SMSF Operating Bank Account

A SMSF should have a main operating bank account.

Some SMSF bank accounts offer online access only. This can be a problem if the SMSF Trustees want to deposit a Cheque in the SMSF bank account. Online-only bank accounts generally offer fee free banking and high interest rates. Examples are U Bank and Rabo Direct Bank, both offering SMSF bank accounts.

When rolling over funds from a retail fund to a SMSF, the retail funds only give paper cheques. No retail fund offers electronic transfers. It is therefore important to have an account that accommodates manual Cheque deposits.

SMSF Investment account or Term deposit

Superannuation Warehouse recently did a survey on the importance of bank fixed term deposits for SMSF’s. 63% of respondents prefer the majority of assets to be in a bank fixed term deposit.

Retail funds generally pay a low interest rate for cash holdings. With a SMSF you can choose any bank for the SMSF fixed term deposits. Interest rates are currently around 7%. The advantages of a fixed term deposit are:
- government guaranteed capital
- generally better interest rates at a bank compared to a retail superannuation fund
- safe option for capital protection, especially if Beneficiaries are close to retirement.

The advantage of a SMSF is that Trustees can shop around in the market to get the most suitable product for their SMSF.