The last few months have seen savings rates slide across the full range of product areas, so whether you’re looking for an instant access account, a cash ISA or fixed rate bond, rates are in many cases around 0.25% or more lower than they were in early summer.
With experts predicting that base rate won’t be increasing anytime soon and the government’s ‘Funding for Lending’ scheme offering some banks an alternative source of cheap funding, the outlook for savers looks pretty gloomy.
One of the few bright spots in the market in recent weeks is the new best buy 3 year Postal Fixed Rate Savings Accounts from AA Savings.
The rate is 4.00% AER with interest paid on an annual basis. The bond can be opened online or by phone and once it’s up and running is operated by post only.
Unlike many fixed rate savings bonds, you can access your funds, and although this additional flexibility is welcome, I would only recommend this course of action in an absolute emergency as the interest penalties are quite severe.
With most rates tailing off or at best remaining static , this looks like another excellent deal from the AA and well worth some serious consideration.
My verdict – HIT