Virgin Money has launched a new Virgin Atlantic one-year savings account where you earn airmiles instead of interest on your deposited savings. The equivalent rate of interest on the Virgin Atlantic savings account is 2.1%, which is just slightly higher than the market-leading 2.05% one-year fixed rate savings account from Atom.

For every £1,000 that you deposit into the Virgin Atlantic one-year Flying Club savings account, you’ll earn 1,400 airmiles upon maturity of the account (in 12 months). Virgin Money says the account has a gross interest rate of 1.19% AER – but the interest is always paid in airmiles. There is no option to have the interest paid out in cash.

To buy the same number of airmiles directly from Virgin Atlantic, you would need to find another savings account that pays 2.1% interest – which is pretty hard to do, unless you’re willing to lock your money away for two or more years.

The Virgin Atlantic savings account can only be opened online, and you must be a UK citizen aged 16 or over. The minimum deposit is £1 and the maximum is £1 million, and you can transfer money into the savings account via the usual means – cheque, electronic transfer, or from a Virgin Money bank account.

Earning airmiles from your savings is certainly a novelty – and more importantly, the earn rate is pretty good. If you can put away £15,000 for a year, you’ll earn 21,000 miles – enough for an off-peak return economy flight to New York. If Virgin Money keeps the account around, you can then put the money back in next year and earn another ticket.

Now read about how to choose a savings account

If you prefer to earn your airmiles by spending, the new Virgin Atlantic Reward+ credit card is your best bet. There’s an annual fee of £160, but you get 15,000 bonus miles and earn 1.5 miles per £1 spent – so you’d earn 37,500 miles if you spent £15,000 in your first year. The caveat of that method, of course, is that you’ve spent £15,000 rather than saved it.

Last month, MBNA started shutting down its Virgin Atlantic Visa and Amex credit cards. The Amex card cost £140 per year and earned you 2 miles for every £1 spent. With the interchange fee capped at 0.3% in the EU, it is seemingly untenable for credit card providers to offer higher airmile earning rates.

If you’re looking for a new airmile credit card, the only real options are the new Virgin Atlantic Reward card and the British Airways Premium Plus card. You might also consider a reward credit card, or even a packaged current account.