Spotlight On: AA's one-year fixed-rate bond

 

Simon Read
Saturday 19 November 2011 01:00 GMT
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The deal

AA Savings has increased the interest paid on its one-year fixed-rate savings account to 3.6 per cent.

The good points

There are two other outfits – KRBS and Yorkshire/Clydesdale – offering one-year bonds paying 3.6 per cent, but they both require a minimum deposit of at least £1,000 (£2,000 at Yorkshire). The AA will allow you to open a bond with only a pound.

The bad points

The account is operated by post (although you can open it online) and you must keep your money locked away for the whole 12 months.

Conclusion

Fixed rates can be attractive, unless interest rates generally move up and the rate you're stuck with ends up looking paltry. However, with no rate increases expected for months, the account could prove worthwhile.

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