As a retiree, you want to ensure that you store your funds in the right account so that your money continues to work for you once you’ve left the workforce.
After devoting many decades to your career, you’ll want to be confident that your savings can cover your expenses for the rest of your life. Keep reading to discover the best accounts for seniors looking to maximize their savings.
High-Yield Savings Account
“High-yield savings accounts are an excellent option for retirees looking to preserve capital while earning a competitive interest rate,” said Taylor Kovar, certified financial planner (CFP), founder and CEO at 11 Financial.
“These accounts typically offer higher interest rates than traditional savings accounts, providing retirees with the opportunity to maximize their savings without taking on excessive risk.
You want to find a savings account that pays a competitive rate so your money continues earning interest to combat soaring inflation.
What should you look for?
“Look for accounts with no monthly fees and easy access to funds, as retirees may need to withdraw funds for living expenses or unexpected expenses,” noted Kovar.
Many accounts will let you store your funds and access your money without any monthly maintenance fees. This will help you keep more of your money as you manage your retirement expenses.
Kovar continued, “Online savings accounts offered by digital banks often feature competitive interest rates and minimal fees, making them attractive options for retirees seeking higher yields on their savings. These accounts offer the convenience of online banking and 24/7 access to funds, making them suitable for retirees who prefer to manage their finances digitally.”
Money Market Accounts
“Money market accounts combine the features of savings and checking accounts, offering competitive interest rates while providing check-writing privileges and ATM access,” said Kovar.
Retirees may find money market accounts appealing for their liquidity and stability, making them suitable for short-term savings goals or emergency funds.
If you want to earn more money, you can look into these money market accounts. The goal is to find an account that allows you to connect your funds and allocate money to this type of investment when you’re ready to do so.
What should you look out for?
Kovar recommended, “Look for accounts with low fees and minimum balance requirements to maximize returns.”
CDs
“CDs are fixed-term deposit accounts that offer a guaranteed interest rate for a specified period, ranging from a few months to several years,” said Kovar. “Retirees can benefit from CDs’ safety and predictability, as they provide a guaranteed return on investment without exposure to market fluctuations.
If you don’t need to access your funds in the near future, you can find a higher rate of return by investing in a CD.
What should you look out for?
“Consider laddering CDs with varying maturity dates to create a steady stream of income while maximizing interest rates,” noted Kovar.
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Retirement-Specific Savings Accounts
“Retirees may also consider retirement-specific savings accounts, such as Individual Retirement Accounts (IRAs) or Health Savings Accounts (HSAs), depending on their financial goals and tax considerations,” according to Kovar.
You want to ensure that you have the funds to handle medical bills and other specific expenses that could pop up.
What should you look out for?
“Traditional and Roth IRAs offer tax advantages for retirement savings, while HSAs provide tax benefits for qualified medical expenses in retirement,” explained Kovar.
What Seniors Should Consider When Looking For in a Bank Account
“When you’ve retired, you need to look for certain features in your savings account to protect and build your money,” shared Scott Lieberman, the founder of TouchdownMoney.
“Some banks, such as TD, offer fee breaks for customers over 60. Others might offer higher interest rates for your money, cash back on your purchases and other perks that seniors will likely use frequently.”
Here’s What Seniors Should Look For:
- Consider the APY. You want to land a competitive rate so your money continues working for you.
- Fees are waived for retirees. You want to limit how much you spend on your banking.
- The ability to connect your accounts. You want to link your checking, savings, and any other accounts that you have.
- In-person banking for those not comfortable with online banking. If you prefer in-person banking, you’ll want to find a bank that has a branch near you.
Bank Accounts For Retirees
We wanted to include some bank accounts worth considering as a senior.
TD 60 Plus Checking
With a minimum balance of $250, the monthly maintenance fee is waived and you get free standard checks and free paper statements. This is one of the rare checking accounts dedicated to seniors.
Other perks include:
- You can earn interest on your checking account.
- 24/7 fraud alerts.
- You can also invest in a CD as the account offers options.
Ally Bank
With an Ally account, you can connect your checking and savings accounts to access your funds under one umbrella. As everything is connected, you can also invest in CDs or other vehicles.
You don’t have to worry about any maintenance fees, and you can even utilize savings buckets to set aside funds for your various expenses.
Capital One 360 Performance Savings
This savings account is ideal for seniors because of the 4.35% APY and lack of fees. As a senior, you may be on a fixed income, so you want to ensure that you’re stretching your money.
The Takeaway
“Whatever bank you choose, you want it to be one that fits your lifestyle,” advised Lieberman. “If you travel a lot, you’ll want one with a lot of branches and low foreign transaction fees. If you don’t need to touch the money often, higher interest rates are worth prioritizing.”
As a retiree, the goal is to find the right accounts for your money so that you can feel confident about paying your bills and living your desired lifestyle.
