Best savings accounts for the over 60s

Seeking out the best savings account is important no matter what your age. But if you’re over 60, you might be thinking about your retirement, which means it’s even more important to ensure you’re building a decent savings pot for your future.

This guide explores the different savings options available for those over 60.

What type of savings account should I get?

This will depend on your savings goals and whether you’re looking for a stable interest rate.

If you want an account that gives you the flexibility to access your money when required, an easy-access savings account could be the way to go. This type of account lets you pay in money when you want to as well as withdraw it. The downside is that interest rates aren’t always competitive, but they are variable which could work to your advantage when the base rate is on the up.

Alternatively, you could choose a notice account. This still gives you access to your savings, but you will need to give notice if you need to withdraw your cash. Typically, you will need to give anywhere between 30 and 180 days’ notice depending on the account. Interest rates are usually higher than they are for easy-access accounts.

If you have a lump sum to invest and you’re happy to lock it away for a period of between 6 months and 5 years, a fixed-rate bond might be more suitable. Because you’re required to leave your money tied up for a set term, interest rates are more competitive. Just be aware that interest rates are fixed, so if external interest rates rise, you won’t see any benefit. Also note that once you’ve paid in your lump sum, you can’t usually add further money.

For those preferring to put a sum of money away each month, a regular savings account could be worth considering. Here, you save a set amount each month for a year, and after that, you’ll be able to access your cash.

Finally, another option is a tax-efficient cash ISA. You can choose between easy-access cash ISAs and fixed-rate cash ISAs, depending on what suits your financial plans. You can also invest money into a stocks and shares ISA if you prefer – however, this will only be suitable if you’re planning to invest for at least 5 years, preferably more, and it’s sensible to seek financial advice first. Although stocks and shares ISAs have the potential to offer higher returns, they are also riskier and you could end up getting back less than you originally invested.

For the 2024/2025 tax year, you can invest up to £20,000 into an ISA – this can be invested in either a cash ISA or a stocks and shares ISA, or split between them.

Are over 60s savings accounts worth it?

That depends. Over 60s savings accounts could be a good option if they pay a high rate of interest and offer the right kind of flexibility. However, it’s crucial to look at exactly what an over 60s account offers compared to a standard savings account that can be opened no matter what your age.

Don’t assume that if an account specifically states it’s for the over 60s that it’s the best option for you. Make sure that it is a truly competitive deal compared to the wider market before signing up to anything.

How to choose the best savings account

To find the best savings account, compare the whole market carefully. Consider which account offers the best interest rate and which is most suited to your needs. The following points can help you with your decision:

• Access. How much access do you need to your savings? Are you happy to lock your money away for a while or would you prefer to be able to withdraw cash if you need it? If you’re not sure, a notice account could be a good compromise.
• Account management. Are you happy managing your account online or via an app, or would you prefer to visit a branch if required?
• Interest rate. Always check how the interest rate you’re being offered compares to other accounts on the market to make sure it’s a good deal. Keep in mind that easy-access rates tend to be variable, which means if the base rate continues to increase, your account interest rate is likely to rise too. But if rates go down, your account interest rate could drop. Fixed-rate accounts have a fixed interest rate.
• Minimum balance. Many easy-access savings accounts can be opened with as little as £1. But you’ll usually need a larger sum of around £500 to £1,000 if you want to open a fixed-rate bond – remember that you can’t usually top up a fixed-rate bond, so it’s best to invest a larger sum of money from the outset.
• FSCS protection. Check whether your money will be protected under the Financial Services Compensation Scheme, which protects up to £85,000 per person, per financial institution. If your savings provider has a UK banking licence, you’ll be covered.

Pros and cons

An overview of our savings accounts for over-60s comparison

Whatever your age, it’s important to consider what you want from your savings account before deciding. Ask yourself if you’re happy to tie up your funds and for how long? How do you want to manage your account and how much of a deposit have you got saved up?

As the Bank of England base rate continues to rise, savings rates are gradually becoming more competitive, so the key is to shop around and look for the best deal. Don’t feel you have to pick a savings account that’s advertised as being for over 60s – make sure you do your research fully first.

Frequently asked questions

• Can I only choose from over 60s accounts if I am over 60?

  No. Over 60s can open the same savings accounts as other savers in the wider market.

• Do I need to pay tax on the interest I earn?

  This will depend on the type of account and your personal savings allowance (PSA). If you're a basic rate taxpayer, the personal savings allowance means you can earn up to £1,000 a year in savings income, tax-free. If you're a higher-rate taxpayer, you can earn up to £500 a year. You'll need to pay tax on anything over this. However, if you save in an ISA, any interest you earn is completely tax-free – it doesn't count towards your PSA allowance.

• How many savings accounts can I have?

  You can have as many savings accounts as you wish, which means you can have different types of savings accounts for different purposes. You can compare a range of savings accounts here.

Written by

Rachel Wait

Writer

Rachel Wait is a freelance journalist and has been writing about personal finance for more than a decade, covering everything from insurance to mortgages. She has written for a range of personal finance websites and national newspapers, including The Observer, The Mail on Sunday, The Sun and the Evening Standard. Rachel is a keen baker in her spare time. See full bio