If you’re wondering which are the best savings accounts for over 60s, you’ve come to the right place. This article will look at the most attractive savings rates on regular savings accounts for sexagenarians and compare them to ISAs.
Best savings accounts for over 60s 2022: Summary Table
|👴️ Can people over 60 open savings accounts?||Yes, absolutely!|
|📢 Types of saving accounts for over 60s?||•Easy Access Savings Accounts|
•Regular savings accounts
•Notice savings accounts
|😎 Savings account or ISA for over 60s?||Your decision depends on your financial needs and risk profile|
|💣 Disadvantage of savings account?||Low-interest rates|
Can people over 60 open savings accounts?
Just because you reach the age of 60 or more doesn’t mean that you should stop saving. Many people in their sixties open ordinary savings accounts for the first time. They sometimes decide to access the 25% of their pension pots they can withdraw tax-free before reaching retirement age. They then pump some or all of that money into one of the best easy access savings accounts for 60s to have enough cash on hand when they later need it.
Most 60-Year-Olds have current accounts
Most people age 60 or over have a current bank account or current building society account. These accounts are basically for managing your everyday transactions – making cash withdrawals and paying bills. Most don’t pay you any interest on credit balances, but the account provider might sometimes offer interest to tempt new customers to their ranks.
The interest can be pretty attractive – anywhere up to around 2%, but it is only offered for a few months, so don’t be misled.
The main reason you would use a current account is for convenience and immediate access to your money. However, these accounts certainly do not offer anywhere near the best savings rates for over 60s.
Best Easy Access Savings Accounts over 60s can access
The next step up from the current account is the easy access savings account. They are the simplest form of savings account and are designed to be a vehicle that allows you to save money with minimum restrictions on making withdrawals. In addition, some providers may provide you with bonus interest payments if you meet certain conditions.
However, you need to be aware that although they are instant access savings accounts, some providers cap how many withdrawals you can make in a year, while others may reduce the amount of interest if you exceed a given number of withdrawals. In other words, you need to check the terms and conditions offered carefully.
The interest varies anywhere from 0.1% to 2%. Unfortunately, this means these best easy access savings accounts for over 60s are not greatest when trying to protect your savings against inflation.
Best regular savings accounts over 60s can Access
Regular savings accounts ask you to save a fixed amount of money every month. The money you save will earn interest over time. The interest offered is usually somewhere between 2% and 3% per annum. Occasionally, a provider may come up offering 4% or 5%. However, it’s worth being aware that the published interest rates are often only offered for the first 12 months.
Some regular savings accounts may not be instant access savings accounts – but others will allow you to instantly access your money a given number of times a year. The other thing to watch out for is whether the account offers fixed or variable rate interest. So again, it’s important to check the terms and conditions, so you are not caught unawares.
Notice accounts for the over 60s
Notice accounts are savings accounts that require a period of notice before you can withdraw any money. The notice period generally varies between 30 and 180 days. Unlike the best instant access savings accounts for over 60s, notice accounts tend to offer slightly better interest rates because that is the incentive to persuade you to let the provider hang onto your money that little bit longer.
However, even these marginally improved interest rates are nowhere near enough to offset inflation, especially having risen as it has in recent weeks.
Fixed rate bonds
The ultimate in notice accounts is the fixed-rate bond. We are using the term “notice” loosely because the notice you’re giving is the full term of the account. In other words, you cannot access your money until the fixed term is up.
Terms stretch from a six month to a five year fixed rate, and in return for being denied access to the money, the provider offers you a better interest rate – which is also fixed for the duration.
You might be better off going for one of the best ISA fixed rates for over 60s as these do allow you access your money during the duration. You will face a penalty if you do, but it is not as severe as the penalty you would face if you withdraw money from a fixed rate bond before the term is up.
Are over 60s savings accounts really worth it?
You won’t find any savings accounts specifically for over 60s. But there are different types of savings accounts that are more suitable for sexagenarians. Again, it’s a case of finding something that suits your individual circumstance and goals.
So, if you want the best savings interest rates for over 60s (or any age for that matter), you have to search around. You could start off using the comparethemarket site.
Savings accounts vs ISAs – Which are best?
The best aspect of savings accounts is that the money you put into them is safe. When authorised financial services companies registered in England (banks, building societies, and credit unions) go bust, the Financial Services Compensation Scheme (FSCS) protects you for up to £85,000 worth of savings.
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Under rules created by the Financial Conduct Authority and the Prudential Regulation Authority, FSCS protection covers mortgages, insurances and investments. Under some temporary circumstances, the protection amount can be as high as £1 million for a short period. Check out the FSCS page on the Moneyfarm website for more information.
The worst thing about savings accounts is the poor interest rate they offer. It’s of much greater significance now, with inflation at its highest in 30 years and likely to continue rising. But what about ISAs?– What’s the difference between ISAs vs Savings Accounts, and will an ISA be better suited?
There are five types of ISAs. They are
- Cash ISAs
- Innovative Finance ISAs
- Junior ISAs
- Lifetime ISAs
- Stocks and Shares ISAs
We will discount the best easy access Cash ISA rates for over 60s because they don’t offer much higher interest rates than savings accounts. However, they do still score because they are tax wappers.
With a savings account, if you earn more than £1,000 worth of interest in one tax year, you will be taxed. If your money is in a Cash ISA, you won’t.
Next is the Junior ISA. These are designed for setting money aside for children, so we can discard those as saving vehicles for over 60s.
Then there is the Lifetime ISA which is geared more towards younger people, particularly those looking to take their first step on the property ladder.
As for Innovative Finance ISAs, they are designed for peer-to-peer lending, and they carry considerable risks, which doesn’t really make them very suitable for people in their 60s.
That leaves us with the Stocks and Shares ISA. Now, this type of savings account does offer significantly higher interest rates. However, it’s not really a savings account. Instead, it’s an investment vehicle, and that’s why it is also known as an Investment ISA.
It’s never too late
It’s almost never too late to start saving for your retirement. Of course, the earlier you start, the better, but many people start in their 50s. A lot of people also think about pension transfer. If you’ve changed jobs a few times in your lifetime, you might have acquired several different pensions. Amalgamating them into one will make them easier to manage and ensure you get the best return.
When you reach your 60s, the time is right to review your financial planning to ensure you have easy access to the cash you need, while the rest of your savings are well invested to provide you with additional income in the years to come.
Whatever you do to secure the best savings accounts for over 60s with good interest rates, don’t let your hunt for the best rates savings accounts lead you to deal with a company that is not authorised and regulated by the Financial Conduct Authority. You could be falling for a scam and could lose your life savings.
It is also essential that the account you are offered is protected and regulated by the Financial Services Compensation Scheme.
What is a savings account for over 60s?
A savings account for over 60s has higher and stable rates with the possibility of monthly interest. Therefore, pensioners earn good interest in their savings while using one of the safest investment vehicles.
Pros of savings account for over 60s?
Depending on the type of savings account, savings accounts for over 60s can have more competitive interest rates than regular savings accounts, minimal investment risk and no withdrawal penalties.
How to make money with a savings account?
There is no limit to how much you can have in a savings account. However, the amount of savings over 60s can have in their savings account depends on the initial deposit amount, contribution frequency, savings duration, and the interest rate paid on the account