The AA has entered the savings market for the first time with a phone savings account offering a no-notice rate of 5.11 per cent gross.
The AA already operates as an independent home, car and travel insurance broker, provides general loans and car loans and offers a Visa credit card.
Personal finance director Lloyd East says the savings market is dominated by the big four high-street banks which have traditionally been the first choice for savings and loans.
AA research indicates that two-thirds of custom-ers would move if they thought they were getting a poor deal.
The AA claims that 85 per cent of savers are losing out because they stay with their high-street company offering accounts with poor rates.
East says that just to keep pace with the retail price index, a basic-rate taxpayer must earn at least 2.88 per cent to maintain the value of their cash and many accounts provide well below that figure.
The AA phone savings account features a full 12-month introductory bonus which is included in the 5.11 per cent rate with an underlying rate of 4.41 per cent. The account can be opened in sole or joint names. Minimum investment is £500. Interest is calculated daily and paid annually.
East says: “A savings acc-ount is the obvious step in broadening the services we offer. The AA is a trusted financial services brand and this new account is designed to offer top value.”