The AA has introduced a two year, fixed rate bond offering a return of 3.8 per cent gross/ AER.
The account can be opened with £1 while the maximum permitted balance is £5 million and can be managed.
It is aimed at savers who want to lock their money away, as withdrawals will be charged at the equivalent of 90 to 180 days’ gross interest.
Mark Huggins, director of AA Financial Services said: “This new bond means that you will know exactly what rate of interest your money will earn. Interest is calculated daily and credited to the account annually.
“Although it will be attractive to those with a lump sum to deposit, it is also suitable for new savers who want to build their pot without the temptation of easy access.”
At the end of the term, the AA will offer options including withdrawal of the balance or transfer into another account, otherwise the money will be put into a variable rate easy access account.
While the bond can be applied for online, it can only be operated by post once open.
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