fbpx

Trust Bank Accounts

A detailed look at trust bank accounts in Australia, and how to compare the various types of accounts to find the best one

Written by 
Savvy Editorial Team
Savvy's content writing team are professionals with a wide and diverse range of industry experience and topic knowledge. We write across a broad spectrum of finance-related topics to provide our readers with informative resources to help them learn more about a certain area or enable them to decide on which product is best for their needs with careful comparison. Meet the team behind the operation here. Visit our authors page to meet Savvy's expert writing team, committed to delivering informative and engaging content to help you make informed financial decisions.
Our authors
, updated on July 31st, 2023       

Fact checked

At Savvy, we are committed to providing accurate information. Our content undergoes a rigorous process of fact-checking before it is published. Learn more about our editorial policy.

Compare bank accounts

Finding the best bank account can save you hundreds on fees and connect you with the very latest in smart banking technology.  Compare bank accounts from a wide variety of providers with Savvy to find the very best offers available on the market right now.

site-logos Up Everyday Account
  Monthly Account Fee Features Card Type ATM Fee Interest Rate  
site-logos $0
  • PayId,
  • Osko,
  • Samsung Pay,
  • Apple Pay,
  • Google Wallet,
Mastercard $0 0%
Go to site

Use invite code SAVVY10 for $10 upon successful sign-up. (Refer to offer T&Cs on Up website)

More details
site-logos ING Orange Everyday
  Monthly Account Fee Features Card Type ATM Fee Interest Rate  
site-logos $0
  • PayId,
  • Apple Pay,
  • Google Wallet,
Visa $0 0%
Read review

Rebates on ATM fees anywhere in Oz. No ING international transaction fees. Zero monthly fees.

More details
site-logos NAB Classic Banking Account
  Monthly Account Fee Features Card Type ATM Fee Interest Rate  
site-logos $0
  • PayId,
  • Samsung Pay,
  • Apple Pay,
  • Google Wallet,
Visa $0 0.01%
Read review

No monthly account fees ever, with no conditions. Free use at over 7,000 ATMs around Australia. No overdrawn fees if you happen to go over your account balance. Open an account in less than 7 minutes.

More details
site-logos St.George Complete Freedom Account
  Monthly Account Fee Features Card Type ATM Fee Interest Rate  
site-logos $0
  • Samsung Pay,
  • Apple Pay,
  • Google Wallet,
Visa $0 0%
Read review

Get $40 with a new Complete Freedom everyday bank account.

More details
site-logos Westpac Choice
  Monthly Account Fee Features Card Type ATM Fee Interest Rate  
site-logos $5
  • Samsung Pay,
  • Apple Pay,
  • Google Wallet,
Mastercard $0 $0
Read review

Westpac Choice for easy day-to-day banking

More details

Disclaimer: Savvy is not advising or recommending any particular product to you. We provide general information on products for the purposes of comparison, but your personal situation or goals are not considered here. Although we try to make our comparisons as thorough as possible, we do not have information on all products on the market on our site.

You should always consult a given offer's PDS or further documentation in the process of deciding on which loan to choose, as well as seeking independent, professional advice. If you decide to apply with one of the lenders listed above via our website, you will not be dealing with Savvy; any applications or enquiries will be conducted directly with the lender offering that product.

Trust bank accounts explained

Trusts are used for a variety of purposes in Australia, such as estate planning, property holding, superannuation and asset management.  Thousands of Australians use trusts for a variety of purposes, but one thing they all have in common is that they need a bank account.  Compare trust bank accounts, including their various key features, with Savvy to find the best one for your trust’s needs.

What are trust bank accounts?

Trust bank accounts are accounts which are set up to allow those administering a trust to manage the funds they’re responsible for. They can be everyday or savings accounts, term deposits or high-interest accounts.  Whatever type of account they are, though, they’re set up in the name of a trust, usually with a named trustee acting on behalf of its beneficiaries. For example, a trust bank account may be named ‘John Smith on behalf of the Smith Family Trust.’

A trust is not a separate legal entity like a company; rather, it’s an estate planning tool which holds money or assets on behalf of a person or family and is run to benefit a named person, persons or family.  Most of the major banks allow trustees to open any type of trust bank account they require, as generally no special features or provisions are required for a trust bank account.

However, the exception to this rule is Statutory Trust Accounts, which are used by real estate agents, solicitors, conveyancers, collection agents and lawyers to temporarily hold funds on behalf of their clients during real estate or motor vehicle transactions. These specialist bank accounts are designed to allow legal professionals to comply with complex legislation around holding funds for clients.  With Statutory Trust Accounts, there are no trust deeds required and no named beneficiaries.

Whatever type of trust is established, all trusts require bank accounts to enable them to pay their beneficiaries, distribute interest or otherwise carry out their business.  That’s why it’s important to compare as many options as possible before deciding on which is the best one, which you can do with Savvy.

How do I find and compare the best bank accounts for my trust?

First of all, decide what sort of transaction features you’re going to need.  Are you going to be paying other people for goods and services regularly?  If that’s the case, you’ll probably need a transaction account with a linked debit card to enable you to use BPAY, payWave and PayPass to pay other people, or to buy goods or services. 

If the fund’s purpose is to earn interest over a long period, compare high-interest savings accounts and term deposits to find out which option may best suit your needs.  Savvy can help you pick the right bank account for your trust by giving you clear bank account comparison information to help you make the best decision.

What types of trusts are there in Australia?

There are several different types of trust in Australia, all set up for specific purposes. Each trustee will need to decide which type of bank account is the most suitable for the particular trust fund being managed. The most common types of trust in Australia are:

Family trusts

These are discretionary trusts used to hold family assets or run a family business.  They’re called ‘discretionary trusts’ because the trustee can decide how much money each of the beneficiaries receives, meaning fund distribution is at the discretion of the trustee. Family trust bank accounts are the most common form of trust bank account in Australia and can be either transaction or savings accounts. 

Testamentary trusts

These are trusts set up under the terms of a deceased person’s will, which hold funds for a named beneficiary, and are valid for up to 80 years. For example, if a parent dies whilst their children are still young, a testamentary trust may be set up to hold the children’s inheritance in trust for them until they come of age.

Superannuation proceeds trust

When a person dies, that person’s remaining superannuation is paid to the beneficiaries who they nominated to receive their death benefit (which is the remainder of their superannuation).  This death benefit may be placed in a superannuation proceeds trust with a named beneficiary.  This can protect the super funds in several circumstances, such as:

  • the named beneficiary is still a minor and too young to manage their own affairs
  • to protect the funds from other claimants – such as a creditor, who is looking to claim funds from the deceased person’s estate
  • to protect the funds from other third parties or relatives who wish to gain access to the money to the detriment of the named beneficiary

Disability trusts

A special disability trust (SDT) can be set up to provide for the needs of a person who is severely disabled and unable to care for themselves. For example, if a seriously injured person receives compensation after a life-changing accident, that compensation may be placed in a SDT to care for the victim’s physical and medical needs.

Fixed trusts, or fixed unit trusts

These are trusts where the beneficiaries receive payment either at a fixed rate or in a fixed proportion depending on how fund distribution is described in the trust deeds.  For example, in a fixed housing trust, all property owners could receive equal benefits.  In a fixed unit trust, beneficiaries receive a set proportion of benefits depending on how many unit trusts they own or purchase.

Charitable trusts

These may be established to support a particular charity or organisation, with the interest earned given to various related beneficiaries each year.  For example, a Country Fire Service Charitable Trust may distribute the interest earned on the principal sum to a different CFS station each year, ensuring that all stations receive money on a rotating basis.

Trust jargon explained:

Beneficiary 

The person or persons who will benefit from the trust – the receiver of the fund’s money or benefits.

Executed

To carry out, perform, sign or complete a legal agreement. For example, you might say ‘the trust deed was executed on 07 March 2022’, which would mean the deed was signed and witnessed on that date.

In perpetuity

This means ‘forever’ or ‘for an indefinite period’ and is often used when setting up a charitable trust deed, giving benefits to a particular charity in perpetuity (with no end date).  

Settlement Sum

This is a nominal sum of money (often $1 or $10) which the settlor must pay to the trustee of a trust to officially establish it.  A formal receipt needs to be issued for the settlement sum so there’s proof the trust has been legally established.

Settlor

A trust’s settlor is usually someone unrelated to the beneficiaries (such as an accountant or lawyer), who must sign a trust deed and give the settlement sum to the trustee.

Trustee

This is the person whose job it is to look after the funds in the trust.  They’re obligated to administer the trust solely in accordance with the objectives stated in the trust deed.

Trust Deed

A trust deed is a legal document which specifies why the trust is being established, how it’s to be run and who the trustees and beneficiaries of the trust are.

Types of bank account

Why compare bank accounts with Savvy?

More of your frequently asked questions about trust bank accounts

Does a trust fund need a tax file number?

Yes – a trust fund is obligated by Australian taxation laws to have a tax file number, which will need to be quoted when tax returns are submitted.  

Can a trust have more than one bank account?

Yes – a trust can have as many bank accounts as it needs and may have several bank accounts for different purposes, such as a transaction account, a savings account, a trading account, an investment account and a term deposit.  

Do all beneficiaries of a trust have to have access to the trust bank account?

No – it’s often the case that beneficiaries of a trust do not have practical day-to-day access to the trust funds; rather, the fund is administered by the trustee and the beneficiaries receive the proceeds or profits of the fund but aren’t involved in the running of the trust.

What is the cost of setting up a trust in Australia?

The cost will vary depending on what state of Australia you live in and what sort of trust you want to set up.  This can either be a simple or a complex legal task, depending on the circumstances.  For a simple family trust, expect to pay a minimum of $800 in legal fees, rising to several thousand dollars for a complex and involved legal trust.

Do I have to pay stamp duty when I set up my trust?

You may have to pay stamp duty depending on which state of Australia you live in. Some states don’t charge stamp duty for the establishment of a trust, whilst others do.  The stamp duty varies from a nominal amount of $1 up to a maximum amount of $500 (which is the stamp duty on a trust charged in NSW).

Helpful guides on bank accounts

Bank Accounts Banner - Businessman sitting in an office with his laptop

Compare Business Bank Accounts

Compare bank accounts for business Finding the best bank account can save you hundreds on fees and connect you with...

Bank Accounts Banner - Man opening a bank account on his tablet while his partner lies on the couch behind him

Open a Bank Account

Compare bank accounts Finding the best bank account can save you hundreds on fees and connect you with the very...

Bank Accounts Banner - Woman sitting on the couch with her laptop while her partner points at the screen

Change Bank Accounts

Compare bank accounts Finding the best bank account can save you hundreds on fees and connect you with the very...

Bank Accounts Banner - Young couple comparing joint bank accounts on their tablet

Compare Joint Bank Accounts

Compare bank accounts Finding the best bank account can save you hundreds on fees and connect you with the very...

Bank Accounts Banner - Couple comparing joint bank accounts on their laptop and taking notes

Best Joint Bank Accounts

Compare joint bank accounts Finding the best bank account can save you hundreds on fees and connect you with the...

We'd love to chat, how can we help?

By clicking "Submit", you agree to be contacted by a Savvy broker and to receive communications from Savvy which you can unsubscribe from at any time. Read our Privacy Policy.