Pensioner Savings Accounts

Get the best savings account for your golden years by comparing pensioner funds with Savvy.

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, updated on July 28th, 2023       

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Are you looking to grow your savings?  Compare a wide range of savings accounts with Savvy so you find the best deal in Australia and the highest interest rate to help grow your savings.  

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Rabobank’s High Interest Savings Account helps grow your savings while offering flexibility and easy access to your money.

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Use invite code SAVVY10 for $10 upon successful sign-up. (Refer to offer T&Cs on Up website)

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Compare pensioner savings accounts

Living out your twilight years should be hassle-free, whether it involves spending more time with the grandkids or doing a spot of travelling. To make your retirement savings go further, it’s important to find the best savings account for your money.

Banks offer flexible accounts tailored to pensioners and comparing with Savvy can help you find one that works best for you. Learn how to find an account with the best mix of variables by reading our in-depth guide.

What is a pensioner savings account?

Tailored to senior Australians who have hit retirement age, a pensioner savings account is effectively a hybrid of a savings and transaction account. A select few financial institutions offer these accounts, which are only available to those receiving a government pension. The key difference with these accounts is that while a savings account encourages you to save and not withdraw funds, this account allows you to spend freely without it impacting your interest rate.

When you’re comparing with Savvy to find the best place to house your funds, it’s also worth considering regular savings accounts. These can be more suitable if you’re not earning a pension once you retire, such as if you have a significant amount in savings or are continuing to earn an income via super or investments. You won’t get the luxury of easy access to your money, but they will enable you to earn much higher interest on your money.

While these options are geared towards retirees, some institutions still offer retirement savings accounts for those wanting to build a nest egg while they are working. These accounts are low-risk alternatives to super funds, with their performance determined by interest rates rather than the stock market. These accounts, also called superannuation savings accounts, typically have a much lower rate of return than a super fund and aren’t offered by many banks.

What variables should I compare on pensioner savings accounts?

Finding the best savings account for your hard-earned dollars will come down to comparing individual variables, which you can do right here with Savvy. Pensioner savings accounts have a range of unique factors, including:

Interest rates

Savings growth comes down to the interest rate you receive on your account. The higher your rate, the faster your balance will grow. While interest rates tend to vary across pensioner savings accounts, shopping around will allow you to sniff out the best one on the market.

Unlimited access

One of the benefits of this type of account is that you can access your money whenever and however you like. Tapping into your funds won’t impact your interest rate, unlike savings accounts. That being said, it’s still worth comparing between funds to double-check the one you want to open doesn’t have any withdrawal limits in place.

How interest is calculated

Tiered interest is a staple of these types of accounts. This is a little different from the way interest is calculated on a savings account. Tiered interest essentially means the more you have in your account, the higher your interest rate. For example, if your balance was under $10,000, a bank may pay interest at 0.05% p.a. However, if your balance was more than $249,000, you could earn 0.25% p.a. Different banks will have different benchmarks and accompanying rates, so it’s important to compare to find the best set. You can also use Savvy’s online budget planner to help you reach a savings target.

Fees

Pensioner savings accounts generally come with no monthly fees. As such, you’re saving up to $5 per month on account keeping costs. However, because they operate in part as a bank account, you can be charged overdraw fees up to $15. Run your eyes over these hidden costs and try to find the cheapest account.

Extra features

Because these savings accounts come with the added benefit of allowing you to spend, they come with a range of special features. These include Apple Pay, the ability to temporarily lock your card if you lose it and 24/7 fraud monitoring. You’ll also be able to pay bills and withdraw money from select ATMs using your linked debit card.

Types of savings account

Why compare savings accounts with Savvy?

Pros and cons of pensioner savings accounts

PROS

Easy access to your money

You can tap into your funds wherever you are using online, mobile or telephone banking. These accounts don’t have withdrawal restrictions or monthly requirements, so you’re free to access your money 24/7.

Ability to earn interest

You can spend and still earn a return on your money. That’s because, unlike standard savings accounts, spending your money using this type of fund doesn’t come at the cost of your interest rate. You can calculate the interest you could earn using Savvy’s savings calculator.

No monthly fees

These accounts are typically fee-free, meaning you avoid having to pay the steep monthly fees, such as $5 charges for account keeping, which usually come with savings accounts.

Access to a debit card

There’s no need to set up an adjoining linked bank account; you get direct access to your cash with a debit card. You’re also able to make purchases and withdraw money using your debit card without the hassle of additional fees.

CONS

No bonus interest

You won’t be able to earn bonus high interest with this account, potentially costing you a higher rate of return.

Harder to find

Pensioner savings accounts tend to be as rare as hen’s teeth, with not all institutions offering them. While they may have some benefits, your options when shopping around can be restrictive.

Frequently asked pensioner savings account questions

How do I open a pensioner savings account?

This process is no different from opening a standard savings account, except you must be over 55 years old, or at least 18 years old and collecting a government pension. You must be an Australian resident, for tax purposes, and provide two documents that prove your identity. These can include a driver’s licence, passport or utility bill.

What government pensions are acceptable?

The following government pensions or allowances are eligible:

  • Aged pension
  • Carer’s pension
  • Disability support pension
  • Veteran’s pension
  • Widow’s pension
How do I calculate tax on the interest I earn?

Interest earned on these savings accounts is subject to a set of rules known as ‘deeming’. This calculates tax based on the interest the government deems you earned on your assets, regardless of what you were actually paid. If you earn more than the deemed rates, the extra doesn’t count as income. The deeming rates as of May 2022 are:

Singles: The first $53,600 of your assets has a deemed interest rate of 0.25% p.a. Anything more than this is deemed to earn 2.25% p.a.

Couples, one pension: The first $89,000 of your combined finances has a deemed interest rate of 0.25% p.a. Anything more than this is deemed to earn 2.25% p.a.

Couples, no pension: The first $44,500 of your finances has a deemed interest rate of 0.25% p.a. with anything more deemed to earn 2.25% p.a.

Can I open a joint pensioner savings account?

Yes – you can open a joint savings account. Some banks limit joint pensioner savings accounts to no more than two account holders. A joint account has the benefit of allowing couples to have shared access to one pool of money. Consider whether you need ‘one to sign’ or ‘both to sign’ access over the account, and discuss what happens if you need to close it unexpectedly. You’re likely to find it easier to open a standard savings account jointly.

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