AA passes full base rate rise to savers

The AA has responded to the Bank of England’s surprise January base rate rise by passing on the full 0.25 per cent increase to savers on all of its instant access accounts, including existing customers, as from 1st February.

The new rates have increased by 0.25 per cent for:

AA Phone & Save bonus Account (2) to 5.60 per cent gross/AER
AA Internet Account (2) to 5.37 per cent gross/AER
All earlier account issues have also benefited from the rate rise.

“The latest increase was not expected and caught many commentators off guard. But we are committed to providing consistently well-performing savings accounts. For example, the Phone & Save telephone account already offers one of the best instant saver rates,” says Lloyd East, director of AA Savings.

This is the second account rise in two months – the AA was one of the first savings providers to announce that it was responding to the Bank of England’s previous increase, with effect from 1 December 2006.

AA telephone and internet accounts can be opened with a minimum of £1 and there is no limit to the number of deposits and withdrawals that can be made. Interest is calculated daily and paid annually.