The Best Cash ISA Rates for Over 60s

There is a common misconception that cash ISAs are reserved for the young.

The popular investment wrappers are designed to take advantage of compound interest, which allows savers to earn interest on their interest each year.

This means that the earlier you start, the more you can benefit from the tax exemption.

But this doesn’t mean that over 60s should ignore their ISA options. There are a few great rates out there which have been specifically tailored for retirees and mature investor…if you know where to find them.

We’ve scoured the market for the best deals if you are 60 or above, whether you are simply looking for an instant-access savings account, or a fixed-rate home for your money.

You may be looking to generate income, or you may just wish to keep some funds safe for later life.

Compare the Best Over 60’s Savings Rates

View The Top 10 & Apply Online

Best Over 60s Income ISAs with Highest Fixed Rate

A new type of ISA launched in 2017 which may be of interest to sophisticated investors. Especially those looking to diversify their portfolio and generate a better return on their ISA funds in their 60s.

These Innovative Finance ISAs are not traditional cash ISAs, and are not covered by the government’s FSCS protection. However, each provider may have their own scheme to help protect investors.

LCF Fixed Rate ISA 

  • Interest rate: 8 per cent AER
  • 3 Year Term
  • Tax free interest
  • Minimum investment: £5,000
  • Good to know: This is a not a cash ISA, it is in fact one of the new innovative finance ISAs.
    The superb rate is generated from loans to small businesses in the UK. As such, it is not covered by FSCS.
  • Pays income quarterly into a nominated bank account. Good for those seeking income rather than compound growth.

Best Over 60s Fixed Rate Cash ISAs

Fixed rate cash ISAs are for those who can afford to keep money locked away for a set time period. They usually pay good better rates than easy access ISAs.

1. Shawbrook Bank – 5 Year Fixed Rate Cash ISA

  • Rate: 2.30%
  • Term: 5 Years
  • Min Investment: £5,000

Shawbrook’s five year cash ISA with market-leading 2.30% guaranteed return. This might be significantly less than Innovative Finance ISAs but it carries less risk and is protected by the FSCS up to £85,000.

Although the highest rate available for a Cash ISA, you’ll need a cool £5,000 to open an account at Shawbrook. Any withdrawals during the fixed rate period are subject to the loss of 360 days interest as an early exit charge.

Website: https://www.shawbrook.co.uk

2. Halifax – ISA Saver Fixed

  • Rate: 2.25%
  • Term: 5 Year
  • Min Investment: £500

Halifax is surprisingly offering one of the best cash ISA rates on the market at the moment, competing with the high rates set by challenger banks.

READ  The Best ISA Deals of 2018/19

An advantage of using a well-known high-street bank will be that you are able to manage your account online, via post and via one of their branches located throughout the UK.

The minimum to open this account is £500, and your money will be held for 5 years. Each account with over £5,000 qualifies for the monthly Halifax savers prize draw, where it is possible to win £100,000.

Website: https://www.halifax.co.uk

3. United Trust Bank

  • Rate: 2.25%
  • Term: 5 Years
  • Minimum investment: £15,000
  • Transfers in only

United Trust’s Five Year ISA Bond promises an almost-market leading 2.25%. That’s nearly the best out there by our reckoning. Interest is paid annually and withdrawals are subject to a penalty.

Bear in mind, United Trust are a little old fashioned – applications can only be made by snail mail.

Website: https://www.utbank.co.uk

Leeds Building Society 5 Year Fixed Interest Account

  • Interest rate: 2.00 per cent AER
  • Minimum investment: £100
  • Protected by FSCS up to £85,000
  • Good to know: Withdrawals and transfers are permitted, but you’ll lose any interest accrued in the previous 365 days.

Website: http://www.leedsbuildingsociety.co.uk/

Best Over 60s Instant Access Cash ISAs

Leeds Limited Issue Online Access ISA 

  • Interest rate: 1.16 per cent AER.
  • Minimum investment £1,000
  • Good to know: A great deal, but if your balance drops below £1,000 at any point, your interest rate drops to 0.05 per cent. It is also worth noting that all interest is paid at the end of the ISA term (31 January 2019), not monthly.

Post Office Easy Access ISA

  • Interest Rate: 1.15% AER (Reverts to 0.25% after 12 months!)
  • Minimum investment: £100
  • Good to know: The 1.07 per cent rate includes a 0.82 per cent ‘bonus’ which is only available to new customers for the first year of investing. After this, it reverts to a standard, very low 0.25 per cent.

Chorley Building Society Over 60s Account

  • Interest rate: either 0.7 per cent or 0.9 per cent AER for ISAs over £85,000.
  • Minimum investment: £1
  • Good to know: The top rate of 0.9 per cent is only available to savers with £85,000 or more in their account.
    While Chorley’s ISA is FSCS protected, this protection only applies to the first £85,000 of any deposit or investment.

Saga ISA Easy Access

  • Interest rate:  0.85 per cent, per annum.
  • Minimum investment: £1
  • Good to know: Open to anyone over the age of 50. After 12 months, your balance is transferred to the Saga Telephone Standard Saver account, which currently pays just 0.05 per cent AER.

Other options are available, such as dabbling with stocks and shares with a stocks and shares ISA. This type of ISA is for the longer term, but could be an option to generate income. Find out more here:

Last updated: April 13th, 2018

Kathryn Gaw

Kathryn Gaw is a financial journalist based in Belfast, Northern Ireland. She has been writing about personal finance and investment trends for more than a decade, and her work has been featured in the Financial Times, City A.M., the Press Association, and The Irish Independent, among many other publications.

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