Focus on: 2.85% savings account with no bonus

Published:
11 January 2012
Topic:
News,Money,Savings,Product review

With the dust settled on Virgin's acquisition of Northern Rock, the newest-formed bank on the high street, Virgin Money, is offering an easy access savings account paying 2.85%.

Touting the new account as a gimmick-free savings account which doesn't rely on an initial bonus to inflate its rate, Virgin will be hoping to capture those customers who don't want the fuss of moving their money every year to get the best rate.

So, how does Virgin's straight-forward savings account stack up against the rest of the savings accounts on the market? We take a look at the details.

What's the deal?

The Virgin Easy Access Saver pays 2.85% on balances of £1 or more. You can invest up to £100,000 in the account, though only £85,000 is guaranteed under the terms of the Financial Services Compensation Scheme.

Unlike the vast majority of easy access savings accounts, the rate doesn't incorporate an introductory bonus, so the rate you see is always the rate you get.

The account also permits you to make unlimited withdrawals and deposits and offers the option of monthly or annual interest payments.

You can sign up for the account in Northern Rock branches, online or over the phone.

Any catches?

Though the headline rate isn't skewed by an introductory bonus which expires after a set time, the 2.85% rate is variable and therefore subject to change.

As a result you'll need to keep an eye on the rate and switch to another account if it starts to erode over time. The account has no required notice period or term, so switching won't be a problem.

The account's minimum operating balance is £1 and minimum withdrawals or additional deposits are also £1. You must be aged at least 16 years old to qualify for the account.

Verdict

There are many other easy access savings accounts on the market which appear to pay more than Virgin's new account - but this is because most include an initial12-month bonus.

Nationwide's MySave Online Plus Account for example, offers a rate of 3.12%, including a 12-month bonus of 1.58%. Once the bonus period has elapsed, the rate drops to 1.54%.

And, unlike the Virgin account, Nationwide's deal only allows one penalty-free withdrawal each year.

One of the closest contenders to Virgin's offering is West Bromwich Building Society's WeBSave Plus 2, an easy access account which pays 2.81% with no upfront bonus.

Like the Virgin account you can choose monthly or annual interest payments and make unlimited deposits up to £250,000. Unlike Virgin's account, however, you can only apply for the account online and you are only allowed one penalty-free withdrawal per year.

For savers looking for a flexible account and who don't want the hassle of chasing the best rate every 12 months, the Virgin Easy Access Saver is a great bet.

Please note: Any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct.

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About This Author

Mark Hooson

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Senior Writer

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