02 May 2024 , 10:11
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Virgin Money has launched a new current account bank switch deal - but instead of a cash payment, it offers customers a bonus interest rate.
The bonus interest rate of 10% gross/10.47% AER (fixed) is available on balances worth up to £1,000 for a year, so this would generate £100 in interest. There is currently no other savings account that would beat this rate. The new deal is available to people switching to the M Account, M Plus Account or Club M Account.
Both the M Plus Account and Club M Account already offer an interest rate of 2.00% gross/2.02% AER (variable) on current account balances up to £1,000. This means if customers are eligible for the extra 10% bonus on top, this would equate to 12% gross if you combined both rates.
There’s no standard in-credit interest on the M Account, but the 10% interest bonus applies to it. All three accounts come with a linked saver which offers 2.48% gross/2.50% AER (variable) interest on balances of up to £25,000. To get the switch offer, new customers must open a Virgin Money current account online or in store by May 31. The bonus applies for a whole year from July 1, 2024 to June 30, 2025.
As well as switching your account, you'll need to move across two direct debits by June 26. It comes as several current account providers have recently ended their offers of free cash to switch. A £175 switching offer from First Direct ended in April. Some banks had previously been offering as much as £200 to switch, before withdrawing their incentives.
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Rachel Springall, a finance expert at financial information website 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 which can earn interest, so savers will need to crunch the numbers to see if it’s a worthy choice for them.”
She added: “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.”