Virgin Money Brighter Money Bundle review: get 5% on savings and earn cashback

With a gift card, cashback and a generous savings rate on offer, Virgin's two new Brighter Money Bundle current accounts are among the best we've seen for some time.

Being a saver isn’t easy at the moment.

Inflation has been rocketing, with the latest data from the Office for National Statistics showing that the consumer prices index measurement stands at 5.4% for the 12 months to December, the highest level it has reached in 30 years.

And as inflation grows, it becomes tougher to find a savings account that beats it, therefore delivering an actual return on the money you set aside. Indeed, there isn’t a single savings account that does that at the moment.

There is, however, a new top-paying account, that at least comes close to matching inflation, and it comes from the slightly unusual position of being a current account rather than a dedicated savings deal.

Virgin Money Brighter Money Bundle

The new top-paying current account comes from Virgin Money, through its Brighter Money Bundles promotion.

With both the Virgin Money Club M Plus account and the Virgin Money Club M account, savers can enjoy a variable rate of 2.02% AER plus a 3% fixed rate bonus for the first 12 months.

That means a current rate of 5.02% AER for the first year.

As with most current accounts, there is a strict limit on the balance you can earn such a massive rate of interest on ‒ it’s only paid on balances of up to £1,000, meaning a maximum of £50 interest. 

Alongside that beefy interest rate, new account holders will also get a £100 Virgin Experience Day gift card if they switch using the Current Account Switch Service, with at least two direct debits. 

You’ll also need to download and log in to the Virgin Money mobile app and pay in at least £1,000.

Should you pay a monthly fee to get more perks?

An important question to ask here is what the cost may be for you to benefit from that killer rate, particularly as it’s being offered on two separate accounts.

The good news is that, with the M Plus account, you don’t have to pay a penny as it is a free account.

However, the Club M account is a packaged current account.

These accounts offer you a range of additional features, but come with a monthly charge.

With the Club M account for example, you benefit from things like worldwide travel insurance and breakdown cover, but you will need to shell out £14.50 a month in return.

As always with packaged accounts, the big test is how often you will use those extra features.

You will be paying £174 for this account, which is a lot of money.

If you are happy with your breakdown cover and don’t want to switch, or even don’t drive, then this account may not hit the spot.

Similarly, if you have no intention of travelling, and therefore making use of the travel insurance, then you will be better off going with the budget-friendly M Plus account.

Help with my savings

Both of these accounts also come with a linked savings account. With the M Plus it’s the M Plus Saver, while the Club M comes with the Club M Saver.

The idea is that you can get into the savings habit this way, putting money aside regularly to build up a decent savings pot for when you really need a helping hand.

Be warned though, these savings accounts aren’t going to deliver a mammoth return by any stretch of the imagination, as they come with an interest rate of just 0.35%.

Get paid to shop

Another added benefit of the Virgin Money current accounts is that you can earn cashback when you shop with your debit card at certain retailers.

The cashback rates vary by retailer, and include names like Costa, L’Occitane, WH Smith, Morrisons and Burberry.

Obviously, how useful this perk is depends on how regularly you shop with those particular stores, as well as whether you prefer to shop using a rewards credit card. 

Getting a return on your savings

It’s notable that since the turn of the year, Moneyfacts reckons that a host of savings deals ‒ whether easy access or longer-term bonds ‒ have been pulled, leaving savers with fewer options.

The last few years have also seen a succession of interest-paying current accounts slash the returns on offer.

So it’s exciting to see Virgin Money raising the bar with such an eye-catching rate, even with the caveat that you only get to enjoy it on a relatively small amount of cash.

There are a couple of other current accounts worth flagging up if that is your preferred route of earning a return on your money. 

Nationwide Building Society pays 2% on its FlexDirect account for example, on balances of up to £1,500.

That rate runs for the first 12 months, before dropping to 0.25%. It’s a fee-free account, and you can help yourself to a £125 joining fee if you switch using the Current Account Switch service.

Alternatively, you can earn up to 1.5% with the Vantage accounts from Lloyds and Bank of Scotland.

These pay tiered rates, starting at 0.6% on balances between £1 and £3,999 ‒ you’ll have to have between £4,000 and £5,000 to get the top rate.

You’ll also need to pay at least £1,000 a month (rising to £1,500 for the Lloyds version), with two direct debits and stay in credit.