AA Fixed Rate Bonds

If you have some money put aside you can afford to tie up for awhile to see it grow you may be wondering what the AA can offer you. The AA Fixed Rate bond options are not the same as they were previously. Instead now they offer some fixed rate products under their ISA plan.

Latest Fixed Rate Bond Deals
ProviderAccountInterest Rate (AER)TermApply
2.35%4 YearsApply Now >
Earn 2.35% gross/AER fixed for 4 years. Save £1,000 - £250,000. No withdrawals during the term. Individual or joint accounts available. Annual or monthly interest.
2.20%3 YearsApply Now >
Earn 2.20% gross/AER fixed for 3 years. Save £1,000 - £250,000. No withdrawals during the term. Individual or joint accounts available
1.50%3 YearsApply Now >
Interest paid annually at 1.50% (gross), quarterly at 1.49% (gross), or monthly at 1.49% (gross). Minimum Deposit £10,000.
1.40%3 yearsApply Now >
3 year fixed rate savings account paying 1.40% Gross (1.38% AER)
1.00%2 yearsApply Now >
2 year fixed rate savings account paying 1.00% Gross (1.00% AER)
0.75%1 yearApply Now >
1 year fixed rate savings account paying 0.75% gross/AER.
Short Term Fixed Rate Bonds (0-2 years)
ProviderAccountInterest Rate (AER)TermApply
1.00%2 yearsApply Now >
  • Earn 1.00% Gross (1.00% AER) fixed for 2 years
  • Deposits are 100% guaranteed by Santander UK plc
  • Interest can be paid gross - subject to eligibility
  • Covered by the FSCS (Financial Services Compensation Scheme)
  • No withdrawals allowed during the term
  • Minimum deposit of £50,000
  • Arrangement fee of £250
0.75%1 yearApply Now >
  • Earn 0.75% gross/AER fixed for 1 year
  • Deposits are 100% guaranteed by Santander UK plc
  • Interest can be paid gross - subject to eligibility
  • Covered by the FSCS (Financial Services Compensation Scheme)
  • No withdrawals allowed during the term
  • Minimum deposit of £50,000
  • Arrangement fee of £250


Alternatives to Fixed Rate Bonds
ProviderPlanDeposit TakerPotential ReturnTermMore Info
Kick Out Deposit PlanInvestec Bank plc

4.25%

per annum

Up to
6 years
More Info >
  • 4.25% for each year if the FTSE 100 finishes higher than its starting value
  • Opportunity to mature early at year 3, 4 or 5
  • Capital protected
  • Short/medium term alternative to fixed rates
  • Also available for Cash ISAs & ISA transfers
  • Covered by the FSCS (Financial Services Compensation Scheme)
  • Limited offer - deadlines apply. May close early if oversubscribed
  • Plan designed to be held for full term
  • Arrangement fee applies
  • Returns not guaranteed. You may only receive a return of your original capital 
Target Income Deposit PlanInvestec Bank plc

4.1%

per annum

6 yearsMore Info >
  • Potential annual income of 4.1%
  • Income paid if the FTSE 100 finishes above 95% of its starting value
  • Missed payments added to future payment next time anniversary level above 95%
  • Capital protected
  • Medium/long term alternative to fixed rates
  • Also available for Cash ISA & ISA transfers
  • Covered by the FSCS (Financial Services Compensation Scheme)
  • Limited offer - deadlines apply. May close early if oversubscribed
  • Plan designed to be held for full term
  • Arrangement fee applies
  • Returns not guaranteed. You may only receive a return of your original capital

These are structured deposit plans and are capital protected. There is a risk that the company backing the plans or any company associated with the plans may be unable to repay your initial investment and any returns stated. In this event you may be entitled to compensation from the Financial Services Compensation Scheme (FSCS) , depending on your individual circumstances. In addition, you may not get back the full amount of your initial investment if the plans are not held for the full term.

If you are at all unsure of the suitability of these types of investments, both in respect of their objectives and risk profiles, you should seek independent financial advice.

The AA currently offers two fixed rate products, for one and two years, under their AA ISA plan


AA ISA Fixed rate product key facts:


  • Open with a deposit or transfer in of at least £500
  • No upwards limit
  • Interest calculated daily and paid yearly
  • At the end of the fixed term your money is transferred to a holding account where it will retain its tax free status until you decide what to do with it.
  • No additional deposits or withdrawals can be made during the fixed term
  • Use your 2015/16 ISA allowance – up to £15,240 minus any contributions you may have already made to a stocks and shares ISA this tax year
  • If you need to close the plan early there will be a breakage charge

If you are looking for a plan which requires you to lock away your money for a set time period you most likely want to make sure you’re getting the best deal you can.


You can look below at some of the latest fixed rate bonds available from various providers to give you an idea of what some of your different options are.


Although fixed rate bonds have the advantage of letting you know exactly how much interest you are going to be earning over the period of the plan. However if while you are locked into a bond interest rates rise, your plan may no longer be competitive, For this reason you may want to also consider a tracker plan. With this plan type interest rates set by the bank of England raise, so too will the interest rate you receive on the bond. On the other hand it may also fall if the base rate does.


Alternatively you may wish to consider a structured deposit plan. These can have higher interest rates than savings bonds. However this comes at a risk as your return is not guaranteed, it is dependent on the performance of a particular index like the FTSE 100. If it does not perform in a certain way you may not receive any interest payments therefore. However the return of your original sum is not at risk and is guaranteed.


If you would like to have your money more easily available in case you need you might want to consider an instant access savings account. The AA offers an easy access saving option under its ISA plan that can be opened with £100 which offers unlimited free withdrawals. However it is important to remember that many providers offer instant access options and the AA is just option of many, for this reason it is wise to shop around before picking a plan.