SMSF Operating Bank Account
An 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. Popular bank accounts for SMSFs are Macquarie CMA (our preference), U Bank , Rabo Direct Bank and the big 4 banks.
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 has recently done a survey on the importance of bank fixed term deposits for SMSFs. 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 an SMSF you can choose any bank for the SMSF fixed term deposits. Interest rates are currently around 3%. The advantages of a fixed term deposit are:
- government guaranteed capital & savings
- 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
Operating bank accounts vs. Term deposit account
The typical set-up is to have an operating account (or main SMSF savings account) for your SMSF. Additional to this, have a term deposit account. Different banks and credit unions offer various promotions with varying interest rates.
Say your main account is with Macquarie CMA and you want to invest in HSBC for 6 months at a fixed interest rate. The bulk of your funds are then transferred from Macquarie to HSBC and invested for 6 months. When this investment matures, the money reverts to the operating bank account. Remember to have all bank accounts in the name of the SMSF, not your personal name. To see who can certify a Deed when you open up a bank account. follow this link.