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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.

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.

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 access savings accounts for over 60s

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 for over 60s

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

Cash ISAs for over 60s

With a cash ISA, you’ll never have to pay tax on the interest you earn from your savings, which may be useful as rates creep up. You can save up to £20,000 in ISAs during each tax year.

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.

Did you know?

According to government figures, the greatest number of UK ISA holders are aged 65 and over – around 7.1 million. The highest proportion of ISAs valued at £50,000 or more are also held by savers in the older age group.

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. 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.

How can I compare savings accounts for over 60s?

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.

Frequently asked questions

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.

Are there 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.

Is my money safe in a savings account?

Your money should be protected under the Financial Services Compensation Scheme (FSCS) up to £85,000 per individual, per institution.

When on the lookout for the best savings accounts, always make sure the financial institution you choose is authorised and regulated by the Financial Conduct Authority (FCA). This will ensure your money is protected under the FSCS rules.

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.

Is it too late to start saving now?

The sooner you start saving for retirement, the better. But it’s never too late to start putting money aside.

Once you’re in your 60s, it’s a good time to take a financial health check and review your plans for the future. You'll want to make sure you have easy access to cash when you need it, while the rest of your savings continue to earn the best possible rate of interest for your later years.

The content written in this article is for information purposes only and should not be taken as financial advice. If you require support on the products discussed here, please speak to your bank/lender or seek the advice of an independent professional financial advisor. We also have more information on our Customer Support Hub.

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Page last reviewed on 06 JANUARY 2023
by Alex Hasty