A nationwide building society’s £2.9bn takeover of Virgin Money is making headlines as thousands of the society’s customers protest that they will not get a vote on whether it should go ahead.
Nationwide, owned by the society’s 16 million customers, plans to buy Virgin Money to create Britain’s second-largest savings and loan group.
But some customers fear they’ll get a deal on rum and that the money could be better spent on their current members.
The Give Nationwide Members A Say petition has nearly 4,000 signatories. A Nationwide poll over the weekend found 8 per cent opposed the takeover, 48 per cent were neutral and 44 per cent were in favour.
However, I think the purchase, which could be done and dusted later this year, could mean better rates for Nationwide savers. And not before time: they have endured mediocre offers for years.
Acquisition: Nationwide, owned by its 16 million customers, plans to buy Virgin Money to create Britain’s second largest savings and loan group.
Nationwide says profits from Virgin Money will feed the Nationwide Group and improve its financial strength. It says there are “compelling” financial benefits that will mean better savings rates compared to the market average.
Hopefully. The average easy access account pays 3.11 per cent according to rate examiners Moneyfactscompare.
But Nationwide pays 2.35 per cent at best, and that’s just for those with £50,000 or more in their Instant Access Saver. For balances of £1 more, it’s an even worse 2.25 per cent, which rises to 2.3 per cent once your balance reaches £10,000.
On your one-year fixed rate bond you pay 4.25 per cent and you pay 4.5 per cent on your cash equivalent Isa. This is also below the average, which is 4.6 percent and 4.51 percent respectively.
Virgin Money, on the other hand, has offered consistently good rates since bursting onto the savings scene. Their fixed rate bonds and Isas tend to be among the highest paying.
It pays 4.65 per cent for its one-year fixed rate bonus and 4.76 per cent for its ordinary Easy Access Cash Isa, but the latter is only offered to customers who have a Virgin Money current account.
Virgin Money’s easy-access, variable-rate account, which restricts the number of withdrawals you make each year, beats Nationwide’s.
With Virgin’s Defined Access E-Saver, you get an overall rate of 4.51 percent. If you make more than three withdrawals in a year, the rate drops to 2 percent.
At Nationwide, the one-year Triple Access Online Saver pays much less: 4.25 per cent. Once you have made more than three withdrawals, the rate drops to 2.15 percent.
Nationwide’s high rate lasts just one year, after which you move to an instant access savings account that pays 2.35 per cent at best.
The pair offer Isa versions of these accounts, with Virgin Money at 4.51 per cent and Nationwide’s one-year Triple Access Online ISA at 4.25 per cent.
Let’s hope that when they merge, Virgin Money learns from Nationwide about how to treat loyal customers.
Virgin Money savers with old accounts that are no longer on sale receive as little as 0.25 per cent interest. Nationwide pays the same on its closed easy access accounts as it does on its current Instant Access Saver.
sy.morris@dailymail.co.uk