Richard Branson's new high street bank is offering an easy access account and a cash ISA each paying 2.85%, but how do they fare against the rest of the savings accounts on the market?
Here's a look at the Northern Rock acquisition and how those new savings accounts stack up against other accounts on the market.
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Northern Rock was nationalised in 2008 following its near collapse during the onset of the credit crunch.
On January 1, 2010, the bank was split into assets and banking before being put up for sale in the private sector five months later. In November 2011, Virgin Money announced that it was to buy Northern Rock.
Virgin's acquisition includes 75 Northern Rock branches across the UK, one million customers and just over 2,000 staff.
Sir Richard Branson pledged to create "a better kind of bank that we and the public will be proud of" and this week launched two new simple, gimmick-free savings accounts.
Gimmick-free
Unlike many of the leading easy access accounts, Virgin's Easy Access Saver, which is paying 2.85%, doesn't include an introductory bonus.
Savers who don't want the hassle of moving their money every year to benefit from the best rates might be interested, but it's important to note that the rate payable is variable and could erode over time.
Customers who choose to receive interest on a monthly basis get the same AER as those who choose annual interest and the account is available in Virgin Money branches on the high street, online, by post or by phone.
The Virgin Easy Access Cash ISA also carries a rate of 2.85% and allows transfers in from existing ISAs.
Jayne-Anne Gadhia, Chief Executive Officer at Virgin Money said: "These new savings products are designed to be simple, fair and transparent.
"They have an attractive headline rate, without a bonus, offering good value for customers. There are no differences in rate whether the customer chooses an ISA or a standard savings account."
How do they compare?
While there are higher savings rates to be found, many include introductory bonuses which, once lapsed, sink to far less competitive rates.
For example, the, Nationwide Building Society's MySave Online Plus account pays 3.12% annual interest before tax, but includes a bonus of 1.58%
The catch is that the bonus is only payable for the 12 months, after which the rate drops to a less competitive 1.54%
West Bromwich' Building society is offering the market-leading easy access cash ISA. Its WeBSave ISA 4 which is available exclusively through MoneySupermarket, pays 3.07% but includes a bonus of 1.07% until February 2013; bringing the rate down to 2.0% thereafter.
While their headline rates appear lower, Virgin's accounts don't have any introductory bonuses, so your rate isn't set to drop after a specific period. However, the 2.85% rate is variable and could actually change at any time.
Verdict
If you're new to savings accounts or you just want something straight-forward, then Virgin's bonus-less accounts might be of interest to you.
It means you won't have to go hunting for another good rate after 12 months because your introductory rate is ending, but the rate is variable and won't necessarily stay at 2.85%. It's therefore important to keep an eye on it as its competitiveness may erode over time.
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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