Superior Savings Accounts For The Over-50s

No fewer than 27 different banks and building societies offer accounts aimed at older savers. We pick the best of this bunch.

Although the art of saving sensibly has been largely forgotten by younger people, older generations still understand the financial power, control and security which saving provides.

This is evidenced by the growing range of savings accounts aimed specifically at savers who are fifty or over. According to the July issue of Moneyfacts magazine, senior savers can choose from no fewer than 43 specialist savings accounts. These accounts are particularly popular among building societies, which account for all but four of the 27 different providers.

However, despite some impressive-sounding names (such as "Super", "Gold" and "Premium"), some of these accounts pay inferior rates of interest and should be avoided at all costs.

Here are the 'Don't Buys' for older savers, all of which pay an annual interest rate of less than 3% before tax:

Don't Buy savings accounts for the over-fifties

Provider/ Account name	Min age	Min deposit (£)	Interest rate (% AER)	*Notes*
Dudley BS Super 60	60	500	1.15	Instant access
Earl Shilton BS Heritage	50	1,000	1.20	No notice; 3% bonus if no more than four withdrawals a year
Market Harborough BS 55 Plus	55	5,000	2.95	One-year bond; earlier access on loss of sixty days' interest
Northern Bank (NI) Midas Gold	50	1	2.00	Instant access
Progressive BS Premium Return	50	500	2.75	Instant access
Ulster Bank (NI) 55 Plus	55	2,500	1.65	Instant access

Source: Moneyfacts magazine, July 2006

Now let's turn our attention to the cream of the crop:

Best Buy accounts for senior savers

Provider/ Account name	Min age	Min deposit (£)	Interest rate (% AER)	*Notes*
Coventry BS Sixty-Plus Saver (2)	60	500	5.25	Instant access; includes 0.75% bonus for one year; Base Rate guarantee
Market Harborough BS Onthedot Sixty+ Surfer	60	1	4.85	No notice
Northern Rock Silver Savings 30	50	5,000	4.80	30 days' notice
Ipswich BS Diamond Plus	50	2,500	4.67	60 days' notice; includes 0.8% bonus until 31/05/07
Northern Rock Silver Savings	60	5,000	4.64	No notice
Leeds BS Flexible Freedom	50	500	4.50	Instant access

Source: Moneyfacts website, 27/07/06

As you can see, each of these six Best Buy accounts thrashes the rates on offer in our Don't Buy table. However, there are even better deals on offer for older savers who have Internet access, known as 'silver surfers'. For example, the easy-access ICICI Bank HiSAVE account pays 5.15% AER on £1+ to Web-savvy savers aged 18 or over (with no strings attached), making it the clear winner.

Finally, savers of any age who need instant access to their savings via a cashcard should take a look at the Citibank Flexible Saver, which pays 4.83% AER on £10,000 to £1 million, including a bonus of 0.54% for six months.

More: Use the Fool to compare savings accounts, bank accounts and credit cards!