After taking over the retail branches of personal and business bank account provider Northern Rock, Virgin Money has come forward by releasing the interest rates on the savings products it will be offering.
Virgin Money is offering 2.85 per cent on both their new cash ISA and its instant access saver, though the ISA rate is of course not subject to taxation. Both products have no withdrawal penalties and neither use introductory bonus rates to inflate their returns for the first year; what you see is what you get with the new retail banking provider, with the stated aim of providing value in the long term by not pulling any rugs out from its customers’ feet.
In the current retail banking landscape, this is somewhat rare, since many banking providers will send ISA customers scrambling for a new offer after the introductory bonus rate expires after a year. In fact, 2011’s average cash ISA rate was only 0.53 per cent after expired bonus rates were taken into account.
While it does not top the instant access best buy tables, Virgin Money’s ISA rate is competitive with the heavy hitters, as ING Direct offers a 3.0 per cent ISA and Nationwide has a 3.1 per cent offering in the same category. However, where the new Virgin Money offering truly shines is by keeping its rates stable after the first year while competitors’ rates begin to drop precipitously, experts added.
In the instant access savings account tables, both Nationwide and ING Direct lead as well, with a 3.12 per cent and 3.10 per cent savings product respectively. However, the ING Direct offering’s rate will drop like a stone to only 0.5 per cent after a year, while the Nationwide deal only offers a limited number of withdrawals free from penalty.