AA instant-access account offers 3.2% interest
The AA has launched an online, instant-access account paying 3.2 per cent interest before tax, which is currently the highest rate available for people who need immediate access to their money.
The account will offer some protection from the rising cost of living, without having to worry about tying up savings for a long period.
Issue 5 of the AA’s Internet Extra account includes an introductory bonus of 2.7 per cent, so after the first year the account could offer a return of just 0.5 per cent.
A balance of between just £1 and £1 million can be held in the account which must be linked with an account which accepts direct debits so that money can be transferred.
However the AA is part of the Lloyds Banking Group which also includes Lloyds TSB, Halifax and BM Savings, so savers should ensure that their total savings with the group do not exceed £85,000, or £170,000 for joint accounts.
The Internet Extra account is not available to joint account holders and cannot be operated by Power of Attorney.
For savers who don’t mind tying their money up for five years, the Bank of Ireland UK is offering a tax-free cash ISA which offers 4.5 per cent interest.
The Governor Money Bank of Ireland 5 Year Fixed Rate ISA is only available through the Bank of Ireland UK’s Governor Money service.
The ISA is subject to an Early Closure Charge equivalent to 270 days interest at 4.5% plus a £15 (ex VAT) admin charge.
It is only available until 27 Dec 2011 and between £100 and £50,000 can be invested.
The Governor Money service is a savings platform which allows several savings accounts to be managed in one place.
It is designed to make it easy for savers to switch to another provider when their savings mature.