Savings accounts for over 60s

Interest rates on savings depend on the type of account you choose. Typically, the less access you have to your cash, the higher the interest rate will be.

When you’re approaching retirement, you may not want to make too many long-term savings commitments. But if you’re prepared to lock your money away for at least a year, fixed rate savings accounts can offer attractive interest rates.

Instant or easy access accounts allow you to earn interest on your savings while still letting you withdraw money when you want, without being penalised.

You can often earn better returns than from your current account, but the interest rate usually won’t be as high as savings accounts where your money is tied up for years. Better rates might be offered on accounts managed online-only, and customers who meet certain requirements might be able to benefit. For example, if you already hold a current account with the provider.

Instant access savings accounts can usually be opened with as little as £1. They’re good for building up a rainy-day fund for emergencies if you need to get your hands on your cash quickly. Ideally, you should have enough reserves to cover about six months’ worth of bills.

The best instant access savings accounts for over 60s might not automatically be designed for older savers. So, it’s important to compare instant access savings rates across the whole market.

Regular savings accounts can be a good option if you want to put away a set amount each month and build it gradually. There will typically be a minimum and maximum limit on how much you can pay in every month. Payments will end when the account’s term ends, typically after a year, when your money will usually be shifted to a standard savings account.

Regular saver accounts often offer attractive rates of interest, but because you can only pay in a certain amount each month, your returns may be modest. Your rate will drop if you miss a payment or take money out.

This type of account could be best for short-term financial goals and could be useful if you’re saving for a specific event like a holiday or retirement party.

To open a regular savings account, you may need to have a current account with the provider to benefit from preferential rates. You’ll need to set up a standing order to pay into your savings account each month.

Fixed rate savings accounts, also called fixed rate bonds, tend to offer decent rates of interest that are guaranteed for a set length of time, typically one to five years. A five-year term would usually pay more interest than a one-year one.

You probably won’t be allowed to access your savings during the fixed term without facing a penalty, so make sure you can afford to tie up your money for the length of the deal.

If you’re looking to lock your savings away until retirement to maximise their earning potential, this type of account could be a good option for you. But if you think you may need to withdraw money at short notice, an instant access account may be more suitable.

The big selling point of cash ISAs is that you don't have to pay tax on the interest you earn. You can currently put up to £20,000 a year into a cash ISA, but this will be cut to £12,000 from April 2027 for those aged 65 and under. (For 66-year-olds and above, the £20,000 limit will remain.)

Cash ISAs are simple to use. Some allow unlimited withdrawals as well as offering fixed rates for higher interest, so they’re always worth comparing.

The right savings account for you depends on your personal circumstances and savings goals. Are you still working, how long do you intend to save for, and how much of a return would you like to see?

If you’re over 60 and looking to supplement your retirement income, you may want the flexibility of being able to access your savings when you want. Some savings accounts offer an option to have the interest paid directly to you every month, instead of accruing in the account. Just remember that this means your balance won’t increase if you’re taking the interest every month. However, if you’re planning to keep working for some time, you may be happy to tie up your money in a fixed term account with higher interest rates.

You should also think about how you plan to manage your account. Some are only available online or over the phone. Others can only be managed in-branch with a visit to your local building society.

To find the best savings account for you, it’s important to compare all the features as well as the interest rates.

If you want to compare savings interest rates for over 60s (or any age, for that matter) we can make it easier for you. At Comparethemarket, you’ll be able to check out the interest rates and other features of dozens of accounts in one place.

Ready to start saving? Start a comparison with us today.