Avoid over-50s savings accounts, says Which?Silver savings products don't offer best deals

29 June 2013

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Many older savers who are looking for instant access accounts may be drawn in by age exclusive deals. But new Which? research reveals that these 'silver savings accounts' aren't worth bothering with if you're looking for a decent interest rate.

Which? analysed 11 bank and building societies savings accounts, aimed at older age groups – and found disappointing rates on offer.

The best over-50s instant access account paid out less over a year in comparison with the best instant access account for any age. In total, out of the 16 accounts on offer from the 11 providers, only six offered interest rates of over 1%.

One account, offered by West Bromwich Building Society, account only offered a trivial 0.05% interest.

The best of the silver savings accounts

From the 16 age specific accounts, Chorley & District Building Society's Over 60s Account Issue 2 had the highest rate of interest at 1.5%, as well as allowing unlimited withdrawals by post or branch.

Despite this, it doesn't match NS&I's non-age restricted Income Bond, which pays 1.75% and has unlimited access by post, phone and online. In Which?'s view, an age specific account does not offer any advantage for people wanting an easy access savings account.

Where to find the best interest rates

If an instant access account isn't what you're looking for, but you still want a higher rate of interest for your savings, you may want to look at a fixed-term, fixed-rate savings account.

These allow you to put away your savings for a pre-determined period, while earning more interest, on the proviso that you leave your savings untouched for the term.

Fixed rate savings accounts tend to be on offer from between one and five-year terms, earning you from 1.99% interest in a one-year Post Office Online Bond, and 2.90% in a FirstSave five-year Fixed Rate Bond.

Regular savings accounts

On the other hand, if high interest is what you're looking for and you don’t mind monthly deposits, then regular savings offer the greatest interest rates of all. First Direct's regular savings account offers 6% a year.

Unfortunately these accounts don't come without their risks, with many penalising the investor for missing payments and exceeding withdrawal limits. These penalties can range from account closure, to interest reduction and extra charges. Don't forget to keep an eye out for these, and never hesitate to ask the bank or building society about whatever hidden penalties there may be.

So, before thinking of diving in to an over-50s account, have a look around to see what best suits your savings needs and you may find a simple solution to earning more, in a way that's best suited to you.

More on this...

  • Best rate savings accounts - Find out the top rates for your savings
  • Call the Which? Money Helpline - for one-to-one money guidance
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