Virgin Money tweaks its miles-earning savings account

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Virgin Money has launched a new version of the Virgin Atlantic 1-year Flying Club Savings Account.

This is an interesting product which no-one has tried before. You make a one-off deposit of between £1 and £1 million into a one year bond. No further deposits and no withdrawals are allowed over the one year period. Instead of cash interest, after one year you will receive 1,600 Virgin Flying Club miles for every £1,000 you save.

Full details are on the Virgin Money website here.

In case you are wondering exactly how this works, and whether you can escape Income Tax if you pay it on your savings (you can’t), this is your answer:

Virgin Money pays you interest based on a rate of 1.36%

Your interest is immediately taken back and used to purchase Virgin Flying Club miles at – effectively – 0.85p per mile

In terms of the income tax position, the interest should be included on any tax return and will count towards your Personal Savings Allowance, like any other savings interest

In general, I would be a buyer of Virgin Flying Club miles at 0.85p – except for the fact that I am sitting on over 1.5m of them between my wife and myself and that’s probably enough for now! You need to compare the notional 1.36% interest rate with comparable accounts from other institutions with a similar risk profile.

A new version of this account was launched this week. The interest rate is unchanged, but the savings term if you apply today runs to 20th January 2020. This means that you are actually putting your money away for 13 months.

You can find out more on the Virgin Money website here.

How to earn Virgin Points from UK credit cards (December 2021)

As a reminder, there are various ways of earning Virgin Points from UK credit cards. Many cards also have generous sign-up bonuses.

You can choose from two official Virgin Atlantic credit cards (apply here, one has a bonus of 15,000 points):

Virgin Atlantic Reward Mastercard

The UK’s most generous free Visa or Mastercard at 0.75 points / £1 Read our full review

Virgin Atlantic Reward+ Mastercard

15,000 points bonus and the most generous non-Amex for day to day spending Read our full review

You can also earn Virgin Points from various American Express cards – and these have sign-up bonuses too.

American Express Preferred Rewards Gold is FREE for a year and comes with 20,000 Membership Rewards points, which convert into 20,000 Virgin Points: