Best savings accounts for over 60s

If you’re over the age of 60, you might be looking for the best way to build your savings pot for your golden years. Now could be a good time to review your finances to see how your savings could grow over the next few years.

If you’re over the age of 60, you might be looking for the best way to build your savings pot for your golden years. Now could be a good time to review your finances to see how your savings could grow over the next few years.

Rob Silvey
Finances expert
minute read
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Posted 20 AUGUST 2021

How to get the best savings rates 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. 

At this stage, you don’t want to be making too many long-term 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. 

What is AER? 

AER, or annual equivalent rate, shows you how much interest you could earn on your savings if you leave the money in the account for a whole year. 

It helps you to compare savings rates across accounts, regardless of how or when the interest is paid.

Best instant access savings accounts for over 60s 

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

You can 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 live in a particular postcode or 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.

Best regular savings accounts for over 60s 

Regular savings accounts can be a good option if you want to put away a small amount each month and build it gradually. You’ll usually need to pay in a minimum amount every month. There’ll also be a maximum limit on how much you can pay in. 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’ll probably already need to have a current account with the provider. That’s so you can set up a standing order to pay into your savings account each month.

Best fixed rate savings accounts for over 60s 

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 get at your money at short notice, an instant access account may be more suitable.

Best cash ISAs for over 60s 

A cash ISA is an account you’ll never have to pay tax on. As most people no longer pay tax on their savings, individual savings accounts (ISAs) have become less popular in recent years. But if you’re a high earner who doesn’t benefit from the personal savings allowance, or you have a significant amount of savings, you may want to use a cash ISA to take advantage of the £20,000 allowance. 

Above all, cash ISAs are simple to use and you can get ones that allow unlimited withdrawals as well as fixed rates for higher interest, so they’re always worth comparing.

Frequently asked questions

Which type of savings account is best for me?

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. But 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. Remember, your cash is protected under the Financial Services Compensation Scheme (FSCS) up to £85,000 per individual, per institution.

Are there any savings accounts specifically for over 60s?

Savings accounts aimed at the over 60s used to be fairly common, but these days you’ll be hard pressed to find age-specific accounts.

However old you are, it’s a good idea to compare savings accounts to find the right one for you.

How can I make the most of my savings?

If you’ve amassed a sizeable chunk of savings, it’s often worth spreading your money across different types of savings account. Say you have a lump sum of £20,000 but need to lay your hands on some of it in a couple of months' time, you could put £5,000 in a top-performing instant access account and the rest in a two-year fixed account. 

If you’re not sure what to do with your cash, you could put it into an instant access account while you're deciding, or ask a financial adviser for help.

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