Bank launches another market-leading savings account paying 10% interest – is it worth it?
SAVVY savers can get access to a new market leading savings account, paying 10% interest.
Virgin Money has introduced a new savings deal for customers at the bank.
Under the new deal, Virgin Money customers can squirrel away a maximum of £250 a month in the account.
You do have the option to put more money into the account but you will not earn interest on anything over £250.
For example, if a customer put £250 in this account every month for 12 months they would have £3,162.40 by the end of the term – £162.40 being interest.
To take advantage of this offer, customers must been certain conditions.
Firstly, you must have a current account that you opened on or after December 4 2019.
Customers who opened a current account with Clydesdale Bank or Yorkshire Bank such as a Signature Current Account will also be able apply.
Also, the maximum balance you can earn interest on at the end of the 12 month fixed term is £3,000. The deal is fixed until July 31 2025.
Martyn James, consumer expert, said: “Virgin Money’s offer is interesting because it doesn’t have all the usual restrictions and requirements. But it’s only for loyal customers who have had an account since 2019.”
“And the big catch is you are limited to saving £250 each month, which means there’s a cap on the money that you can save to get the 10% rate.”
Is this the right offer for you?
This Virgin Media offer is currently the highest saving account on the market.
It trumps Principality BS regular savings account by over two percent.
The building society is offering customers eight percent interest for holding their savings with the bank.
This deal is running for six months, which is also less than Virgin’s 12 month term.
Savers can save up to £200 a month into this account.
The rate is fixed for six months and when this ends, a saver would have £1,227.53 if they put £200 a month into the account every month.
If the amount in your the account reaches £1,200, you will not be allowed to put anymore money into the account.
There are also a few downsides to the Virgin Media offer.
For starters, only customers who have had a current account since December 2019 are eligible.
The amount you can save each month is also capped at £250 if you want to get the 10% interest rate.
If you are interested in opening a savings account it is worth having a shop around and enquiring with banks to find the right one for you.
What other options are available for savers?
There are several types of savings accounts available to customers, so you need to make sure you select one that suits your circumstances.
Easy-access accounts and regular savings accounts, which allow greater flexibility when it comes to withdrawing your cash, but they tend to offer slightly lower interest rates.
If you’re happy to leave your cash in your account for longer then you can consider a fixed-bond or notice savings account.
Before opening a new savings account it’s always worth having a browse on price comparison websites.
Moneyfactscompare, Compare the Market, Go Compare and MoneySupermarket will help save you time and show you the best rates available.
These sites let you tailor your searches to an account type that suits you.
Easy-access savings accounts
Easy-access savings accounts allow you to deposit and access funds as and when you need without giving advance notice.
You can open an easy-access account with as little as £1, with no minimum deposit requirements.
This does mean rates tend to be lower, but if you want to have easy access to your cash this could be the option for you.
Notice savings accounts
Notice accounts offer slightly higher rates than easy-access accounts.
But you’ll need to give advance notice to your bank (up to 180 days in some cases) before you can make a withdrawal, or you’ll forfeit the interest.
Fixed-bond savings accounts
These offer some of the highest interest rates – but this comes at the cost of being unable to withdraw your cash within the agreed term.
If interest rates increase during your term, you can’t move your money and switch to a better account.
Some providers do allow withdrawals, but you may be charged an exit fee and will likely have to forfeit any interest gained.
How you can find the best savings rates
If you are trying to find the best savings rate there are websites you can use that can show you the best rates available.
Doing some research on websites such as MoneyFacts and price comparison sites including Compare the Market and Go Compare will quickly show you what’s out there.
These websites let you tailor your searches to an account type that suits you.
There are three types of savings accounts fixed, easy access, and regular saver.
A fixed-rate savings account offers some of the highest interest rates but comes at the cost of being unable to withdraw your cash within the agreed term.
This means that your money is locked in, so even if interest rates increase you are unable to move your money and switch to a better account.
Some providers give the option to withdraw but it comes with a hefty fee.
An easy-access account does what it says on the tin and usually allow unlimited cash withdrawals.
These accounts do tend to come with lower returns but are a good option if you want the freedom to move your money without being charged a penalty fee.
Lastly is a regular saver account, these accounts generate decent returns but only on the basis that you pay a set amount in each month.