A reader’s grandfather has around £30,000 to save – but only wants to be tied in from year to year and no longer.
Andy McKechnie, head of sales and marketing for savings at Halifax, tackles the problem.
Kevin from Stockton on Tees asks:
My dad is 90, he has £30-35,000 to save.
He likes to put it into an account for 12 months at a time, what is the best possible rate he will get and from what kind of account?
There is no chance he will need access to it within that 12 month period.
If you are happy to set aside your dad’s savings for a set period of time and don’t require any access, then a fixed rate savings account should offer him the highest interest rate (AER).
He can choose the term which suits him best, such as 12 months, but he may benefit from fixing his interest rate for a longer period. For example, stepped interest rate accounts let you fix your savings for a set period but the interest rate increases each year.
You should ensure your dad is using his ISA allowance to make the most of his tax free savings as there are some good rates available for fixed rate ISA’s too.
It is also worth considering a fixed rate account which offers limited withdrawals as if there was an emergency and your dad needed to withdraw some funds he wouldn’t lose out on interest.
The interest rate may be slightly lower than fixed rate accounts which don’t allow withdrawals but there’s the peace of mind of having access to his money if needed.
I’d recommend speaking to a personal financial advisor to discuss your dads options further.
If you have a question for Andy, go to the myfinances.co.uk Ask the Savings Expert section.
Or for more information on your savings options go to savings at Halifax
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