Savings and banking round up: June 2018
In this month’s column, we look at:
- Why Bank of Cyprus’ easy access account paying 1.32% might not be the best choice
- Virgin Money’s new instant business savings account paying 1.20% – the pros and cons
- Why you should pack a Revolut card if you are going on holiday this summer
Bank of Cyprus 1.32% Easy Access
We’ve had a few enquiries at Savings Guru HQ from savers wondering why we haven’t included the new Bank of Cyprus easy access account in our best buys. The account pays 1.32% which is the best paying savings account which allows withdrawals without notice. It’s the best rate in the market in 2018 so far.
There is one principle reason we haven’t included it and that is because it is a bonus account. The actual interest rate on the account is 0.85% but it comes with a 12 month bonus rate of 0.47% - this is more than half of the underlying rate.
When bonus accounts originally came in to being, they were often used as a way of rewarding customers with a top up. This was sometimes for loyalty (e.g. to retain their customer when another product finished), for longevity (e.g. limited to customer of five years or more), or a short term sweetener to thank them for switching.
Now, we feel they are used increasingly with lengthy periods for the bonus to apply in the hope that customers will forget about them at the end of the time restriction and not move their money.
If savers are disciplined enough to diarise and switch when the bonus period ends, then the rate on this account is very attractive. However, for those who are not, both RCI Bank and Shawbrook Bank pay 1.30% on their instant savings account. Both have spent much of the past year in our best buy tables.
Bank of Cyprus:
Virgin Money 1.20% Business Access Account
Business accounts traditionally pay much lower interest for instant access than their personal counterparts. The best paying business instant savings account that we’ve been able to find at Savings Guru HQ this year is the 0.90% available from One Savings Bank owned, Kent Reliance.
We were naturally intrigued to see Virgin Money launch an account paying 1.20% and blowing everything else in the market out of the water. On top of a great rate, internet banking and a low minimum balance of £1,000, Virgin are also offering some great freebies – Virgin Money Lounges and Concierge.
The lounges are in eight locations around the country (with more on the way), including two in London, and offer free refreshments and Wi-Fi, newspapers, networking events and a great place to host a business meeting. The concierge service offers free membership for 18 months with assistance booking hotel, travel, restaurants and sold out music events and much more.
We decided this was all too good to be true but, unable to find a downside, we thought we’d open an account to find out. The online application was easy enough but, at the end of it, you then have to go through another process to register for online banking. We did this, only to be unable to see our new account. After contacting the savings team, we were advised they were very busy and would be in touch soon. 13 days later we are still waiting…
By contrast, we applied for an account with Kent Reliance which was opened there and then and took less than five minutes to complete the application and we were able to fund the account the same day and start earning interest straight away. The interest rate isn’t quite as good but amazing interest rates and perks aren’t much good if you can’t get to them!
We managed to sneak away from the Savings Guru office for a short holiday (Santorini as you ask – and yes it is beautiful!). Having long tired of paying expensive bank fees for overseas transactions or trying to guess the right amount of currency to take abroad, stumbling across the Revolut card in 2015 was a life changer for travelling.
One Revolut card can be loaded in Sterling, Euro and US Dollars with separate screens to manage each. Cards are topped up from your current account so you can limit the money on the card for security if you wish. Currency is bought at Interbank FX rates – which is as good as it gets for individuals – and the rate moves in real time so you can watch it and choose when you buy if you wish.
£200/€200 can be withdrawn free each month from ATMs and there are no payment fees or commission for presenting the Mastercard to pay. You can also see analytics on where you spend your money, should you want which can be quite revealing!
The Visa payment issue impacted just about every card provider and occurred while away. Revolut’s communication on this (despite its own Mastercard not having problems, customers topping up with Visa weren’t able to) was far better than any other bank or card provider with alerts in their mobile app to advise and prompt help from their chat service.
A card that will definitely be travelling with us in future!
As always, this article will be reproduced on our website with links to the providers and accounts mentioned.