Virgin Money current account customers now have access to a market leading savings rate of 1.56 per cent.
The linked savings account knocks Chase Bank off top spot as the best paying easy-access access savings deal, albeit only on balances up to £25,000. For balances above £25,000 the rate drops to 0.75 per cent.
The account is available to anyone with a Virgin Money M Plus Account, a Virgin Money Club M Account or Virgin Money M Account with the rate increase being automatically passed onto existing customers.
Rate hike: Virgin Money increased the savings rate on its popular linked savings accounts. The rate rises from 1 per cent to a market-leading 1.56 per cent for all new and existing customers.
This means a Virgin current account customer with £25,000 stashed away in the linked saver account will earn £393 in interest over the course of one year.
It comfortably beats the best buy in our independent best buy easy-access tables, offered by Cynergy Bank, paying 1.32 per cent.
It also beats the 1.5 per cent savings account, linked to the Chase current account that was launched in March.
Hugh Chater, chief commercial officer at Virgin Money said: ‘Following the Bank of England’s recent base rate increases, our new market-leading rate gives consumers more reasons to bank with Virgin Money.
‘As well as rewarding customers with Virgin Points, this boost to our linked savings rates means we can offer both new and existing customers even better value for their savings.’
Virgin vs Chase – which is best for savers?
Virgin Money will be hoping its new linked savings rate will entice new customers to bank with it.
Chase Bank has attracted more than half a million current account customers in as little as eight months since it launched in the UK last September.
Much of its success can be put down to the array of benefits that come from opening an account.
Chase’s 1.5 per cent linked savings places no restrictions on withdrawals and is paid on balances up to £250,000 – ten times more than what Virgin Money is prepared to paying 1.56 per cent on.
This means that for someone with considerable savings built up, Chase will likely still be the superior deal.
No fees or charges: When abroad, Chase won’t charge for using its account. Its currency converter uses Mastercard’s exchange rate, with no additional transaction fees or mark-ups.
For example, were both deals to remain the same, someone depositing £50,000 in the Chase account would end up with £755 after one year, whereas someone saving the same amount with Virgin would end up with £581.
The Chase account also offers 1 per cent cashback on spending for the first 12 months, albeit with some exceptions.
It offers a fee-free debit card abroad, so you won’t be charged any fees by Chase when using their card when traveling, including for cash withdrawals at ATMs.
It also offers an automatic regular savings function that allows customers to round up their spare change to the nearest £1 with a 5 per cent interest rate boost.
Last month, it introduced a referral scheme rewarding customers with £20 each time they successfully refer someone into opening a Chase current account, up to a limit of £400 in total. However, this is ending as of 11.59pm Tuesday 7 June.
However, Virgin Money may feel like it offers equally strong incentives to entice new joiners to bank with it.
Virgin Money’s current account switch incentive offers new customers 20,000 Virgin Points to spend via its rewards club Virgin Red.
Virgin Red is a rewards club that turns everyday spending into points. Once you are a member, you can earn and spend Virgin Points across almost 200 different rewards.
For example, it is currently offering a 12-bottle case of Virgin wines for 16,000 points.
You could also opt to buy a Greggs sausage roll for 200 points each time – that could equate to 100 sausage rolls.
At the other end of the spectrum you could book a return Virgin Atlantic flight to New York, Barbados or The Bahamas for 20,000 points, although taxes, fees and surcharges are paid separately.
You can find out more about the options available here.
Virgin Red: there are almost 200 rewards to choose from.
Those taking advantage of the current account switching deal will also benefit from 2.02 per cent interest on their current account balances up to £1,000.
Similar to Chase, Virgin won’t charge you for spending on your card or withdrawing cash when you’re abroad.
Which one you choose, will come down to personal preference.
The big advantage of the Chase current account is that there are no hoops to jump through. For example, you could simply set it up as a fee free secondary account.
With Virgin, you’ll need to switch your existing current account using the Current Account Switch Service and set up at least two Direct Debits.
However, the one complication of 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 at that.
The smartphone will need to run 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 benefit from the Virgin perks, you’ll need to apply online for an M Plus or Club M current account with Virgin. Although the M Plus account is free, the Club M account charges £14.50 a month.
You’ll also need to save £1,000 into the linked savings account and keep this in your account to receive the 20,000 points.
THIS IS MONEY’S FIVE OF THE BEST CURRENT ACCOUNTS
Lloyds Bank’s Club Lloyds account will pay £125 when you switch. There is a £3 monthly fee but this is waived if you pay in at least £1,500 each month. You also earn monthly credit interest on balances up to £5,000 and can choose a reward each year, including 6 cinema tickets.
Virgin Money’s M Plus Account offers £20,000 Virgin Points to spend via Virgin Red when you switch and pays 2.02 per cent monthly interest on up to £1,000. To get the bonus, £1,000 must be paid into a linked easy-access account paying 1% interest and 2 direct debits transferred over.
HSBC’s Advance Account pays £170 when you switch to the account. You need to set up two direct debits or standing orders and pay in at least £1,500 into the account within the first 60 days.
First Direct will give newcomers £150 when they switch their account. It also offers a £250 interest-free overdraft. Customers must pay in 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 on up to £1,500 – the highest interest rate on any current account – if you pay in at least £1,000 each month, plus a fee-free overdraft. Both the latter perks last for a year.