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/ | Min | Min | Interest | Notes |
|---|---|---|---|---|
Dudley BS | 60 | 500 | 1.15 | Instant access |
Earl Shilton BS | 50 | 1,000 | 1.20 | No notice; 3% bonus if |
Market Harborough BS | 55 | 5,000 | 2.95 | One-year bond; earlier |
Northern Bank (NI) | 50 | 1 | 2.00 | Instant access |
Progressive BS | 50 | 500 | 2.75 | Instant access |
Ulster Bank (NI) | 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/ | Min | Min deposit (£) | Interest | Notes |
|---|---|---|---|---|
Coventry BS | 60 | 500 | 5.25 | Instant access; includes |
Market Harborough BS | 60 | 1 | 4.85 | No notice |
Northern Rock | 50 | 5,000 | 4.80 | 30 days' notice |
Ipswich BS | 50 | 2,500 | 4.67 | 60 days' notice; includes |
Northern Rock | 60 | 5,000 | 4.64 | No notice |
Leeds BS | 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!