Look into high-yield savings accounts. Interest on savings accounts was once a great way for individuals to grow their money. But interest rates on standard, no-minimum-balance accounts are now so low that the growth in interest is negligible. However, individuals with sizable savings, such as seniors, can explore high-yield savings accounts. High-yield savings accounts offer much higher interest rates than standard accounts. The rules governing eligibility to open such accounts differ between financial institutions, but many mandate that account holders have high minimum balances, typically in the neighborhood of $250,000. So long as account holders maintain that minimum balance, they can accrue penalty-free interest without exposing their money to the risks of the market.
Consider other exclusive bank accounts. High-yield savings accounts are not the only way seniorsÕ banks may be able to help grow their money without necessarily taking on market-related risk. Products such as Chase Private Client CheckingSM offer exclusive perks, including a dedicated client advisor who can work with seniors as they navigate life changes, including retirement.
Consider low-risk investments. Risk aversion is not the same thing as risk avoidance. ItÕs wise for seniors to be averse to risk, but they can still consider low-risk investments like short-term bonds as a means to growing their money in retirement. Low-risk investments can be vulnerable to inflation, not unlike money sitting in a savings account. However, certain short-term bonds, such as Treasury Inflation-Protected Securities, are designed to mirror inflation, which makes them an option worthy of consideration for seniors who have been concerned by the ways inflation has affected their financial status in recent years. According to the Department of the Treasury, the principal of a TIPS can go up or down over its term. When the bond reaches maturity, if the principal is higher than the original amount, bond holders get the increased amount. If the principal is lower at maturity, bond holders still get the original amount.