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Virgin launches digital current account – but is it any good?

Virgin Money has launched its first digital bank account, featuring a slick new app, linked easy-access savings account and branch service – but can it beat Monzo and Starling on their home turf?

Like the accounts from established digital rivals Monzo and Starling, Virgin's new current account is free and its app can track your spending and help with budgeting.

It also pays 0.5% interest on credit balances up to £2,000 and comes with a linked easy-access savings account paying 1% (both AER variable). While these rates can be beaten, Virgin's account could win if you want to do your banking in one place.

See our App-based banking guide for more info on the best banking and savings apps.

How does it work?

The account is available to anyone aged 18 or over who lives in the UK. It can be opened and accessed via a new mobile app, online and over the phone. And, unusually for a digital account, it can also be managed in-branch – a big draw for those who want the option of visiting a branch should the need arise.

Virgin's app offers many of the features made popular by Monzo and Starling, including instant spending alerts, customisable budgets and savings 'pots'. It also comes with some modern comforts, such as fingerprint login and Apple Pay/Google Pay. However, it doesn't let you round up transactions to put change towards savings, nor does it offer an easy way to split the bill when you're out with friends. Monzo and Starling, having been around longer, come with all of the above.

The Virgin account also offers a relatively low 19.9% EAR arranged overdraft rate to everyone accepted for one – while that's higher than Starling's current 15% EAR, Starling recently announced that some customers will pay 25% or 35% EAR variable from 1 April 2020.

How good is it?

At first glance, Virgin's digital account looks like a jack of all trades – snazzy app, interest on savings, low overdraft rate and even branch service.

But Monzo and Starling's apps trump Virgin's for added features such as transaction round-ups and bill splitting, while some of the big banks pay more on credit balances and offer free cash for switching (for now at least). For more on this, see our Best Bank Accounts guide.

And unlike Monzo and Starling, Virgin charges a £4 fee for refusing a payment if you're out of funds. Meanwhile, the top easy-access savings accounts pay up to 1.45% AER variable, easily beating Virgin's 1%. Our Top Savings Accounts guide can help you max your returns.

While it may be master of none, some will find Virgin's offering to be more than the sum of its parts, particularly those who want to stick with a big name for their everyday banking. No single other bank beats it on all fronts, so you'd need more than one account if you want the best of all worlds.

However, there's one area where Virgin's new account really falls short – travel. Spending and cash withdrawals in euros are fee-free. For most other currencies, it charges a hefty 2.75% fee (min £1.50) on spending and an even worse 3.75% (min £1.50) on ATM withdrawals. Virgin says it will be making all overseas transactions fee-free ahead of the summer holidays in 2020. Regular travellers should consider looking elsewhere in the meantime. To do so, check out our Top Travel Cards guide.

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