Manage your own super? Pocket thousands more with a savings account from a challenger bank
Self-managed super fund (SMSF) investors have been urged to shop around when it comes to SMSF savings and term deposit accounts, with new research showing a difference of up to 1.40% in interest rates between accounts.
The research, that was performed as part of our annual Mozo Experts Choice Deposit Awards, found that challenger banks were often the best choice for investors with higher interest rates potentially adding up to thousands of dollars of difference in savings.
“Whether you’ve got $5,000 or $250,000 in cash to invest, don’t think that there is some kind of trade off between a lower interest rate and big bank safety,” said Andrew Duncanson, Mozo’s Data Insights Director.
“All deposit taking institutions compared for our awards are covered under the government’s deposit guarantee scheme. We urge you to shop around and get the best rate you can.”
The research compared 27 different SMSF savings accounts, finding a 1.40% difference between the highest and lowest unconditional savings interest rates which, on a $200,000 balance, would equate to a difference of $2,834 in interest each year.
“Overtime, that’s going to be a big difference to the fund’s balance and your life in retirement,” said Duncanson.
There was a similar disparity when comparing the 31 term deposits analysed for the Experts Choice Awards, with a 1.15% difference in interest rates between the highest and lowest accounts for a 5-year term.
On a $200,000 investment that contrast would result in a significant difference of $11,500 in interest over the five years.
Challenger bank RaboDirect cleaned up in the Mozo Experts Choice Deposit Awards for 2017, winning four awards including SMSF Savings Bank of the Year.
Rival challenger ME also performed well, taking out SMSF No Strings Savings and SMSF Term Deposit awards.
“SMSFs are designed so that you can choose your investment options and the Mozo Experts Choice Awards identify the accounts that have delivered the best value in the Market,” said Duncanson.
Managing your own super but not sure if you’re saving the most you could for retirement? Don’t settle for less, compare the best SMSF term deposits and savings accounts on the market.