Virgin Money aims to 'disrupt' the UK financial services market with new interest-paying current account
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.
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.
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 from £4,000-£5,000 | No | £1,000 |
| Lloyds Bank Club Lloyds | 2% on balances up to £5,000 | £3 per month if you don't stay in credit | £1,500 |
| Santander 123 Current Account | 1.5% on balances up to £30,000 | £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 |
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