The 7 savings accounts savvy over-50s are using instead of ISAs

Cash ISAs have had a temporary reprieve, now that chancellor Rachel Reeves has backtracked on plans to cut the annual cash ISA allowance.

But if you’ve already filled your ISA for this year, or if you’re wondering if there are better places for your money, there are plenty of other options out there.

We’ll explore 7 ways that you can grow your money with low (or no) risk.

What’s on this page?

Fixed-rate bonds
Notice accounts
Premium Bonds
Government bonds (gilts)
Investment bonds
Diversified investment funds
Money market funds
How to diversify your savings

1. Fixed-rate bonds

As the name suggests, fixed-rate savings reward you with a set rate of interest when you lock your money away. Some of the best currently pay around 4.40% interest, according to comparison website Moneyfactscompare.

They’re sometimes called fixed-rate bonds, but don’t let that confuse you – it’s just a savings account. The main thing to know is that you won’t be able to get your money until the end of the term.

The interest is taxed, although most people can earn up to £1,000 per year tax-free with their personal savings allowance (PSA). It’s worth checking when the interest is paid on the account, in case that affects your tax liability.

There’s a huge number of accounts on offer, fixed for different lengths of time.

As long as it’s a UK-authorised bank, building society or credit union, your money is protected by the Financial Services Compensation Scheme up to £85,000 per person per institution.

Rachel Springall, finance expert at Moneyfactscompare, says fixed-rate bonds provide peace of mind to savers who are concerned interest rates are likely to fall in the coming months.

“As it stands, challenger banks are offering attractive returns, and it would be unwise to overlook them when they have the same protections in place as a high street bank.”

2. Notice accounts

If you’re happy not having instant access to your savings, but also don’t want to lock your money away for a year or longer, a notice account could work.

Different accounts will have different notice periods, which can vary between 14 and 95 days, or sometimes longer. Often you’ll earn higher interest than an easy-access savings account.

The top rates on offer are currently around 4.50%, but interest is not always fixed. It may be linked to the Bank of England base rate, so it may go up or down.

Springall adds that variable-rate accounts “can be more suited to savers who are more hands-on with their accounts, as vigilance is key to ensure their pot is incurring a decent return.”

Again, as long as it’s a UK-authorised bank, building society or credit union, your money is protected by the Financial Services Compensation Scheme up to £85,000 per person per institution.

3. Premium Bonds

Premium Bonds are issued by National Savings & Investments. Tax-free cash prizes are paid to winning holders each month.

You can hold up to £50,000 in Premium Bonds. The prize rate is 3.6% (from August 2025), but most people don’t actually win that much - because a small number of big prizes means most people win less.

The odds of winning in the monthly prize draw are 22,000 to every £1 and the minimum amount to pay in is £25.

Premium Bonds are often seen as very safe, because they’re backed by the government. But in reality the Financial Services Compensation Scheme guarantee means that your money is just as safe (up to £85,000 per institution, though that could rise) in any authorised UK bank, building society or credit union.

If you’ve already filled up your ISA, the fact that premium bonds are tax-free makes them worth considering. But for most people there will be more effective ways to grow your money.

We outline the pros and cons of Premium Bonds here.

Womans hand with a gold ring on her middle finger putting a coin in to a piggy bank — Image credit: Shutterstock / NAOWARAT

4. Government bonds (gilts)

Gilts are bonds issued by the UK government and the money is used by the government for public spending. Gilts are seen as low-risk, because the government has never defaulted on payments. The main potential issue is that if you need to sell the gilt early, before it matures, it’s possible you might get back less than you paid.

For higher-rate taxpayers, gilts can be an attractive investment because they are exempt from capital gains tax (CGT). Investors also favour them for a reliable income, because you can often choose between annual, semi-annual or quarterly interest.

The yield on a gilt is made up of two parts:

1. The ‘coupon’, which is the fixed interest paid regularly by the gilt (subject to income tax, although interest earned on gilts is eligible for your tax-free Personal Savings Allowance, which is £1,000 a year in total)

2. The capital return, which is the gain (or loss) if after the gilt matures (this is tax-free)

Jason Hollands, managing director at wealth manager Evelyn Partners, says that when choosing a gilt, it’s important to look at the net-of-tax yield. This is the effective return after accounting for both the interest paid (the coupon) and the tax-exempt capital gain.

“A gilt with a low interest coupon, but where a high proportion of the yield will come from a tax-exempt capital gain at maturity, could be much more attractive after tax than one with a seemingly higher total yield but where most of this will be exposed to tax on the coupon,” Hollands explains.

Most people buy gilts through a stockbroker or investment platform. Bear in mind you’ll also pay platform fees, which will depend on the platform you choose.

Read more about how to choose an investment platform.

5. Investment bonds

Bonds are considered a relatively low-risk way of investing. The bond relates to the debt of a government, organisation or company, and anyone buying a bond is effectively lending money to the organisation. This is different to shares, where the shareholder owns a slice of the company.

Bonds are seen as low risk because as long as the organisation has enough money to repay the loan, they should get their money back plus interest. Susannah Streeter, head of money and markets for Hargreaves Lansdown, explains: “Profits could halve, ordinary dividends could be slashed but, as long as the company can meet its obligations to bondholders, they should continue to receive a fixed rate of interest and their capital back at redemption."

“In the event of bankruptcy, bondholders are ranked above shareholders in their claim on the company's assets. However, if the company can't meet its obligations to bondholders, their capital and income is at risk.”

6. Diversified investment funds

Investment funds allow you to pool your money with other investors, with a fund manager picking the investments on your behalf.

As someone else is looking after the fund and managing it, there are management fees to pay in return for not having to do the work yourself.

You’ll also need to choose between a fund focused on income, which will pay you a regular amount in cash, or one based on accumulation, where income is reinvested in the fund.

Learn more about building a diversified investment portfolio.

7. Money market funds

Money market funds are considered low-risk investments that usually provide a slightly higher rate of interest than standard cash savings accounts.

Money market funds invest in a combination of different assets including government bonds, corporate bonds, or cash.

As with any investment, there is some level of risk attached, unlike a cash savings account. The risk is usually reduced by the funds using high quality companies with good credit ratings and low default levels.   

Bonus tip: Keep cash in a stocks and shares ISA

Another option to consider is a stocks and shares ISA that pays interest on uninvested cash. It sounds strange, but it can be worth it. Some investment platforms pay a competitive interest rate on uninvested cash, to encourage you to shift money into them.

Different platforms pay quite different rates, so check out the rate before deciding to take this route. This method can also make it simpler for you to drip-feed money into investments, if that's what you want to do.

In most cases uninvested cash held in a stocks and shares ISA will be covered by the Financial Services Compensation Scheme. Check with your provider if you're not sure.

Learn more about money market funds.

How to diversify your savings

Keeping your money in a variety of different accounts and assets is the best way to make sure it’s diversified.

Plan your savings goals, identifying short- and long-term options such as a retirement fund, long holiday, or money to gift to grandchildren.
Decide when you will want to access your money, either at maturity or as a regular income.
Choose fixed-rate accounts for different savings goals. One for a retirement income, one for short-term spending, for example.
Spread out your risk with a variety of different assets such as government bonds, funds and cash.
Regularly check the interest rate on savings accounts and bonds. Don’t leave your money lingering somewhere if it’s not performing as expected.