Savings account of the month

The AA is usually better known for its breakdown cover than for its financial services, but its Internet Extra (issue 3) account is currently one of the best savings accounts on the market.

It's an instant-access variable savings account that offers a headline rate of 2.8% AER. This rate includes a 2.3% bonus for the first 12 months. So if you're looking for an instant access savings account, this account is a good option as money can be deposited or withdrawn easily.

It has topped Moneywise's best-buy tables for several months with its market-leading rate, and it allows unlimited withdrawals without a drop in interest rate. You can start saving from just £1 and still enjoy the good interest rate.

Be warned, however, that the rate is variable - while it's competitive at the moment, and has been for the past few months, it may not stay that way.

There are a few other disadvantages: after 12 months the rate drops to just 0.5%, so it's best to move on before the bonus rate ends. If you'd prefer to stay with your savings provider, however, and don't want to search the market again after a year, this account isn't ideal.

Added to this, the account can only be managed online and the lack of branch access may prove difficult. It's also unavailable for joint account holders, and interest is only added annually.