ISA savings

2 Year Fixed Rate ISA

Make the most of your tax free allowance

About 2 Year Fixed Rate ISA

To open an AA 2 Year Fixed Rate ISA you must be 16 or over.

  • The account pays a fixed interest rate so you will always know how much interest you will earn.
  • You can open your account with as little as £1 and deposit a maximum of £15,000 in the tax year 2014/2015.
  • Withdrawals are allowed by post subject to a charge. The charge will depend on the length of term remaining at the time of access and is the equivalent of a number of days tax free interest on the amount withdrawn. The charge will be taken from the account balance and depending on when the withdrawal is made, may result in you getting back less than you originally deposited. See account summary for specific withdrawal arrangements.
  • Your deposit must be the full amount you would like to save, as further deposits are not permitted.
  • With our Fixed Rate ISA savings accounts you'll receive yearly interest paid on the anniversary of your deposit. Interest can be paid back into the account, to another AA Savings account or to another UK bank or building society account that accepts faster payments.
  • Transfers from other cash ISAs and/or stocks and shares ISAs are allowed.
  • Tax treatment depends on your individual circumstances and may change.

Rates correct at 19 December 2014

Apply for an AA 2 Year Fixed Rate ISA

Apply now

AER stands for annual equivalent rate, and illustrates what the interest rate would be if interest was paid and compounded once each year.

Tax free is the contractual rate of interest payable where interest is exempt from income tax.

The deposit taker for AA Savings accounts is Birmingham Midshires, a division of Bank of Scotland plc, which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under registration number 169628. Registered office: The Mound, Edinburgh, EH1 1YZ. Registered in Scotland No. SC327000.

Find out more about current and previous Bank of England interest rates.

Things you need to know

  • You can save in an AA 2 Year Fixed Rate ISA provided you're 16 or over and resident in the UK for tax purposes.
  • Key features – please ensure you read the summary box, account conditions, and the questions sections for full details of the AA 2 Year Fixed Rate ISA. This information can be found in the product brochure.
  • Current ISA regulations allow you to invest up to £15,000 and you have the option to save in either a cash ISA, or a stocks and shares ISA or a combination of the two as long as you don't pay in more than £15,000 in total during the tax year 2014/2015.
  • Remember, tax treatment depends on your individual circumstances and may change.
  • You cannot pay into more than one cash ISA in the same tax year, or apply for an ISA in joint names.
  • If you close your AA 2 Year Fixed Rate ISA within 14 days, you can still open another cash ISA within the same tax year.
  • Money paid by cheque or transferred from an existing account will earn interest the day the money is credited to your account. Interest can be paid to your ISA, to another AA Savings account you hold with us, or paid to another UK bank or building society. Interest payments to non AA Savings accounts will reach that other account by the end of the next bank working day.

AER stands for annual equivalent rate, and illustrates what the interest rate would be if interest was paid and compounded once each year.

Tax free is the contractual rate of interest payable where interest is exempt from income tax.

Account summary

Account name AA 2 Year Fixed Rate ISA
Interest rates (tax free/AER) 2 Year Fixed rate of 1.75% tax free/AER for balances of £1+
Tax status Interest will be paid tax free. Tax treatment depends on your individual circumstances and may change.
Withdrawal arrangements Access permitted subject to loss of interest depending on the remaining term of the product:

Length of remaining term at the time of withdrawal 1 year or less Up to 2 years
Withdrawal charge on the amount taken out of your Account - equivalent in days tax free interest 90 days 180 days
Access Postal

AER stands for annual equivalent rate, and illustrates what the interest rate would be if interest was paid and compounded once each year.

Tax free is the contractual rate of interest payable where interest is exempt from income tax.

Terms and conditions

AA Fixed Rate ISA Account Conditions

Our agreement with you is made up of general conditions contained in the AA General Savings Conditions (General Conditions) and the AA Fixed Rate ISA (Account) Conditions below. If there is any overlap or conflict between the Account Conditions and the General Conditions, the Account Conditions apply. In these conditions "we", "our" and "us" mean Birmingham Midshires, a division of Bank of Scotland plc, which is registered as an ISA manager at HM Revenue & Customs (HMRC)

The Account is a cash ISA and it has a fixed interest rate. We treat it as not being a payment account, as you can only pay in the yearly ISA allowance set by HMRC and there are restrictions on withdrawal during the fixed interest rate period. We explain what a payment account is in condition 1 of the General Conditions. You will see from condition 18 of the General Conditions that we may treat payment and non payment accounts differently if we make any changes to your conditions or interest rate.

1 ELIGIBILITY

1.1 To have an Account, you must be at least 16 years old, and resident in the UK for tax purposes or a Crown employee serving overseas (or be married to or in a civil partnership with a Crown employee serving overseas). You must inform us if these conditions no longer apply to you.

1.2 The Account must be in your sole name and all funds deposited in it must belong to you.

1.3 You may not pay into more than one cash ISA in any one tax year.

1.4 HM Treasury ISA Regulations mean that if you do not make a deposit into a cash ISA in any tax year (other than the year of application) you will need to complete a new application form if you want to make deposits in a later year, subject to Condition 1.5 below.

1.5 The Account is a limited issue, and we can stop selling it at any time. Once you have opened your Account you will be able to add to it, subject to your yearly ISA allowance, until we stop selling it.

2 OPENING AND RUNNING YOUR ACCOUNT

2.1 Your Account will start from the date of your first deposit, which must be at least £1, and be accompanied by a valid application form. Applications cannot be backdated.

2.2 The administration of your Account will be carried out by Birmingham Midshires. Queries about your Account can be made through our AA Savings Team on 0845 603 6302. The lines are open Monday to Saturday 8am to 8pm. Alternatively, for more information, visit our website at theAA.com/savings.

2.3 You can only operate your Account by post.

3 DEPOSITS AND WITHDRAWALS

3.1 You can pay all or part of your yearly ISA allowance into your Account until we stop selling it. You can do this by:
a) transfer from a cash ISA with another ISA manager which you have subscribed to in the same tax year (in which case you must complete a ISA Transfer Authority Form as part of your application); or
b) transfer from a stocks and shares ISA with another ISA manager which you have subscribed to in the same tax year (in which case you must complete an ISA Transfer Authority Form as part of your application); or
c) sending a cheque to, AA Savings Team, PO Box 81, Pendeford Business Park, Wobaston Road, Wolverhampton, WV9 5HZ; or
d) transferring money from other accounts you hold with us. Call us on 0845 603 6302 if you'd like to discuss this further.

3.2 You can also transfer any cash ISA or stocks and shares ISA account with us or another ISA manager, which you have subscribed to in previous tax years, into your Account until we stop selling it (in which case you must complete an ISA Transfer Authority Form as part of your application).

3.3 The maximum amount you can pay into a cash ISA in any tax year is set by HM Treasury. To find out the latest allowance contact us or HMRC.

3.4 You can make a payment or withdrawal or transfer out to another ISA from your Account at any time. If you do so, we will charge you an early access charge - see condition 3.5 for full information. The funds in the Account, together with any interest earned and less the early access charge, will be paid to you. After making a payment or withdrawal you will not be able to pay more money into your Account, if it means you pay in more than the yearly ISA allowance set by HM Treasury, or if we have stopped selling this limited issue product.

3.5 Early access charges. The amount of the early access charge will depend on the remaining term of the Account and will be equivalent to the number of days' tax free interest as detailed in the table below. Any withdrawal charge will be taken from the account balance and could mean that you get back less money than you deposited.

Length of remaining term at the time of withdrawal 1 year
or less
Up to
2 years
Up to
3 years
Up to
4 years
Up to
5 years
Withdrawal charge on the amount taken out of your Account – equivalent in days tax free interest90 days180 days270 days320 days365 days

3.6 The rate used to calculate any withdrawal charge, will be the interest rate at the time the withdrawal is made.

3.7 You can ask to transfer all subscriptions made to your Account during the current tax year, and / or the whole or part of your Cash ISA deposits (and interest) from a previous tax year or years, to a Cash ISA or a Stocks and Shares ISA with another ISA provider, in which case you must complete a transfer application with your new provider who will send the transfer application to us. Within 5 bank working days of receiving the transfer application from your new provider, we will send your money and information to your new provider.

4 INTEREST

4.1 The Account pays a fixed interest rate for a fixed term depending on the balance in the account. You can find out the current interest rates for your account by telephoning us on 0845 603 6302.

4.2 Interest is calculated daily.

4.3 If you do make a withdrawal, this may affect the interest rate on your new Account balance.

4.4 If you have chosen to receive yearly interest paid back to your Account (see condition 4.5 below), this may affect the interest rate on your new Account balance.

4.5 If you have chosen to receive interest yearly , this will be paid 12 months after the date we credit your Account with your opening deposit, or if that is not a bank working day, the first bank working day after that. Yearly interest can be paid into your Account, to another AA Savings account or to another bank or building society account – you will make this choice when you open your Account. Interest payments to non AA accounts will reach the other account on the next bank working day.

4.6 As long as you and your Account continue to qualify, interest will be paid tax-free.

4.7 As explained in conditions 3.4 and 3.5 you will pay an early access charge on any payments/transfers out or withdrawals during the fixed rate period.

4.8 Where the term of the Account is for 12 months or less, yearly interest must be paid back into the Account.

5 CHANGES TO THE ISA REGULATIONS

5.1 Any changes made by HM Treasury to ISA Regulations that affect these conditions will apply as soon as they come into force.

5.2 Favourable tax treatment for ISAs may not be maintained (the Government is responsible for decisions about tax treatment).

6 OTHER TERMS

6.1 We are required to provide details of all ISA holders to HMRC. If you are or become non-resident in the UK, HMRC may be required to share this information with tax authorities in your country of residence.

6.2 We will send you a statement 12 months after your first deposit, and then yearly after that.

6.3 We will send you a duplicate statement on request.

6.4 We may delegate any function or responsibilities under this agreement to a third party. If we do so, we will first satisfy ourselves that the third party is competent to carry out those functions and responsibilities.

7 END OF THE FIXED RATE PERIOD

7.1 At least 14 days before the end of the fixed rate period we will write to you and ask you for your instructions about what you'd like to do with your money on maturity. If we do not hear from you, we'll put your money into a postal easy access ISA.

8 CLOSING YOUR ACCOUNT

8.1 You can close your Account at any time subject to conditions 3.4 and 3.5, and any interest earned will be tax-free. If you have made a deposit into your Account in the same tax year as you close it, you cannot open a new cash ISA for the same tax year.

8.2 If your Account stops qualifying as an ISA we will close it and notify you. We will deduct income tax at the appropriate rate on the interest earned on your deposit so far, including any interest you have already been paid. The tax will be deducted from your Account before the balance is paid to you.

8.3 Your Account will cease to qualify as an ISA and become subject to the deduction of income tax in the following circumstances:
a) if the terms of the declaration on the application form are or become untrue;
b) if you transfer any of your rights as an account holder or use your Account as security for a financial liability;
c) from the date of your death; or
d) if HMRC instruct us accordingly.

8.4 If you die, your Account balance will normally be paid to your estate. When we receive notice of your death we will close your Account and pay any interest earned up to the date of death tax free. We will transfer the balance to a new variable account on which interest earned will not be tax-free. There will not be an early access charge in these circumstances.

8.5 We will notify you if, by reason of any failure to satisfy the provisions of HM Treasury ISA Regulations, your Account becomes or will become subject to the deduction of tax.

9 CANCELLATION

9.1 If you apply for this Account you will be able to change your mind and cancel your Account at any time before the end of the 14-day period starting on the day your Account is opened or the day you receive your welcome letter, whichever is later. If you cancel your Account within the 14 day period, you are free to subscribe to another ISA in the same tax year. If you miss the 14 day deadline you can still close your account subject to the withdrawal charge (see condition 3.5). If you do this you will not be able to open another cash ISA either with us or with another provider in the same tax year. If you decide to cancel we will repay you any money you have paid together with any interest due on it, or help you to switch the balance to another account. To cancel this agreement you should tell us by writing to us at AA Savings Team, PO Box 81, Pendeford Business Park, Wobaston Road, Wolverhampton, WV9 5HZ. There are no charges for cancelling your Account agreement within the 14-day period, and you do not have to give any advance notice.

Issue Date: 19 December 2014