AA three-year fixed rate savings account paying 4.00%

AA Savings has launched a new fixed rate account that pays 4.00% gross/ AER for three years.

The minimum deposit in the AA 3-year Fixed Rate Savings Account is just £1; the maximum £5 million, making it accessible for those who have modest savings as well as those with substantial sums to save.

Mark Huggins, director of AA Financial Services says: "With the Bank of England's base rate remaining low, this account gives savers the peace of mind that their money will receive a guaranteed rate of interest over the three year term."

Interest is calculated daily and paid annually into the account or into an external account.  "Once you have opened the account - even with as little as £1 - you can make further deposits for as long as the issue remains open," Mr Huggins adds.

"The account cements the AA's reputation in the fixed-rate market," he says.

Although it is a postal account, customers can apply online.  Access to funds is also permitted subject to a charge equivalent to between 90 and 270 days interest on the amount withdrawn, you may therefore get back less than you originally deposited.

At the end of the term, the AA will offer options including withdrawal of the money or transfer into another account.  If customers don't take any of these options the money will be placed into a variable-rate easy access account so it can still easily be withdrawn.

AA 3-Year Fixed Rate Savings Account

Interest: 4.00% gross/AER
Available from 08 August 2012
Can be applied for online at theAA.com/Savings
Minimum deposit £1; maximum £5 million
Interest calculated daily and paid yearly on anniversary of first deposit
Additional deposits possible once account is opened as long as the issue remains available
Access permitted subject to a charge equivalent to between 90 and 270 days interest on the amount withdrawn, you may therefore get back less than you originally deposited

For more information, visit theaa.com/savings.