Alliance & Leicester (A&L) is the latest institution to target “silver savers” with an account paying eye-catching 7% rate.

Premier 50, a packaged account, will charge the overfifties a monthly £10 fee and in return savers will get annual travel insurance and limited private medical cover.

Though savers are usually told to avoid packaged accounts, as it is not worth paying for the “perks”, Mike Naylor at Uswitch, a comparison site, said: “As many older people struggle to find competitive travel-insurance deals, the annual worldwide policy for people up to the age of 79 is a worthwhile benefit.”

The account pays for two out-patient private medical consultations and up to £750 for tests.

There are downsides. The 7% rate only applies for just over a year. From January 2009, customers will receive one percentage point below Bank rate, a pay rate of 4.75% today.

Customers who spend more than 31 days out of the country per trip have to pay extra – £15.20 for a couple for 45 days of cover.

Savers are warned not to be fooled by the boast of zero interest charges on authorised overdrafts.

After the first 12 months there is a daily fee of 50p, up to a maximum of £5 a month.

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