Banking/Savings Section

Pensioners Should Look At These Savings Accounts

August 2005

Within the last several months there's been a waft of savings accounts introduced solely targeting the 'grey pound'.

The trouble is with many of the older generation is that they don't adapt well to change, and perhaps have more respect for financial institutions that is now day's warranted Long gone are the days when there were 2 or 3 types of banks in the local town and the bank manager knew your name. Now competition is hot within this sector and financial companies are adept in trying all sorts of tricks (some good, some not so good) to try and entice your business. The trick to finding the best deal is always to do your research and never signup for the first deal that's offered.

At Least 10 Banks/Building Societies Are Offering Senior Savings Accounts

Senior Accounts are a step in the right direction because they are setup with the pensioners needs and demands in mind. For example internet access is often a problem for the older generation as are cash machines so most of the accounts come with telephone banking and traditional passbooks. Most accounts will also let you to pay in your weekly pension.

A significant point to be aware of with savings accounts is the sly trick of banks announcing a headline grabbing interest rate but only as a bonus for say 6-12 months. After this time period is up the banks love to drop the interest rate to an uncompetitive level. Therefore at least half of the following savings accounts come with an interest rate guarantee which will match the base rate normally for several years.

Compare Like With Like

When looking at the table above there are clearly some winners and losers. The Coventry Building Society looks like a clear winner with an eye watering internet rate of 5.5%, remember to take into account the 1% bonus for the first year. The worst buy is obviously the Yorkshire building society paying a stingy 3.65%.

Which account though is best for you can only be determined in your financial circumstances. For example, how much money you have and the min-max deposits etc, and don't forget to investigate the interest rate guarantee which means the bank can't play any tricks on you and significantly drop the rate at some time in the near future.

Summary

It's often easy to criticise the banks but not so with these savings accounts that are geared towards pensioners. Recent research by the Post Office has shown that over 1/3rd of pensioners money is rotting away in high street banks paying very low levels of interest. Now it's never been easier to change bank accounts, so if you want the best deal for your money which will earn you extra money then do something about it today!

See Also

• If you're a non-tax payer here's an easy £53 for you!
• Emergency Funds - Why you should have one
• Time to dump ING Direct
• Find's List of Banking Links