Superannuation Savings Account

Learn how you can get the most out of your retirement nest egg by comparing your options with Savvy, including superannuation savings accounts.

Last updated on June 24th, 2022 at 12:24 pm by Kurtis Eichler

Compare and find the best superannuation savings account

Superannuation savings accounts let you tuck money away from your first day on the job to the day you hang up the tools for good. They also allow you to save for your golden years without the market volatility that comes with super funds.

These accounts haven’t vanished completely and are still offered by a select few financial institutions. With Savvy’s easy-to-use comparison information, you can find out more about the best options for your retirement savings.

How does a superannuation savings account work?

Superannuation savings accounts are essentially a hybrid of a super fund and a savings account. You can use this low-cost account to amass a nest egg while you’re working. From there, you can tap into the money the day you retire. The key benefit of these accounts is that your balance isn’t determined by movements in the market (beyond any changes in interest). As such, your balance can only go up.

These accounts were standard in the years before the Superannuation Guarantee came into effect in Australia in 1992. This guarantee meant 72% of the country’s workforce were able to open specialised super funds. Prior to this, government records show only about 32% of workers were covered by superannuation. Only a handful of credit unions, banks and building societies offer these accounts today because of their low rate of return. They’re also often only available to existing customers or require minimum balances of $10,000.

Both accounts only allow you to withdraw money when you’ve retired or reached preservation age. Employer and personal contributions are accepted on both accounts, with spouses also able to deposit. You can use Savvy’s online calculator to work out how much you need to regularly deposit to reach your retirement savings target.

Superannuation savings accounts typically come fee-free. This means you get to avoid monthly account fees and paper statement charges which could cost you up to $7 or $8 a month in total. This may not seem like a lot, but they could eat into your savings when added up over time. However, this depends on who you bank with, as it’s not unheard of for institutions to charge a $35 annual admin fee. By comparison, a super fund can come with fees for management, advice and administration. These are capped at 3% p.a. of your balance.

Should I have a regular super fund instead of a super savings account?

Both of these types of accounts have benefits, but ultimately your decision will come down to whether you value performance over protection or vice versa, as well as how involved you are in the investment of your funds.

Performance

A super fund can earn you up to 20% p.a. on your money, which is much higher than the interest offered on a savings account. Most savings account interest rates are relative to the rate of inflation so, in reality, your money may not be growing as much as you think. The added bonus of a super fund is that you’ll be taking advantage of long-term compounding interest. You can use Savvy’s savings calculator to simulate how your nest egg could grow with compound interest.

Protection

Super funds are subject to the rollercoaster ride of the share market. Professional investors pool your money with that of other members and reinvest it in a range of industries. Therefore, if the market is rising, your balance rises with it. Likewise, if the market suffers a downturn, your super balance will drop. However, downturns in the market are rarely permanent.

Savings accounts are low-risk investments which aren’t dictated by these forces. What you deposit stays in your account until you reach retirement age. Also, the government-backed Financial Claims Scheme provides a guarantee on balances up to $250,000 in the event your bank, credit union or building society crashes.

Involvement

Super funds let you have as much or as little involvement in how your funds are invested. You have two different options: a self-managed super fund (SMSF) or a professionally managed super fund. A SMSF gives you more involvement over investments at an increased level of risk, whereas a standard super fund comes with less involvement and less risk because your choices are controlled by experts. On the other hand, a superannuation savings account allows you to have full control with minimal risk.

Top tips for comparing super savings accounts

Find the best interest rate

A high rate on your savings account will allow you to achieve your goals faster than a low one. Comparing accounts side by side allows you to find and secure the best rate to fast-track your savings target. Additionally, you can use our savings calculator to assess how long it will take to reach your goal using different variables.

Use Savvy to compare deals

Opening a savings account is like buying a car: you have to do your homework before you settle on the one you like. That’s where Savvy comes in. We provide you with clear comparison information so you can compare and find the best retirement savings account on the market.

Check out the fees

Opting for a high interest, low-fee account will avoid the interest you’re earning from being eaten away by unnecessary charges and costs. Balance these out and make sure your savings growth isn’t counterproductive.

Access to your funds

While you won’t be able to touch your funds until you’re ready to farewell your working life, comparing will ensure you find an institution which allows you to easily track your balance and monitor progress via internet banking or a mobile app.

Common super savings account questions

What happens to my account when I reach retirement age?

Preservation age is generally between 55 and 60 depending on who you open an account with. You can choose to keep your account open or opt for an easy-access fund such as a pensioner savings account. This type of account is a hybrid savings and transaction account tailored to older people who collect the aged or Veterans’ pension.

Who can apply to open a superannuation savings account?

If you’re an Australian resident and aged over 18, you can open an account. If you’re under 18, you’ll need to apply at a branch with a parent or guardian.

What forms of ID are acceptable when opening an account?

You can submit the following when opening a savings account:

  • A current state or territory-issued driver’s licence
  • An Australian or foreign-issued passport
  • A government-issued Proof of Age card
  • A government-issued travel document or identity card
  • A Medicare card
What sort of tax advantages do I get with this type of account?

You get the same tax benefits on this account as you would a super fund, including salary sacrificing and spousal contributions. However, you earn interest on your whole balance, not just your tax-free portion.

Can I consolidate multiple super funds into one account?

Yes – this can help you keep a better track of your funds. You can get a higher return because you’ll have a larger sum of funds. Rolling over your super funds is as simple as making a request with your current super provider, completing a transfer authority form and sending it to your desired institution.