Virgin Money launches digital current account paying 0.5% interest

17 December 2019

Virgin Money aims to "disrupt" the UK financial services market with new interest-paying current account

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Virgin Money has launched a new digital current account paying 0.5% interest on in-credit balances. 

Customers will also have access to a linked easy access account paying interest on total balances at 1%.

The current account is available to customers through the Virgin Money mobile app, online and telephone as well as in branch.

It offers a variety of features including budgeting, spending and savings tools. Customers will also benefit from fee-free debit card transactions and ATM withdrawals overseas.

Cheques can be paid in electronically through the account app using a smartphone camera.

The account charges a flat rate of 19.9% EAR on all overdrafts and will have an Apple Pay and Google Pay enabled contactless debit card.

While Virgin Money claims that its new account will disrupt the banking industry, many of the features it currently offers are commonplace among existing challenger banks such as Starling Bank and Monzo.  

Virgin Money says that further enhancements will be made to the account in 2020 including the introduction of fee-free MasterCard debit card transactions abroad and a new rewards scheme.

Fergus Murphy, group personal banking director for Virgin Money, says: “The launch of our new current account marks the start of an exciting journey to transform our offering to customers and disrupt the financial services market in the UK.

“There’s plenty more to come as we improve the digital customer experience by introducing new functionality within the mobile app and offering even more value to customers through the introduction of other Virgin company rewards.”

The new account is protected by the Financial Services Compensation Scheme (FSCS) on balances up to £85,000. 

Virgin Money was purchased by Clydesdale and Yorkshire Banking Group (CYBG) in 2018. Customers of the CYBG digital app, the B Account, will eventually be transitioned into this new Virgin Money account in an 'ongoing process.'

However, the bank tells Moneywise this will be undertaken automatically and there is no action to take on the customers' part. 

How it compares

In today's low interest environment, few current accounts pay interest on current account balances. 

Starling Bank’s Personal Current Account which also pays in-credit interest, offers an alternative digital account to Virgin Money.

The account pays 0.5% AER on balances up to £2,000 as well as offering 0.25% on balances up to £85,000.

Neither Starling Bank nor Virgin Money require a minimum monthly pay-in to access the interest. You just have to stay in credit.

Some banks offer higher levels of interest on in-credit balances, for example the Nationwide FlexDirect account pays 5% on balances of up to £2,500 for the first 12 months.

You will, however, have to pay in a minimum of £1,500 a month to access the interest.

The table below shows a round up of the current-accounts paying interest on the market.                  

Account Interest  Fee Pay-in
Nationwide FlexDirect 5% on balances of up to £2,500 No £1,500
TSB Classic Plus 3% on balances up to £1,500 No £500
Bank of Scotland Vantage 2% on balances between £4,000-£5,000 No £1,000
Lloyds Bank Club Lloyds 2% on balances between £4,000-£5,000 £3 per month if you don't stay in credit £1,500
Santander 123 Current Account 1.5% on balances up to £20,000 £5 per month £500
Tesco Bank Current Account 1% on balances up to £3,000 No £750
Starling Bank Personal Current Account

0.5% on balances up to £2,000

0.25% on balances up to £85,000

No No
Virgin Money Digital Current Account 0.5% on balances up to £2,000 No No

Comments

Santander123 is only 1.5% for up to £20,000

Santander123 is only 1.5% for £20,000 not £30,000
Please correct!

Thank you for spotting that,…

Thank you for spotting that, we have corrected. Our apologies.

Moneywise Edmund

Santander 123 interest rate data

You've made a typo in your data table, by suggesting that Santander pay 1.50% interest, up to an account balance of £30,000.
They only pay this rate up to £20,000 according to their website and pay nothing above £20,000.

Thank you for spotting that,…

Thank you for spotting that, we have corrected. Our apologies.

Moneywise Edmund

Current account interest

The article on Virgin digital account compares it with other accounts.
The Nationwide account only pays 5% for the first 12 months then is reduced
The Santander rate of 1.5% is only available on balances up to £20,000 not £30,000 as stated

Thank you for spotting that,…

Thank you for spotting that, we have corrected. Our apologies.

Moneywise Edmund

virgin 0.05%

Are virgin having a laugh,What did they do pull this figure out of a hat.I must admit i had to check the date thinking it was April the 1st HAHAHA.

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