Over 50s' Savings Accounts

Some 30 banks and building societies offer over 50s' savings accounts . In recent years the institutions have recognised the growing importance of the 'grey pound' and the 'silver surfer'. Over 50s' accounts are available via branch, post, telephone of the internet although not all institutions offer all these options.

Many older savers opt to supplement their income with regular monthly interest payments. Accounts targeted at the older saver include easy access / instant access, notice accounts and term accounts / bonds. Minimum investment levels, as with other accounts, range from £1 upwards but many over 50s' accounts allow a much higher level of maximum deposits than 'ordinary' accounts.

You may choose accounts that pay interest monthly or annually while savers who can afford to tie up a lump sum for 12 months or longer may be able to achieve a higher interest rate with a fixed rate bond. However, many of these bonds do not allow income to be drawn monthly.

Anyone considering an over 50s' savings account should check whether the headline rate of interest includes a 'bonus' which may be linked to withdrawals or time-limited. Do check the terms and conditions of the account. You may find that the account you have chosen requires pension credit to be paid in on a regular basis.

Over 50s' savings accounts are basically a marketing exercise - do remember to check the rates available on other savings accounts, you may find they are more competitive.

Finally, don't be taken in by an impressive-sounding name! What's important about your savings account is the rate of interest it pays and the security it offers for your funds, not whether it calls itself 'gold', 'platinum' or 'premium' etc.

Last Updated: April 2008 © Moneyextra.com

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