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5 Year Fixed Rate Savings at 5.15% - Withdrawals Allowed @ AA Savings
5 Year Fixed Rate Savings at 5.15% - Withdrawals Allowed @ AA Savings

5 Year Fixed Rate Savings at 5.15% - Withdrawals Allowed @ AA Savings

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AA 5 Year Fixed Rate Savings Account - online setup, access postal thereafter.
Interest rate (AERs*) 5.15% AER* fixed for five years. Limited availability, it may be pulled anytime.
# Earn a return annually or a regular monthly interest option with a choice of savings terms.
# Invest from £500 up to £5 million in your savings account per investor.
Interest will be paid net of lower rate income tax (currently 20%) unless you register your account with us to receive gross interest (easily done)

Note that your money will be with Birmingham Midshires, a division of Bank of Scotland plc, and protected by UK Government compensation scheme if all goes t#ts up. Read MSE for more info on this.

This sort of interest rate is normally in the form of a bond at the moment, with no wiothdrawals allowed. However, this account is only subject to 'a 90-day loss of interest on the amount withdrawn'. So, even if you withdraw the lot after a year if rates elsewhere go up or you need the money, you are still getting the equivalent of around 3.7% - and beating so-called market leaders such as A&L at 3.15%.

I had some money earning paltry ionterest with Tesco (Tesco money is also with Bank of Scotland!), so set this up in the wife's name as she is a non-taxpayer. Paperwork arrived next day, cheque sent in. That's it.

31 Comments

This looks good, no, hot!:thumbsup:

Professional advice at the moment is not to tie yourself in for more than 2 years,

Just applied, good deal

Besford;6570771

Professional advice at the moment is not to tie yourself in for more than … Professional advice at the moment is not to tie yourself in for more than 2 years,



Any particular reason..?

Hmm, methinks that for them to offer long term tie-ins like that, the banks suspect rates will be ramping up to 7, 8, 9 percent within the 5 years...

However, nothing stopping you withdrawing the money to move to a 10% deal in two years time if it does!

Will4long;6570780

Any particular reason..?


Maybe because the interest rate will increase?!

ftse100;6570774

Just applied, good deal



It's highly likely that interest rates have to go up, as they're at historic lows.

I gave up with AA last year. I had money to invest from a previous investment, made my application to AA...waited...waited....heard nothing resulting in almost 2 months lost interest. I had to invest elsewhere as i heard nothing from them.
I later heard that they were unable to cope with the surge of investors.
Great interest rates aren`t all they appear to be. The question you have to ask is "will i get my money back when i need it" .
The Post Office is also one you may wish to avoid. I had money there, a bond, which matured. It took almost 3 weeks to get my money back upon maturity.
So, for the sake of a 0.50 here or a 0.30 there...it`s really just about putting your money where it`s safe and will be returned on the due date.

Will4long;6570780

Any particular reason..?


Because there is too much uncertainty about the economy at the moment to forecast beyond that and there is more chance of an increase rather than decrease over the period, which could leave you disadvantaged. We're also on the run up to an election which always adds to uncertainty so it's probably going to be another year or so before the picture becomes a little clearer.

OK if you can get out mid term but check the penalties first.

This is a good rate at the moment but it could be a better bet to take a slightly lower rate for a shorter term or one which gives you more flexibility to move.

Besford;6572740

Because there is too much uncertainty about the economy at the moment to … Because there is too much uncertainty about the economy at the moment to forecast beyond that and there is more chance of an increase rather than decrease over the period, which could leave you disadvantaged. We're also on the run up to an election which always adds to uncertainty so it's probably going to be another year or so before the picture becomes a little clearer. OK if you can get out mid term but check the penalties first.This is a good rate at the moment but it could be a better bet to take a slightly lower rate for a shorter term or one which gives you more flexibility to move.



This just in from MoneySavingExpert:
A small clause in a new fixed rate savings deal effectively lets you use it as a guaranteed 5.15% AER 90-day notice account, beating the next best by nearly 2%. But high demand could close it any minute. How it works: Sister banks Birmingham Midshires* & the AA both have 5-yr fixed rates, paying 5.15% (min £1). Normally fixes require you to lock the money away, yet these permit withdrawals, at the cost of 90 days' interest. How good is it? The massive rate means as long as you withdraw after 9 mths or more, it'd beat the current best buy instant access accounts. Top Easy Access: Citibank* pays 3.3% AER (min £1), with a year's 2.25% bonus. Safety info: All these have the full £50k per person UK safety guarantee, but B'ham Mid & the AA are both HBOS group companies, so you only get one £50k protection between them. FULL info & more best buys in the Updated Guide: Top Savings Related: Safe Savings, Top Cash ISAs (more info on the MSE site)

This is HOT !!!

I see the OP got the moneysavingexpert e-mail as well, just like everyone else.

It's highly likely that interest rates have to go up, as they're at … It's highly likely that interest rates have to go up, as they're at historic lows.



This is what people were saying in the thread regarding the 5% ISA from newcastle building society, in June. Yet still no ISA or savings account has bettered this rate so far (obviously this 5.15% beats it as a figure, but not after tax). I'm glad I didn't listen to any of those people, and got the balance of my ISA transferred, where it's safely earning a market leading 5%.

This is a good rate at the moment but it could be a better bet to take a … This is a good rate at the moment but it could be a better bet to take a slightly lower rate for a shorter term or one which gives you more flexibility to move.



And from moneysaving expert "The massive rate means as long as you withdraw after 9 mths or more, it'd beat the current best buy instant access accounts".

Its far better to hedge your bets with this account, then guarantee a lower return elsewhere. If interest rates are going to go to 6% within 9 months then great (for all us savers) and yes you'd lose out by having this account if this were the case, but I don't think we'll see a 6% instant access account within 9 months. But then I'm not an IFA so it all depends what you think.

Thanks, gone for the monthly interest option.

Referring to the clause from moneysavingexpert thread, can this account be opened with Birmingham Midshires too?

If so might be worth sending in apps for both to increase chance of getting an account in case they pull the plug.

alexs80;6570921

I gave up with AA last year. I had money to invest from a previous … I gave up with AA last year. I had money to invest from a previous investment, made my application to AA...waited...waited....heard nothing resulting in almost 2 months lost interest. I had to invest elsewhere as i heard nothing from them. I later heard that they were unable to cope with the surge of investors.Great interest rates aren`t all they appear to be. The question you have to ask is "will i get my money back when i need it" .The Post Office is also one you may wish to avoid. I had money there, a bond, which matured. It took almost 3 weeks to get my money back upon maturity. So, for the sake of a 0.50 here or a 0.30 there...it`s really just about putting your money where it`s safe and will be returned on the due date.



Same happened to me...very slow...gave up in the end.
Oh and they wanted the money via a cheque in the post...how very quaint!

I personally don't think this is worthwhile.
Savings rates will go up.They are starting to already.
If you withdraw after a year you'll end up getting 0.5% more than the current best instant access accounts.
In less than 1 years time those accounts wil probably be 0.5% higher or more.

It's a safe option, but rates are so low on savings now.

Good rate, what is the whole 90 day thing? Does it mean you loose the interest for 3 months of the amount withdrawn? Seems ok but can't be bothered with the hassle of changing, it's so much easier to have all my accounts with one bank. Mind you 5% compared to my isa of 0.5% maybe I'll be having a think about it. I used to get a few hundred quid every April when rates were at 5% now I'll be lucky to get £25!

That is HOT!

You may not have noticed but the base rate is 0.5% - this is 4.65% above base rate.

When the base rate starts to go up, that 4.65% will decrease not increase.

When the base rate was 5% a couple of years ago, the interest rate wasnt 9.65% was it??! No it was about 0.5% higher at 5.5%.

This is a very good deal IMO.

With base rates at 0.5%, it does not take a genius to work out that the likely next move in interest rates is going to be upwards !

Savings must be pretty thin on the ground if they are offering 5.15% and just where does that leave borrowers ? Obviously paying a huge margin over base, which the institutions now say is nothing to do with borrowing rates. Hope they remember that when base rates are 5% and they try flogging mortgages at 8% !!!

Good deal...

According to the Centre for Economics and Business Research - the UK interest rates will remain at their historic low of 0.5% until 2011 and would stay below 2% until 2014.

So is putting money into this account better than having it in my ISA which has an IR of 2.5%, which also allows withdrawals? Pardon my ignorance but finance was never my strong point!

EM xXx

HSBC 3.25% on 12 months, do not tie in for more than 1 year at the moment, common sense really !

This rate is the best available today, and doesn't have too much of a tie-in. It is the best you can get, and therefore it is definitely a good deal.

However, bear in mind that for each £1000 you put in you're only getting £51.50 back after a year. Hardly huge already, but then if you pay tax it's only £41.20 (standard rate) or £30.90 (higher rate). If you've got a mortgage and you aren't already overpaying by the maximum amount possible you'd be better off doing overpayments than saving at the moment IMHO.

Even if your mortgage is lower than 5.15%, the fact that anything you overpay now will never accrue interest for the rest of the mortgage's lifetime is a big catch. Interest rates may not go up over the next year, but if you've got 20 years left on your mortgage that's a lot of time for them to go up.

I know, I know, everyone's circumstances are different, and I'm not a financial advisor. Just being a voice of sanity though, I believe.

Or just spend the money on other hot deals :-)

No longer available!!!

wookiemummy;6574193

No longer available!!!



their website application is down

The 2 and 3 year fixes for a lower rate of interest still seem to work... it's just the 5 year fix at 5.15% that is no longer available

Looks like the issue may be full :cry:

HOT... no Brainer... no wonder it's all been snapped up so quickly.

Interest rates are looking likely to stay low for a good few years yet and even if they dont, this deal only has a 90 day lost interest penalty.

The same Bimingham Midshires deal ended first mid-morning closely followed by this one just after lunch.

I managed to get in there about half hour before the 5 year deal was pulled.

Dont know why expired as still shows as available?

The following message has been popping up since yesterday afternoon if you try to apply...

Product Unavailable
Unfortunately, the AA savings account you've selected is not available.


So it has sold out and is well an truly expired. (2 year option is still there but rate is nothing special)

I managed to get in early and apply. I received a letter from them over the weekend with instructions to send in my cheque to complete the application.

The letter did warn in bold letters that it is a limited issue and first come first serve... so I guess it was hugely popular!

My GF and I did a calculation that this was an amazing deal, as long as you kept your money in the account for more than 270 days, and that interest rates did not rise rapidly during that time. But yes, it is a hassle... but money is money eh?

Right, thought I would post a follow-up on this really old thread!

I'm now in the process of purchasing a property, and so am having to cash in this really good 5 year fixed rate savings account to help fund that purchase. Gave them a ring, and as usual, I'll need to write in to confirm that I want to close the account.

Interestingly, I realised that its not actually 90 days loss of interest. Its a penalty equivalent to 90 days of interest. The difference there is that I've already been paid the interest for the past 3 months to my current account, with the 20% tax withheld. I will then get my initial deposit, minus 90 days of interest. But I won't get a refund of the tax already paid.

Is this fair? I don't think so. But I see the logic. Somewhat. And I only had £5k, so I'm not going to squabble over a few pounds here and there. But something to ponder if you're thinking of withdrawing and have a larger amount!
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