Every week Moneywise’s product researcher Tom Wilson picks out his favourite deal. This week – Virgin Money’s genuinely fee-free current account.
What’s the deal?
Virgin Money’s Essential Current Account is designed to help people kick an expensive overdraft habit. It’s free to use, and it won’t clobber you with fees and interest charges as it won’t let you go overdrawn.
Why should I care?
If you find it difficult to keep your finances in check, this account could save you a small fortune. One in four people have borrowed beyond their overdraft limit, and they’ve been charged £1.2 billion in the process, according to a recent report from the Competition and Markets Authority.
Virgin isn’t the only bank to offer a no overdraft account, also known a basic account, but it uniquely pays 1% interest on in-credit balances up to £100,000. Its peers pay nothing at all.
What’s the catch?
I’m struggling to find it.
Some banks only offer basic bank accounts to people who don’t qualify for another account, but Virgin’s Essential account is available to anyone on request.
Some banks also force people onto accounts with monthly charges once they’ve got back on top of their finances, but Virgin doesn’t do that either.
Virgin does say that only “some” services are available via phone or online banking, but the basics are covered.
What are my other options?
Most of the high street banks offer some version of basic bank accounts, including the following:
- Co-operative Bank
- Lloyds Banking Group (includes Lloyds, Bank of Scotland and Halifax)
- Clydesdale Bank (and Yorkshire Bank)
- RBS Group (includes RBS, NatWest and Ulster bank) brands)
However, you won’t get interest on in-credit balances anywhere else.
Where can I find out more?
Visit a Virgin Money branch, or virginmoney.co.uk.