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Earn Virgin miles with the Virgin Atlantic 1-year Flying Club Savings Account – now with a better rate and more miles

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Virgin Money has launched a new Virgin Atlantic 1-year Flying Club Savings Account and sharply increased the miles you can earn.

The partnership between Virgin Atlantic and Virgin Money is now really moving forward.  We have covered the two new Virgin Atlantic credit cards in depth as they are exceptionally good – read our overview here.  The life insurance deal is decent but isn’t going to move the needle for frequent flyers with a bonus of just 5,000 Flying Club miles at present.

We are intrigued by this offer, however – earning miles with a savings account.

Yes, a few months ago Virgin Money launched the Virgin Atlantic 1-year Flying Club Savings Account.  Full details are on the Virgin Money website here.

Virgin Money has just refreshed the offer with a far better underlying interest rate.

How the Flying Club Savings Account works

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.

Virgin Atlantic 1 Year Flying Club Savings Account review

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

When the deal launched in June it was only paying 1,400 miles per £1,000 you saved, based on an interest rate of 1.19%.  The jump to 1.36% is therefore significant.

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!

As always with these offers, if you know that you will generate more than 0.85p per mile when you redeem (which isn’t difficult) this could be worthwhile.

Virgin Atlantic 1-Year Flying Club Savings Account review

Are you really paying 0.85p per mile?

The 0.85p per mile valuation only holds if this account is ‘top of the market’.

Looking at Moneyfacts, the top 1 year bonds currently on the market from what I consider ‘blue chip’ institutions (although this depends on your personal definition of ‘blue chip’) are 1.3% – 1.4%.  On this basis, the Virgin Money account – at 1.36% – is good.  You can get higher rates from lesser known financial institutions.

But remember ….. 

There are two potential risks to also bear in mind:

You won’t receive your miles for a year so you need to keep in mind the risk of any potential Flying Club devaluation – there isn’t an option to stop the conversion of your interest into miles at the end of the year

We don’t know how attractive, or not, the pricing will be when Air France and KLM redemptions are added to Virgin Flying Club early next year.  For many people this will be a key driver of whether they want to run up a larger Flying Club balance.  If you are happy redeeming on the existing Virgin Atlantic and Delta networks, however, this is not something to worry about.

Virgin Money has now put a bit of life behind this product and it might start getting some traction.  I will be genuinely interested to see how it goes.  You can find out more on the Virgin Money website here.

How to earn Virgin Atlantic miles from UK credit cards

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

Click here to read our detailed summary of all UK credit cards which earn Virgin Flying Club miles.  That page is regularly updated with the latest special offers and will still be accurate even if you are reading this article months after publication.

(Want to earn more Virgin Flying Club miles?  Click here to see our recent articles on Virgin Atlantic and Flying Club and click here for our home page with the latest news on earning and spending other airline and hotel points.)

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Comments

  1. Or 1.5% from Marcus by Goldman Sachs, one of the lesser known financial institutions 🙂

    • And this is easy access. So it’s no contest. Virgins “jump” in rate has to be seen in context of what else is out there. It remains a poor option.

  2. William Kerr says:

    Better to use a Portfolio Management Savings account with, for instance, Hargreaves Lansdown if you want interesting returns – currently 6.5 % gross on discretionally managed funds , however this is not a standard savings account and requires larger investments…

    • Vanguard LS100 is up 12% over last year, so 6.5% is nothing special when equities have been constantly rising

      • Shoestring says:

        My wife & I are up 115% since April on our Orbis ISAs.

        • Good for you, but doubling £100 is different from getting a decent return on £10k or £100k.

        • Shoestring says:

          haha! gotcha/ me

          Still no sign Orbis will run it again this year so any people (ie small players) waiting for a repeat might as well get the Virgin ISA points bonus if they haven’t already. You can still get in 6 months before end of 2018/19 fiscal.

          Choices, choices. Seems better for us to put £40K in a pension as age profile helps, accessibility @55 YO etc. Bit worried about what that idiot Hammond will do on pensions.

        • You can double £100k on a condo in Bangkok by the time they have completed construction, but the sweet spot is around £60k 🙂

      • But neither are comparable to a deposit account in terms of risk, so irrelevant here I would suggest.

        • Shoestring says:

          I would humbly suggest that doubling your money on day 1 with Orbis helps mitigate any risk of negative market movement.

          Then stick it in their low risk fund. Or go to cash.

  3. I still only see real value in this for those who are working towards a redemption goal about a year out and know that they will likely be short of a modest amount of miles that they forsee difficulty in obtaining elsewhere. Personally I think it would be crazy to invest large sums in this despite the increased rate, a year can be a long time in in both the savings or frequent flyer industry so this could look like a very different opportunity by the time the bond matures.

  4. The new Marcus account is paying 1.5% for the first year. You can add to it or withdraw any time.

  5. Memesweeper says:

    The big risk, as you point out, is a significant Virgin points devaluation. Other than that I think this is a great deal for those that need some more points and are happy to tie up their money for a year. It’s a shame you can’t make further deposits – I’d open one as a ’holiday fund’.

  6. As you have to pay income tax on the interest even though it is taken to buy point this needs to be factored into any valuation.

  7. Shoestring says:

    Ooh heck! Erdogan is going to spill the whole beans on the Khashoggi murder in the Saudi Embassy, scheduled for 09.45 UK.

    That’s going to crash the markets.

  8. What’s the plan for the VS miles Rob? Necker?

  9. It’s going to be interesting when all the Clydesdale and Yorkshire Bank branches are rembranded to “Virgin Money”.

    A lot of light-hearted chat about the rebranding of the Clydesdale notes. Mr Branson’s beard and whispy hair are perfect for a banknote image.

    My money’ is on “Virgin Balloon over Scottish Landmarks” as the first series of notes.

    • RussellH says:

      If they have any sense at all we shall see a re-run of what happened in Northern Ireland following the merger of Provincial Bank of Ireland, the Royal Bank of Ireland, and the Munster & Leinster Bank into Allied Irish Banks in 1966. For at least 13 years their NI banklnotes were still being issued under the Provincial Bank of Ireland name.
      Equally, the Clydesdale’s long-time Northern Irish partner Northern Bank was bought by Danske Bank in 2004, but the banknotes only adopted the Danske Bank name 9 years later.
      Re-branding Clydesdale and Yorkshire as Virgin Money seems barmy to me – does the ‘Virgin’ name really have so much more clout??

      • Is that rhetorical? Yes it does.

        • RussellH says:

          No, it was not rhetorical. I find the Virgin name generally off-putting. Fine for pop music, but not for anything serious, such as banking.
          (Same applies to names like Monzo, Curve, Starling etc. It is probably an age thing.)
          “Virgin Money” to me sounds like a firm that does not really know what it is doing. Rebranding ‘real bank names’ therefore seems to me that they are proud of their image, which to me is a negative one.
          Do you knopw of any independent research into why the ‘Virgin’ name has, generally, a positive image?

        • At least people have heard of Virgin! I held a “B” account (a sub-brand of Yorkshire & Clydesdale) for a while and got a lot of raised eyebrows whenever anyone paid me…

        • Mr(s) Entitled says:

          I had a Yorkshire Private Account and just left them to move to Virgin Money. Customer Service of Yorkshire was good, Virgin exceptional. If Clydesdale can marry their banking prowess (?) with Virgin’s customer service it could really shake up the market. Yes, the big banks are massive so shaking the market is relative, but look at Metro.

          • Metro is very good. Moved HFP to them 2 years ago (and they are now opening next door to us on London Wall in the old New Look). Not paid a penny in fees, ever.

        • Does it need independent research? It’s basic common sense – they have a huge international presence and are generally known for giving good service (emphasis on the generally – doesn’t always happen of course). They also have a reputation for being a bit “cooler” than other brands.

          And of course, everyone in the country knows Virgin. I’d wager the majority wouldn’t be overly familiar with Clydesdale bank or Yorkshire BS. I’m sure those are better brands than Virgin in Scotland and Yorkshire, but this is meant to be a large national bank remember.

        • Shoestring says:

          Virgin = honest, young & cool (as far as the 45+ demographic is concerned).

          So a good starting point for financial services.

          I have a small pension with them (check out the tax advantages of having up to 3 small pension pots under £10K – you can access them tax-free when you’re 55) and when I took it out, I was confident all would be fine & I have to say after 4 years, their service has been excellent – and fund performance has been better than expected.

  10. Froggee says:

    Hi Rob – this is pretty interesting to me. As a fellow family-of-four man it would be really helpful to hear your thoughts on Virgin miles and what your plan is for these 1.5m Virgin miles you hold!? By all accounts Virgin miles are difficult to spend so I’d rather not be stuck with them although I guess they could be transferred out to e.g. Hilton but that then makes the interest rate look less exciting.

    • I’ve never had a problem spending my VS miles

      perhaps if you gave some examples of how you found them ‘difficult’ to spend you might get some advice on making it easier

    • ThinkSquare says:

      “By all accounts”? Then you haven’t seen my account. My experience last year was more-or-less “pick a flight, any flight”. Far easier than spending BA miles.

      • Froggee says:

        Thanks both! I don’t even have a VS account currently as have focused primarily on Avios with a side order of SQ for intra-regional Asia flights. Historically most of my miles spend has generally been to get my parents to S.E. Asia and the US in business class. They wouldn’t let me buy them cash tickets as “it is too much money” but are always delighted to accept miles as – to them – they are free. So there is an element of lying to my parents there but I digress.

        I’d been looking at redemptions in SQ to Asia as the most attractive option hence my comment on lack of availability. Having survived the last five years of nappies etc we are now getting to the point where I’ll also be looking to travel with my wife and two wee boys (to SIN/SFO). VS looks near impossible for four premium seats for this but no matter.

        We’re up in Edinburgh which makes VS flights tricky and I don’t fly them for work. So I’ve never bothered with credit cards etc as it seemed like it would be a real slog to get enough points. However this could enable me to get a bucketload of VS miles. I’ve done some more searching since I asked the question, prompted by your comments and Delta to JFK and onwards looks like a very viable redemption option so I’m now likely going to tie up quite a lot of cash with Virgin Money. Here’s hoping they don’t go bust/devalue etc in the next year.

        • Charlie says:

          The Air France deal sounds like it may work for you, as flying out of Edinburgh.

          I find Virgin miles quite easy to earn in the UK, and to keep my options open I collect both Virgin and Avios. I use the Avios for my family, and the Virgin miles for the in-laws!

        • If looking to fly SQ then I’d go for accruing plenty of Amex MR points and transferring them to SQ KrisFlyer rather than trying to make partner booking with VS miles – availability is far worse that way.

      • My current cash-out plan is to wait for the KLM / Air France availability to be loaded.

        • RedRooibos says:

          Rob, not sure if you know more than me – but will VS redemptions intially only be avaliable on TATL JV Flights or avaliable worldwide?

        • Shoestring says:

          Blimmin’ hope note. I’m assuming they will just slot into the existing KLM/ AF loyalty scheme, so Europe will be included

  11. William Kerr says:

    my mistake from earlier post – Hargreaves achieving 6.5 % capital growth in 6 months – equating to 13% p.a.

    • Charlie says:

      That is nice but unless it is guaranteed it is not relevant.

    • OK but firstly is that before or after fees?

      13% is still following the overall market trend, if I had cashed out my funds in September and then repurchased now I would have seen a 15% gain over 6 months.

      • Shoestring says:

        I cashed out our ISAs and am sitting on 15% over 6 months.

        Plus the other 100% of course.

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