AA banking unveil online savings account

The AA has launched a new instant access internet savings account.

The AA Internet Savings Account will offer a no-notice rate of 5.31 per cent gross/AER for the first year, with a minimum deposit of £1.

The underlying variable savings rate is currently 4.71 per cent.

According to data from Moneyfacts, this rate makes the account the second highest earning online account, after Alliance & Leicester's Online Saver account.

"Despite the range of high interest-paying accounts now available, most people still look to high-street banks as their first choice for savings - yet in many cases, the interest they earn is so poor they actually lose money," said director of AA personal finance, Lloyd East.

According to AA research, two-thirds of savers say they would move their savings account if they thought they were getting a poor deal.

Mr East added: "The new AA Internet account will be very attractive to those who realise their present savings are being eroded and we believe it will particularly appeal to younger internet-savvy savers."

The account can be operated entirely online, with no signature or cheque needed for the first deposit in most cases. The new account allows customers to make and track all their transactions online.

The AA aims to have accounts fully operation within ten working days.

Interest is calculated on an annual basis.