Virgin Money launches market-leading 10% regular saver

Virgin Money has launched a new 10% AER fixed regular saver, making it the best savings account on the market by a long way. But, not everyone is eligible to open it.

Virgin’s handsome rate is a welcome sight in a sea of falling easy-access savings and fixed bonds rates – following the Bank of England’s first base rate cut in four years . According to Moneyfacts , the average regular savings account based on a £2,500 investment now stands at 5.07% gross, as of 7 August. This means Virgin Money’s 10% return is almost double the average.

The provider has been active in its efforts to woo customers lately, with the 10% interest it offered on its current account as part of its bank switching deal, back in May (this deal is no longer available). Then, just last month, Virgin Money launched the best one-year fixed savings deal . The bank’s latest savings account certainly catches the eye – but do you qualify for the regular saver and, if not, what are the alternatives?

Am I eligible for the Virgin Money Regular Saver?

The big caveat lies in who the saver is open to, as not everyone can get it. You need to have a current account with Virgin Money which was opened on or after 4 December 2019. You could also have originally opened a current account with Yorkshire Bank or Clydesdale Bank, and you’d be eligible for the Regular Saver account.

How does Virgin Money’s Regular Saver work?

The 10% rate is fixed for one year, so once you open the regular saver, you are guaranteed a 10% return until the account matures.

• You can pay in up to £250 a month in the saver and there is no minimum monthly  deposit required.
• Interest is only paid on a maximum of £250 a month – you can pay in more but any sum over this amount earns no interest. So over a year, the maximum you can earn interest on is £3,000.
• If you save less than £250 one month, the remaining allowance rolls into the next month. For example, if you save £100 in month one, the following month you could pay in and earn interest on up to £350.
• Virgin Money calculates interest daily and pays you quarterly on the last working day of March, June, September, and December.

If you save the maximum £250 a month, for 12 months and don’t withdraw any money during the year, you would earn £162.40 in interest when the account matures. And, more good news, while the rate is fixed, your cash isn’t. You can withdraw your money whenever you like.

How does it compare to other savings accounts?

Virgin Money’s 10% AER Regular Saver offers the best return on the market and it’s a fixed rate for 12 months, just at the point where other rates are dropping making it even more exciting. But, as it’s not available to everyone, we’ve rounded up some of the next best options.

Regular savings accounts
If you’re looking for a regular savings account , you can earn up to 8% AER with

Principality Building Society. But you will have to fix your cash for six months, and you can only deposit up to £200 per month.

First Direct is offering 7% AER and you can pay in slightly more each month – £300. But, like a lot of regular savers, you’ll need to be a current account holder to take advantage of this First Direct product.

A couple of other things to note if you’re considering opening a regular savings account: most providers will ask for a minimum monthly payment – although this can be as low as £20. In most cases there will be a maximum cao on how much money you can pay in each month.

Flexible accounts

If you’re on the hunt for a flexible account where you have more freedom, you can earn up to 5.2% AER on an easy-access account , with Cahoot.

Always read the small print, as these savings accounts usually have a number of limits and restrictions. For example, you can only earn interest on up to £3,000 in the Cahoot saver – any sum above this earns no return.

As the base rate cut is currently pushing savings rates down, you might think it’s time to fix your cash to get a guaranteed return. You can still find a one-year fixed savings account that earns up to 5.15% AER, from credit card provider MBNA. Plus, one of the UK’s most popular savings brands, NS&I just launched a bunch of new fixed British Savings Bonds , returning up to 4.6%. Those might be worth a look too.