Virgin Money hikes savings rate to 1.71%

The account is back at the top of the easy-access tables.

Since the start of the year Virgin Money has been playing cat and mouse to be on top of the savings best-buy charts. But not long after they hike their rate, another provider shoots. Now, for the third time, it’s back at the top for new and existing customers.

Here’s what you need to know about both the new rate.

virgin money bank

Virgin Money savings rate reaches 1.71%

As of 27 July 2022, the linked M Saver account that comes with all Virgin Money current accounts is paying 1.71% AER (variable). This is only on the first £25,000 held in the account. Any savings above this amount will earn 1%.

The rate will apply to existing accounts as well as new ones.

Prior to this change, the bank was offering 1.56% interest in the M Saver, so that’s a jump of 0.15%. The increase is probably down to recent hikes in the Bank of England base rate and competition elsewhere which has seen dozens of accounts offering higher rates.

That’s in addition to the 2.02% you receive on the first £1,000 saved in the M Plus current account itself. Here’s my review of the current account.

How does it compare?

The previous 1.56% was still one of the best rates out there, with only Al Rayan Bank offering more at 1.6%. This new rate means it’s much better than all the other options.

It’ll be interesting to see if Chase or any other savings provider reacts in the next few days and pushes their offering to match or beat this.

We could also see another base rate increase in early August – perhaps by 0.5 percentage points – which would give more leeway to banks to pass some of it on.

But for now, this is the highest paying easy-access account, albeit on balances of up to £25,000. And apart from the Nationwide FlexDirect current account (5% on £1,500 for one year) you still can’t beat the 2.02% offered in the M Plus current account. So it’s a good combination.

Should you move your savings?

If you already have the Virgin Money account and have a decent amount of cash saved it makes sense to transfer up to £25,000 of your cash across to get the better rate. It should only take a few clicks so it’s relatively painless.

The difference of 0.21% versus Chase is worth just 21p for every £100 saved over 12 months. But the more you have the bigger the difference. This table breaks down the difference.

Savings movedExtra interest over 12 months

Of course, if you don’t have Chase Bank, the additional interest will be larger. If you’re earning 1%, then the extra 0.71% with Virgin Money would get you the following in a year:

Savings movedExtra interest over 12 months

With either option, it’s worth remembering that we’ll likely see more movement in the coming weeks and months (hopefully upwards), so you might want to move cash again.


Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.