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Virgin Money ISA Review 2020 – Is it Worthwhile?

Know everything about Virgin Money ISAs, how much they pay and how safe your funds are.
Kane Pepi
Author: Kane Pepi

Last Updated: March 17, 2020

Virgin Money company logo

Are you looking to inject a lump sum of cash into a risk-free investment product? Or maybe you’re looking to put a bit of cash to one side at the end of each month? Either way, investing in a UK-based ISA is a 100% risk-free way of making long-term gains. While the gains are arguably minute in comparison to the stocks and shares space, as are the underlying risks.

Although ISAs are typically offered by banks and building societies, did you know that the likes of Virgin Money is now involved in the ISA arena? As such, we have created an in-depth review of what Virgin Money ISAs you can invest in, how much they pay, whether you need to lock your money up for a fixed term, and most importantly – how safe your funds are.

You have nothing to worry about in placing your funds with a non-traditional institution like Virgin Money. Much in the same way as a conventional bank or building society, Virgin Money is covered by the FSCS. As such, you’re protected up to the first £85,000.

Pros and cons of Virgin Money ISAs

The Pros

  • Backed by the FSCS  – protected up to the first £85,000
  • Variety of ISAs available
  • Competitive rates up for grabs
  • Complete the entire process online
  • Choose between an Easy Access ISA for convenience or a Fixed ISA for higher rates

The Cons

  • Not as established as traditional banks and building societies

Virgin Money ISAs: What ISAs are offered?

Virgin Money company logo

Although Virgin Money is relatively new in the ISA space – and in the wider investment space for that matter, the institution now offers a good selection of accounts. This means that you have a range of factors to consider, such as whether you want to prioritize easy access of your money or higher interest rates.

As such, we have listed all of the ISAs currently being offered by Virgin Money, alongside a brief breakdown of the key points.

1. 1 Year Fixed Rate Cash ISA - 1.40% AER per year

First up we have the 1 Year Fixed Rate Cash ISA. In a nutshell, Virgin Money will offer you a very competitive 1.40% AER on the money you invest. This is great, because a number of major players in the ISA space barely surpass 1% on their fixed-term accounts. However – and as the name suggests, you will be required to lock your money away for at least 1 year.

Upon reading through the terms and conditions of the ISA in more detail, Virgin Money notes that you might be able to make a withdrawal request, albeit, you will lose 60 days’ worth of earned interest. As such, you should only proceed with this particular ISA if you are confident you won’t need the money. What we also like about the 1 Year Fixed Rate Cash ISA at Virgin Money is that the 1.40% AER rate is fixed.

This is great, as you will always know exactly how much your money is going to be worth at the end of the term. For example, if you invested £1,000, this would be worth £1,014 at the end of the 12 months. In terms of the fundamentals, you can open the 1 Year Fixed Rate Cash ISA from just £1, and all applications can be made online in around 10 minutes.

Key Points:

✔️ Very competitive interest rate of 1.40% AER per year

✔️ Open the account from just £1

✔️ Interest rate is fixed – always know how your money will be worth

✔️ Withdrawals are penalized at 60 days’ worth of earned interest

✔️ Standard lock-up period is 1 year

✔️ No fees for transferring existing ISAs in

2. 3 Year Fixed Rate Cash ISA - 1.71% AER per year

If you are looking for the highest Cash ISA available at Virgin Money, then look no further than the 3 Year Fixed Rate Cash ISA. In return for locking your money away for three years, you will get a whopping 1.71% AER per year. While this might not sound like a lot for a three-year term, you need to remember that you will also benefit from compounding interest along the way.

On the other hand, it is crucial that you only choose the 3 Year Fixed Rate Cash ISA at Virgin Money if you are confident you won’t touch it. As we noted above, upon reading through the terms and conditions it appears that while Virgin Money will permit a withdrawal before the term concludes, you will be penalized. Moreover, the penalty attached to the 3 Year Fixed Rate Cash ISA is higher at 120 days’ worth of interest.

Apart from the above, everything else remains constant with the 1 Year Fixed Rate Cash ISA. As such, you can get started by investing just £1, and you can open an account online in less than 10 minutes.

Key Points:

✔️ Very competitive interest rate of 1.70% AER per year

✔️ Open the account from just £1

✔️ Interest rate is fixed – always know how your money will be worth

✔️ Withdrawals are penalized at 120 days’ worth of earned interest

✔️ Standard lock-up period is 3 years

✔️ No fees for transferring existing ISAs in

3. Double Take Cash ISA - 1.45% AER per year

If you’re looking for a competitive rate of interest, but you want a bit more flexibility with accessing your funds, then we would suggest checking out the Double Take Cash ISA available at Virgin Money. First and foremost, this particular ISA pays a competitive rate of 1.45% AER. Take note, the interest rate is variable, meaning that it can change at any time. If it does, Virgin Money will give you at least 14 days’ notice in writing.

Nevertheless, unlike the 1 and 3 year Fixed Cash ISAs – which will always penalize you for making an early withdrawal, the Double Take ISA permits two withdrawals per calendar year. Once your two annual withdrawals have been made, the only way that you will be able to access your money before the turn of the year will be to close the account.

As such, you should try to plan in advance if you think there is a chance you’ll need to access it. As is the case with the other ISAs we have discussed thus far, Virgin Money allows you to invest from as little as £1, all the way up to £100,000. However, you should refrain from investing any more than £85,000 as anything above this won’t be protected by the FSCS.

Key Points:

✔️ Interest rate of 1.45% AER per year

✔️ Open the account from just £1

✔️ Interest rate is variable – so it could change at any time

✔️ Permitted to make up to 2 withdrawals per year

✔️ No fees for transferring existing ISAs in

4. Easy Access Cash ISA - 0.50% AER per year

If you really don’t want to lock your money away – and you feel that two withdrawals per year is still too restrictive, then the only the option available to you is that of the Easy Access Cash ISA. As the name suggests, you can make as many money withdrawals as you see fit without incurring any financial penalties. The ISA doesn’t come with a traditional debit card, so if you do need to access the funds you will need to perform a bank transfer, or transfer them to another Virgin account.

As great as the flexibilities of unlimited fee-free withdrawals are, this does come at a cost. This is because the Virgin Money Easy Access Cash ISA pays a mere 0.50% AER per year. This is significantly less than the other Virgin Money ISAs we have discussed thus far, so if you do want a higher rate of interest, you will need to consider adjusting your withdrawal allowances.

In terms of the interest rate itself, this is a variable offer. As you know now, this means it can change at any time. Moreover, you can choose from having the interest paid annually or at the end of each month. If you choose the former, this is paid every March. Finally, you can open the Easy Access Cash ISA online from a deposit of just £1.

Key Points:

✔️ Low interest rate of 0.50% AER per year

✔️ Easy Access – Make as many withdrawals as you like without being penalized

✔️ Interest rate is variable – so it could change at any time

✔️ Choose to receive your interest annually or at the end of each month

✔️ No fees for transferring existing ISAs in

5. Help to Buy ISA - 2.50% AER per year

The final ISA available at Virgin Money is that of its Help to Buy ISA. As such, if you’re not looking to buy your first home, then this won’t be suitable. However, if you are, then the Help to Buy ISA being offered by Virgin Money is well worth considering. Firstly, the ISA comes with a decent annual rate of 2.50% AER. This is much higher than the other ISAs being offered by the provider.

Secondly – and perhaps most importantly, you will also get a 25% boost on your deposits from the UK government. As such, you’ll get an extra £50 for every £200 that you deposit. Take note, this is only up to a maximum deposit amount of £12,000 – so the maximum amount you can get from the government is £3,000. Moreover, the funds can only be used to assist with buying your first home.

Furthermore – and as is the case with all Help to Buy ISAs, you can initially invest £1,200 during the first month of opening the account. After that, you can only inject £200 per month. On the other hand, there is nothing stopping you from putting your remaining annual allowance into another ISA account at Virgin Money.

Key Points:

✔️ Competitive interest rate of 2.50% AER per year

✔️ Also receive a 25% boost from the UK government

✔️ Government boost is up to a maximum of £12,000 in deposits

✔️ Invest £1,200 in your first month and then £200 a month after that

✔️ Put the rest of your annual ISA allowance into another Virgin Money ISA

Screengrab of Virgin Money saving products page

FAQs

Is Virgin Money covered by the FSCS?

Much like a conventional bank or building society, Virgin Money is covered by the FSCS. This means that your ISA savings are protected up to the first £85,000.

Can I withdraw my money from a Virgin Money ISA?

This depends on the specific ISA you are looking to open. If you want an unlimited number of fee-free withdrawals, then you will only get 0.50% AER in interest. However, if you are happy to lock your funds away for up to 3 years, this goes up to a whopping 1.71% AER, albeit, you can't touch the funds until the term concludes.

What is the minimum deposit amount to open an ISA at Virgin Money?

All of the ISAs offered by Virgin Money allow you to get started with just £1.

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Kane Pepi

Kane holds academic qualifications in the finance and financial investigation fields. With a passion for all-things finance, he currently writes for a number of online publications.