Best regular savings accounts for over 50s
The best regular savings accounts for over 50s typically offer higher interest rates than other types of savings account. However regular savers are more restrictive, especially regarding how much you can invest. Therefore, to choose the best regular savings accounts, look at the features as well as the savings rates.
In addition, accounts with features designed for the older saver may not be as competitive as regular accounts. So, if you’re trying to find the best regular savings accounts for over 50s, 60s or 70s, compare accounts for any age.
The following information explains how regular savers work, the pros and cons and how to choose the best regular savings account for you.
What are regular savings accounts?
Regular savings account are savings accounts that require a monthly deposit. These monthly payments to your account are mandatory however there is a limit to how much you can pay and your total investment. If you’re happy with these restrictions, regular savings accounts offer some of the highest interest rates.
Although there’s a limit to your total monthly payment, some regular saver accounts are flexible about the amount you pay in. However, others insist you pay a specific amount for 12 months, usually between £25 to £500. If you fail to make the payment you risk losing your interest or the account being closed.
So, with a regular saver account, you need to be comfortable with the monthly payments. Also, as withdrawals may be limited or not allowed, you should be confident you won’t need the money.
How many regular savers can you have?
As regular savings accounts have a maximum monthly or annual deposit, they are designed for smaller saving pots. You can have more than one regular saver account but don’t forget each account would require you to make a monthly deposit.
Also, some regular saver deals are only available to existing customers which means you need a current account with the bank or building society to apply.
What are the best regular savings interest rates?
The best regular savings interest rates can be fixed or variable. Once your fixed rate period ends, you will automatically change to a variable rate of interest, which will inevitably be lower. Likewise, an account with variable savings interest rates from the outset could be reduced at any time.
Therefore, to get the best regular savings interest rates, keep an eye on the market and switch accounts as and when necessary.
Also remember you cannot pay a lump sum into this type of savings account. You are limited to the maximum amount you can deposit each month. This means that you only benefit from the higher interest rate on the amount paid in so far.
For example, if your maximum monthly deposit is £250, in the first month you only earn interest on £250. In the second month you earn interest on £500; £750 on the third month and so on.
So, if you have a lump sum at the outset, a fixed rate bond may be better as you will earn interest on the whole amount.
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What are the pros and cons of regular saver accounts?
The pros and cons of regular savings accounts will help you decide if this is the right type of savings account for you:
- They have some of the best savings interest rates
- Great for getting in the savings habit as you must make monthly deposits
- Restrictions prevent you from being tempted to dip into your savings
- You can have more than one regular saver account with different banks
- They are only for small amounts of money
- They usually only last 12 months, at which point the interest rate drops
- More restrictive than other types of savings accounts
Is my money safe?
As long as your bank or building society is authorised by the Financial Conduct Authority, your money is safe in a regular savings account. This is because accounts with FCA authorised institutions are protected by the Financial Services Compensation Scheme.
What is the best regular savings account for me?
To choose the best regular savings account you must be comfortable with the monthly payments and withdrawal restrictions. If you’re committed to saving, a regular savings account could be a good idea. However, if you can’t make the payments, a regular saver may not be the best account for you.
If you can’t commit to a fixed monthly amount or think you will need to dip into your account, an easy access account could be a better idea.
How to compare regular savings accounts
To compare regular savings accounts it helps to use an online comparison service. Which?, Moneyfacts, MoneySavingExpert and Savings Champion all compare the best regular savings accounts highlighting latest rates, account restrictions and minimum and maximum deposits.
Frequently asked questions
Can you withdraw from regular saver accounts?
You can withdraw from some regular saver accounts but not all, so look at the terms and conditions. Be aware that even regular savers that allow withdrawals will usually have limitations.
What is the advantage of a regular savings account?
The advantage of a regular savings account is that it pays higher interest rates. In addition, the required monthly payments encourage you to save, which can also be an advantage. However, the disadvantage of regular savings accounts is that the amount you can deposit and withdraw is restricted.
Therefore, if you are considering this type of savings account, always read the terms and conditions.
How do regular savings accounts work?
Regular savings accounts require monthly deposits, usually over a 12 month period. The amount you pay in may be fixed, ranging from £25 to £500. All the time your savings grow they earn interest. However, if you miss any monthly payments, you either lose interest or your account is closed.