Virgin Money aims to shake up financial services market with new current account

Virgin Money has launched its first digital current account and mobile app as part of its bid to shake up the UK financial services market.

The launch of the account, which is being made available through the new mobile app, online, telephone and in-store, is part of a wider revamp of the Virgin Money brand.

The bank is aiming to break its bigger rivals’ stranglehold on the UK’s current account market.

The Virgin Money Current Account pays 0.5% interest on credit balances up to £2,000.

It also has a linked easy access savings account paying interest on total balances at 1%.

Many current accounts nowadays pay no interest on customers’ balances at all in the low interest rate environment.

Virgin Money said the new current account also features budgeting and savings tools and features which help customers easily identify and control spending across different categories.

Further enhancements to the account will be made in 2020 – and it will also offer rewards and loyalty benefits to customers, including from other Virgin companies, the bank said.

Fergus Murphy, group personal banking director for Virgin Money, said: “The launch of our new current account marks the start of an exciting journey to transform our offering to customers and disrupt the financial services market in the UK.

“The account, which includes a linked easy access savings account, gives customers complete control of their money, and includes helpful budgeting tools with the ability to create savings pots on their linked savings account, helping them achieve their savings goals.

“There’s plenty more to come as we improve the digital customer experience by introducing new functionality within the mobile app and offering even more value to customers through the introduction of other Virgin company rewards.

“And we know our customers love to travel, so, well ahead of the summer holidays, we’ll be making our new current account fee-free for debit card and ATM transactions overseas.”

Rachel Springall, a finance expert at Moneyfacts.co.uk, said: “This is an exciting current account launch and may well entice consumers looking for a decent deal for their everyday banking, to kickstart their savings habit, and really get to grips with budgeting.

“The run up to Christmas is likely to be an expensive period for many, so there could be consumers going into 2020 looking to rein in their spending and start afresh.

“Having an instant way to check all the outgoings and have tools to budget can make a big difference.”

Ms Springall highlighted Starling Bank as another potential alternative, as it also has a digital current account which pays in-credit interest.

She said: “As with any account, it’s important consumers weigh up all the charges and benefits before they commit.

“Digital current accounts are a fantastic choice for consumers who are looking to move away from the biggest high street banks – especially if they are getting little to no reward for their loyalty.”