Savings & bank accounts for pensioners

There are savings and bank accounts for people under 30, and there are savings and bank accounts designed specifically for seniors. If you’re over 55 years old, or you’re receiving a government pension, opening a pensioner savings account may be an option to consider.

While a pensioner savings account is pretty similar to your standard savings account, there are a few key differences that you should know about. However, you may still end up being better off with a regular savings and bank account combo.

What is a pensioner savings account?

Pensioner savings accounts are designed for over 55s or people on the government pension. This means in order to open a pensioner bank account, you need to be over 55 years old or receiving the pension, such as the Age Pension. You can still keep or open a regular savings account and bank account if you’re over 55 or receiving a pension.

Pensioner bank accounts are designed to be simple and easy to use. Unlike most savings accounts, where you need to open a linked transaction account to access your money, pensioner accounts are often two-in-one. You will usually have unlimited access to the money in your account with a linked debit card and bill pay. This means you won’t need to transfer money from your savings account to your spending account.

What’s the difference between a pensioner account and an everyday account?

A key difference between pensioner savings accounts and your everyday, run-of-the-mill savings account is how many accounts you need. With a pensioner savings account, you have a spending and savings account all wrapped up in one, while most other bank accounts require you to have separate savings and spending accounts, with a debit card attached only to your spending account.

Another distinction is that is that you usually have to be over 55 years old or receiving a government pension to open a pensioner savings account. You’ll need to have a look at the eligibility criteria to make sure you’re good to go.

The interest rate structure of a pensioner bank account can also be different. For example, you may have a tiered structure, such as 0.25% p.a. for balances less than $50,000 and 0.50% p.a. for balances over $50,000. This means the more money sitting in your account, the more interest you’ll earn. Notably, pensioner bank accounts can often come with lower interest rates than your standard bank account, which could be a turn-off.

Who offers pensioner accounts?

There are a number of banks that offer pensioner bank accounts. The big four banks also offer pensioner/ seniors savings accounts, or products/services specifically for older Australians. For example, while ANZ doesn’t specifically offer a ‘seniors savings account’, customers over 60 years old can have their monthly account service fee waived on one nominated ANZ Access Advantage account. On the other hand, Westpac offers a ‘Westpac 55+ and Retired’ everyday account for retirees who are over 55 years old.

As you may have gathered, pensioner savings accounts can vary from bank to bank. It’s best to check in with your specific bank or do some research to find an account that suits your preferences.

Pros and cons of pensioner bank accounts

There are some considerations to make before opening a savings account specifically tailored to seniors or pensioners.

Pros

• Flexibility: You don’t need to stress about transferring money from one account to another, or making sure you have enough money in your transaction account for bills to automatically come out. All your money is in one place, easily accessible, which can make life easier.

• Waived fees: Some banks waive any account keeping fees if you’re opening a pensioner or seniors bank account. Be sure to check with your bank to see if this applies.

• Earn interest: If you don’t want the hassle of constantly setting up term deposits to earn interest, having your money sitting in a pensioner bank account can be helpful. While it may not be as much interest as you could find elsewhere, you won’t need to stress about moving money around or keeping track of term deposit end dates.

Cons

• Less choice: While the big four banks and a number of other banks offer pensioner bank accounts (or at least pensioner-geared products), not every single bank does. You may find your current bank doesn’t offer a seniors bank account. Be sure to do your research to find a suitable bank account for you, or if sticking to your regular bank account works best.

• Lower interest rate: Due to the nature of pensioner bank accounts, they don’t typically offer bonus interest. Bonus interest can be earned on certain bank accounts when you make a certain number of transactions each month and/or increase your bank balance by $XX.

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