AA unveils 3-year fixed rate savings account paying 4.0%

The AA has announced details of a new 3-year fixed rate savings account that pays interest of four per cent.

It has also reduced the minimum deposit to just £1 to increase its accessibility.

Savers can make further deposits through the whole period that the product remains open.

However, access to funds in the account is penalised. Investors who access their money will lose between 90 and 270 days interest on the amount withdrawn.

Interest is calculated daily and paid annually by the AA.  It is a postal account but customers can apply online.

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."