
Virgin Money’s current account switching incentive offers new customers 20,000 Virgin Points to spend through its Virgin Red rewards club.
Virgin Red is a rewards club that turns everyday spend into points. Once you’re a member, you can earn and spend Virgin Points on nearly 200 different rewards.
For example, it currently offers a case of 12 bottles of virgin wines for 16,000 points.
You can also choose to buy a Greggs sausage roll for 200 points each time, which could equal 100 sausage rolls.
At the other end of the spectrum, you can book a roundtrip Virgin Atlantic flight to New York, Barbados or the Bahamas for 20,000 points, although taxes, fees and surcharges are paid for separately.
You can find out more about the options available here.
Virgin Red: Choose from nearly 200 rewards.
Those who take advantage of the current account switching agreement will also earn 2.02% interest on their current account balance up to £1,000.
Similar to Chase, Virgin won’t charge you for spending on your card or withdrawing cash while you’re abroad.
Which one you choose will depend on your personal preferences.
The big advantage of the Chase checking account is that there are no hurdles to jump through. For example, you can simply set it up as a secondary account at no cost.
With Virgin, you will need to switch existing checking accounts using the Checking Account Switch service and set up at least two direct debits.
However, the only complication with the Chase Current Account is that it’s an app-only service, so you’ll need a smartphone to run the account and a relatively new one.
The smartphone will need to be running iOS 14 and above, or have access to Google Play on Android 8.1 and above, which means some devices are not supported due to hardware limitations.
To receive Virgin benefits, you will need to apply online for an M Plus or M Club current account with Virgin. Although the M Plus account is free, the Club M account charges £14.50 per month.
You will also need to save £1,000 in the linked savings account and keep it in your account to receive the 20,000 points.
THESE ARE FIVE OF THE BEST MONEY CURRENT ACCOUNTS
Lloyds Club Account Lloyds Bank will pay £125 when you change. There’s a monthly fee of £3, but that’s waived if you pay at least £1,500 per month. You also earn monthly credit interest on balances up to £5,000 and can choose one reward each year, including 6 cinema tickets.
Virgin Money M Plus Account offers £20,000 Virgin Points to spend through Virgin Red when you trade and pays 2.02% monthly interest up to £1,000. To get the bonus, £1,000 must be deposited into a linked easy access account paying 1% interest and 2 direct debits transferred.
HSBC advance account pay £170 when you upgrade to account. You must set up two direct debits or standing orders and deposit at least £1,500 into the account within the first 60 days.
Direct premiere will give newcomers £150 when they switch accounts. It also offers an interest-free overdraft of £250. Customers must pay at least £1,000 within three months of opening the account.
Nationwide’s FlexDirect account comes with up to £125 cash incentive for new and existing customers. Plus 2% interest up to £1,500 – the highest interest rate on any current account – if you pay at least £1,000 a month plus free overdraft. These last two benefits last for one year.
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