New "Red Devils" savings account launches for Man Utd fans
Virgin Money has launched an easy-access savings accounts in partnership with Manchester United, paying savers 1.05% interest a year with a few extra perks – but it can be beaten.
Savers can deposit between £1 and £30,000, either in branch or via Virgin Money’s website.
As with the recently launched “Champions Bond”, all people who sign up for the “Red Devil” will join the United Rewards Scheme, which includes monthly prize draws for match day tickets, signed replica shirts and other prizes.
Additionally, for each Red Devil account opened by 7 August, the date of Man Utd’s Charity Shield match against league champions Leicester City, Virgin Money will donate £50 to the Manchester United Foundation, which runs coaching and education programmes for young people. To qualify for the donation, accounts must be credited with at least £100 before 21 August.
On rate alone, the Red Devil saver pays 1.05% interest, which can easily be beaten by other accounts.
RCI Bank is currently top of the table for instant access savings accounts, paying 1.45% AER. For more tax-efficient savings, the top easy-access cash Isa pays 1.3% from the Coventry Building Society.
If you’re willing to lock away your cash, the best one-year savings account pays 1.7%, from Turkish Bank UK, though that’s only available in branch. Alternatively, Ikano Bank pays 1.6%.
That said, the terms of the Red Devil account are relatively generous for savings accounts aimed at football fans. These accounts aren’t usually designed to reach the top of the best buy tables, but instead provide a way for savers to show their club loyalty.
West Brom fans, for example, can sign up for the Albion Advantage account, which pays 0.5% interest to savers, plus 0.75% to the football club. Fans also get a 5% discount in the club shop.
Manchester United fans might find the “Champions Bond”, also from Virgin Money, more appealing. It’s a one-year bond that pays 1.25% interest, doubling to 2.5% if Man Utd win the league.
Invidivual Savings Accounts were introduced on 6 April 1999 to replace personal equity plans (PEPs) and tax-exempt special savings accounts (TESSAs) with one plan that covered both stockmarket and savings products, the returns from which are tax-exempt. The ISA is not in itself an investment product. Rather, it’s a tax-free “wrapper” in which you place investments and savings up to a specified annual allowance where the returns (capital growth, dividends, interest) are tax-exempt (you don’t have to declare ISAs and their contents on your tax return). However, any dividends are taxed within the investment, and that can’t be reclaimed.
This is a mutual organisation owned by its members and not by shareholders. These societies offer a range of financial services but have historically concentrated on taking deposits from savers and lending the money to borrowers as mortgages, hence the name. In the mid-1990s many societies “demutualised” and became banks. One academic study (Heffernan, 2003) found demutualised societies’ pricing on deposits and mortgages was more favourable to shareholders than to customers, with the remaining mutual building societies offering consistently better rates. In 1900, there were 2,286 building societies in the UK; in 2011, there are just 51.
Where APR is the rate charged for money borrowed, Annual equivalent rate is how interest is calculated on money saved. The AER takes into account the frequency the product pays interest and how that interest compounds. So, if two savings products pay the same rate of interest but one pays interest more frequently, that account compounds the interest more frequently and will have a higher AER.