The savings accounts arm of the AA has topped the best buy tables with their new instant access saver due to its 3.2 per cent interest rate.
The new Internet Extra 5 from AA savings is head-and-shoulders above its competitors, according to the savings tables. The closest competitors, personal and business bank account providers ING Direct and Santander, offer instant access savers with rates of return a full tenth of a percentage point less, at 3.1 per cent.
Moreover, the AA – which is a Lloyds Banking Group subsidiary is offering what can actually be considered genuinely ‘instant access,’ as it does exactly what it says on the tin. Customers can withdraw from their accounts without any sort of penalty, and savers can deposit as little as £1, or as much as £1 million, into the savings product.
However, there is a significant bonus built into the new saver’s rate, much like the lion’s share of best buys for instant access savers this year. The deal loses 2.7 percentage points at the end of its initial twelve month period, meaning that once this bonus rate expires, savers will need to switch to a more lucrative account to keep growing their savings pots.
Interest, which is paid yearly and calculated daily, is 2.56 per cent after the basic tax rate is taken into account, while those paying the taxman at the higher rate will net a 1.92 per cent return on their cash, and while this is still much less than the nation’s 5 per cent inflation rte, it’s still the best buy to be found outside of long-term savings options that leave you without access to your cash.