Saga launches savings accounts for the over-50s: here's how they compare
Saga has launched two new savings products for the over-50s which offer discounts on food, travel, event…
2nd October 2019 11:09
by Stephen Little from interactive investor
Saga has launched two new savings products for the over-50s which offer discounts on food, travel, events and competitions
Saga has teamed up with Goldman Sachs to offer two new savings accounts for the over-50s.
The over-50s provider now offers an easy-access savings account paying 1.4% and a one-year fixed saver at 1.15%.
While the accounts are opened with Saga they are managed by Goldman Sachs.
The accounts provide membership access to Saga’s Possibilities programme, which offers discounts on food, travel, events and competitions.
The accounts
The Saga Easy-Access Savings Account pays 1.4% but comes with a 0.25% bonus for the first 12 months. This means that after a year your rate will fall to 1.15%.
Savers can withdraw their money as often as they need without fees or charges.
The one-year fixed rate saver pays 1.15% and you are only allowed to make deposits in the first 14 days.
If you do want to withdraw money from your account before the end of the one-year term, you will have to close the account and pay an early-closure fee.
Both accounts can be managed online or by telephone and deposits are accepted up to a maximum of £100,000.
However, a warning for prospective customers, if a saver has money in more than one account with Goldman Sachs International Bank, you will only be protected for £85,000 (the Financial Services Compensation Scheme limit), across all accounts.
This includes both Saga Savings accounts and the Marcus by Goldman Sachs easy-access online account.
Andrew Hagger, a personal finance expert at Moneycomms, says: “This is a competitive deal from Saga - pushing the likes of Cynergy Bank and Marcus both at 1.45% but the big difference with the Saga offer is that customers can sign up via telephone as long as they have an email address.
“This will prove a popular option with older customers who are not comfortable managing their financial affairs online due to security concerns.
“Saga is a respected and brand and I think this together with a top five savings rate should make this a popular easy access savings account.”
How the accounts compare
While Saga is offering an attractive rate for its easy-access account, it is beaten by a number of its rivals.
Anna Bowes, co-founder of Savings Champion, says: “It’s always important to search the whole market to make sure you can earn the most interest on your savings – don’t just trust the brands that you know – or that because it’s marketed to the over-50s it’s paying a preferential rate.
“That said, the easy-access account is competitive, although there are slightly better rates available.
“The one-year fixed rate bond, on the other hand, is disappointing – you can earn up to 1.80% gross/AER elsewhere – which on a balance of £50,000 means an extra £325 gross.”
Easy-access accounts
The top easy-access account currently on the market is Goldman Sach’s Marcus account which offers a rate of 1.45%. However, it comes with a 0.10% bonus for the first 12 months. This means that after a year your rate of saving will drop to 1.35%, compared to 1.15% for the Saga easy-access saver.
The rate was recently cut from 1.5% after nearly a year at the top of the best buy table.
Cynergy Bank is also offering an easy-access account at 1.45%, but the rate drops 0.70% after a year to 0.75%.
Coming in just behind is Virgin's Money Double Take E-Saver and Kent Reliance’s easy access account, both at 1.43%.
Best easy access savings accounts
Marcus by Goldman Sachs 1.45%Open this account online with a deposit of £1. Note this comes with an initial 12-month bonus of 0.10% so your rate will drop to 1.35% after one year.
Cynergy Bank Online Easy Access Account 1.45%Open online with £1. Introductory rate includes 0.70% for 12 months.
Virgin Money Double Take E-Saver 1.45%Open this account online with a minimum £1 initial deposit.
Bonds
The best one-year fixed saving currently on offer is from Al Rayan Bank at an EPR of 2.07%.
It is followed by Gatehouse Bank with an EPR of 1.90% and Aldermore at 1.85%.
Top one-year bonds
Al Rayan Bank 2.07% (EPR)Open this account online, in-branch or by phone with a deposit of £1,000.
Gatehouse Bank Fixed Term Deposit 1.90% (EPR)Open this account online with an initial deposit of £1,000.
Aldermore 1 Year Fixed Rate Savings Account 1.81%Open this account online with a deposit of £1,000.
This article was originally published in our sister magazine Moneywise, which ceased publication in August 2020.
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