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Five minute finance: Savings and investments

Five minute finance: Savings and investments

Category: Savings

Updated: 19/04/2010
First Published: 19/04/2010

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

By the time savers approach their formative years, many have built up significant nest eggs. Historically, accounts aimed specifically at the over 50's market offered some of the most competitive rates on the market. However, since the banking crisis, demand for savers' money has increased and providers are keen to attract all customers, regardless of age.

Older savers shouldn't discount products aimed at their age group. In fact, SAGA has a market leading fixed rate ISA. However, savers need to ensure they look at the market as a whole to find the most competitive account.

Once they reach retirement, many people use their savings to supplement their income. To this extent, finding an account paying monthly interest becomes important, yet only a third of accounts on the market actually offer this facility. This can have a sizeable effect on the rate of interest that can be achieved.

Furthermore, many of the most competitive deals are operated online and, while some older savers are internet savvy, they may be less willing to manage their account this way compared with younger savers.

Market leading ISA

Those looking for a regular saver ISA are being offered a market leading fixed rate of 4.00pc by Principality Building Society. Savers can invest between £20 and £425 per month into the account, which matures on 5 April 2011. If the full allowance is not invested during the year, the account can be topped up during March 2011. If a payment is missed, a withdrawal made or the account closed for any reason during the term, the Variable Cash ISA Rate is paid, currently 0.60pc.

Fix with access

Savers put off fixed rate bonds by the lack of access to funds during the term should consider the new bonds from Leeds Building Society. Unlike other bonds on the market, savers can access up to half of the original capital, without notice or penalty at any time. Savers can invest between £100 and £1m (£2m for joint accounts) into the accounts, which pay 3.20pc on the three year bond and 4.00pc on the five year bond. A monthly interest option is also available for those looking for a regular income.

Saga flips the trigger for savers

Saga has launched its 5 Year Trigger Market Linked Account, which pays 6.25pc AER, providing the average of the FTSE 100 does not fall between the initial and maturity index readings. If the index does fall, the original investment is returned on maturity. Between £500 and £1m (£2m for a joint account) can be invested in the account, which is also available as an ISA, subject to a minimum investment of £5,100. If a withdrawal is made, a 1.50pc charge is payable.

Guaranteed investments from Santander

Santander has launched a range of guaranteed investment products. Under the Guaranteed Growth Plan, investors can track the growth in the FTSE 100 or the Halifax house price index. The account pays a maximum of 50pc of the growth of the chosen index, with a minimum return of 10pc payable. The plan has a five and a half year term, maturing on 8 December 2015. A Guaranteed Capital Plan is also available, offering potential returns of up to 28pc.

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Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.