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