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Ask Rachel
Working in the financial industry for over 30 years, Rachel Thrussell is the leading independent expert on UK savings products. Her views are constantly in demand from both the industry and the press.
I have savings with both Clydesdale Bank and Virgin Money. Given the recent merger, what is the position regarding the £85,000 protected figure?
In October 2018, CYBG – the group that owns Clydesdale Bank, Yorkshire Bank and B – announced that it had completed a deal to buy Virgin Money. The move means that all CYBG’s retail customers will move over to the Virgin Money brand over the next three years. As it stands, you can have £85,000 invested in Virgin Money and the same amount invested in Clydesdale/Yorkshire Bank, and will still have full protection from the Financial Services Compensation Scheme (FSCS). However, given that all CYBG’s operations will be rebranded to Virgin Money over the coming years, it’s likely that the £85,000 protection limit will eventually apply to all brands in the group – which means that you may need to move some of your savings to a new provider if your combined total breaches the limit. Customers will be kept informed of the move however, and for now it’s business as usual.
This week's
average rates
| No Notice | 0.65% |
| Notice | 1.10% |
| Cash ISA | 1.30% |
| 1 Year Fixed Rate Bond | 1.48% |
| 2 Year Fixed Rate Bond | 1.66% |
| 3 Year Fixed Rate Bond | 1.89% |
| 4 Year Fixed Rate Bond | 2.14% |
| 5 Year Fixed Rate Bond | 2.15% |
| 15 January 2019 | |
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Bank switching incentives entice current account customers
The start of a new year can herald a new beginning for people’s finances, with the excess of the festive period inspiring many to take a closer look at their outgoings – and some consumers inevitably consider moving their current account in the process. Given that cash perks and switching incentives are returning to the banking sector, now could be a great time to do so!
Current accounts can be easily overlooked, with some consumers feeling it would be too much of a hassle to switch – but they could miss out on free cash or a nice monthly perk because of this. Indeed, current account providers have been upping their game recently, with some of the best deals offering far better perks than were available this time last year.
This includes Halifax’s Reward Current Account, which is offering £50 upfront to those who switch, plus another £85 in six months’ time, compared with the flat cash perk of £75 that was offered in January 2018. Similarly, NatWest is offering £150 upfront, compared with the £125 on offer a year ago, so providers are still looking to entice new customers – and that extra cash could easily be funnelled into a savings account for the new year.
“A new year can bring a new attitude when it comes to finances, and starting afresh with a new current account could be a consideration for many consumers,” said Rachel Springall, finance expert at Moneyfacts.co.uk. “Coincidently, January tends to be a popular time for providers to launch tempting free cash incentives to entice consumers to switch.”
However, Rachel points out that, “while any free cash perk is tempting, customers looking to move their current account must be sure that a short-term financial incentive isn’t the sole reason for leaving their existing provider, as the new account may be more expensive for dipping into an overdraft or it may not pay any credit interest, for example.” This is why it’s so important to compare the finer details of any account thoroughly before making the switch, taking factors such as overdraft fees into account.
A particularly important consideration for many savvy savers would be the in-credit interest available, alongside any additional cashback perks. These accounts can often be a valuable addition to consumers’ savings portfolios, with the FlexDirect account from Nationwide (for example) offering an in-credit interest rate of 5% on balances of up to £2,500, while Santander’s 123 Current Account pays monthly interest as well as cashback. Such accounts may not be suitable for a significant amount of savings, but for those looking to maximise their income streams for the year, they could be worth considering.
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