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Virgin Money launches 10% current account interest bonus

Virgin Money launches 10% current account interest bonus
Paloma Kubiak
Written By:
Paloma Kubiak
Posted:
01/05/2024
Updated:
02/05/2024

Virgin Money has launched a current account switch deal offering a 10% interest bonus on top of its standard 2% rate, meaning newbies can potentially earn 12% gross for a year.

Savers switching their everyday banking to one of three Virgin Money current accounts can net a bonus rate of 10% gross/10.47% AER (fixed) on balances up to £1,000 for a year.

This ‘inflate your rate when you switch’ bonus is available on the following current accounts:

 

Now, as the M Plus Account and Club M Account already offer in-credit interest of 2% gross/2.02% AER on balances up to £1,000, it means new switchers to either could earn 12% gross/12.68% AER cumulatively. There’s no standard in-credit interest on the M Account, but the 10% interest bonus applies to it.

The 10% bonus applies to your up to £1,000 current account balance from 1 July 2024 to 30 June 2025, but you’ll earn the 2.02% AER (variable) on the M Plus or Club M account as soon as it’s opened.

Meanwhile, the switch offer applies to eligible accounts opened by 31 May 2024, or sooner if necessary, though Virgin aims to give customers notice if it’s withdrawn earlier than anticipated.

As you’d expect, there are a number of criteria that need to be met, including:

  • Opening an M, M Plus or Club M Account by 31 May 2024, either via the app, online or in branch
  • Using the Current Account Switching Service (CASS) to fully switch an existing current account from another provider by 26 June 2024
  • This must include at least two direct debits

 

Virgin confirmed there’s no minimum or monthly deposit required, just as long as you meet the criteria set out above.

You can’t already hold an M, M Plus or Club M current account, and if you’ve closed one since 30 April 2024, you won’t be eligible.

Another point to note is that all three Virgin current accounts come with a linked savings account, offering 2.48% gross/2.5% AER (variable) on balances up to £25,000. Further, there are zero fees when using the card to spend abroad.

Graeme Sands, head of personal banking at Virgin Money, said: “We know how important it is for savers to be able to make the most of their money in the current environment, which is why we’ve launched this brand-new switching offer. We’re committed to helping our customers achieve their financial goals and want to empower them to boost their money in the way that works best for them, while also offering them a range of Virgin Money perks, such as fee-free spending abroad and cashback on their everyday spending.”

How good is this switch offer?

The last current account switch bonus offer vanished last week, but savers were urged to continue to vote with their feet, but look at other perks instead. However, for many, an up-to-£200 hard cash switch offer eased financial pressures, with many lamenting their withdrawal from the market.

It’s also important to understand this is 10% interest, but it essentially means £100 in your pocket.

Alastair Douglas comment, CEO of TotallyMoney, said: “The new Virgin Money current account offer advertises an inflation-busting headline savings rate of 10%, but the reality is that it’s capped at £1,000, representing earnings of £100 if a customer locks in their money over 12 months. And locking in their customers is what the banks are now looking to do.

“If that’s the direction we’re moving towards, then let’s hope we see greater transparency in how these products are advertised, with clearly outlined terms and conditions to how customers can secure switching bonuses. Otherwise, it’s likely the Financial Ombudsman will see even more complaints from customers about current accounts over the course of this year.”

Rachel Springall, finance expert at Moneyfacts, said: “Switching incentives are relatively barren at the moment, so it’s exciting to see Virgin Money launch an enticing offer, which may draw the attention from consumers looking to boost their savings.

“As with many other current accounts, there is a limit on the balance [that] can earn interest, so savers will need to crunch the numbers to see if it’s a worthy choice for them. However, the bonus 10% gross rate is fixed, but is only available to new M Account, M Plus Account, and Club M Account customers that meet Virgin Money’s set criteria.

“Those looking to maximise the interest they earn on larger pots would be wise to consider short-term fixed rate bonds, but if they want some flexibility, then they can earn more than 5% on an easy-access account at the moment.”

Related: How to get an inflation-beating 7% interest rate without tying up your savings for years