Fact checked
Term deposits are a sensible choice for self-managed super fund (SMSF) managers wanting the highest interest rates for their investments. The interest rate you receive on your SMSF term deposit can mean the difference of thousands of dollars a year, so for this reason it’s vitally important to find the very best interest rates available to SMSFs.
Savvy compares term deposits with best interest rates from a variety of financial institutions so you can find the most competitive deals available. Start comparing your options with Savvy today!
Rabobank 1 Year Term Deposit |
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Start with as little as $1,000 and get your interest paid monthly, quarterly, half-yearly or yearly. Receive a 0.10% loyalty bonus when you automatically reinvest your Term Deposit before maturityMore details |
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$0 Set up and no ongoing account-keeping fees. Interest rate depends on balance amount. Optional 3,6,9 or 12 month terms. Balances from $10,000.More details |
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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.
Term deposits are an agreement between a SMSF and a bank or financial institution to lock away a set sum for an agreed period. In return, they pay a fixed rate of interest, which is typically a higher rate than can be achieved through a high-interest savings account. During the deposit period, the funds can’t be accessed or withdrawn (unless substantial penalties are paid in most cases). At the end of the term, the funds can either be withdrawn, transferred to another bank account or reinvested into another deposit term. Banks require a period of notice to be given if the funds are to be withdrawn, which is typically one month or 31 days.
Term deposits offer a passive and safe way to invest your SMSF cash and earn an income stream. They’re an investment option which often forms one part of a larger investment strategy that aims to grow wealth and provide an income stream for the owners in retirement. They provide a safe, fixed rate of return which can be relied on to produce a known return on investment. To work out how much your funds could earn in a high-interest term deposit, you use Savvy’s term deposit calculator to help you with your calculations.
The financial institutions which offer this product usually house them under the business finance umbrella, so you may need to talk to a business account manager if you’re looking to compare term deposits for your SMSF. These are the factors you should compare when considering your options with Savvy:
The interest rate offered for term deposits varies widely. Naturally, the higher the interest rate, the better. Many financial institutions offer a tiered level of interest, with a set interest rate for the first $250,000 deposited and another (often lower) rate for deposits in excess of this. Naturally, the rate offered also depends on the period over which you choose to deposit your funds, with higher rates for longer terms.
In June 2022, the best high interest term deposit rates can be found with AMP Bank and Rabobank. AMP currently leads the way, offering a maximum of 4.15% p.a. for a five-year term on balances from $25,000 to $1 million. Rabobank term deposits are currently offered at up to 3.50% p.a. for the same term.
There are often conditions imposed on SMSF term deposits, such as minimum deposit limits. For example, some funds have a minimum deposit of $5,000, while others could raise it as high as $25,000, so you should consider these limits.
Some funds are limited to a maximum cap of $250,000 up to $5 million for certain interest rate terms, or they offer a lower interest rate over a set amount, so it’s important to compare to find an institution that can accommodate the size of your large deposit.
These vary from one month right up to five years, so when you’re considering which bank to invest with, make sure they offer the term you’re after.
Luckily, fees for SMSF term deposits are rare, so you shouldn’t be paying any fees or charges. However, different providers will have different penalty fees for early access, which can reach up to 90% of the interest you would’ve earned or flat fees of around $30 to $50.
Some institutions offer an incentive (such as a small bonus interest rate) to roll over your funds at the maturation of your term, so keep an eye out for these special offers.
You can choose to receive your interest monthly, quarterly, annually or at maturity. Consider the effects of compounding very carefully before deciding which interest option to choose.
Most financial institutions require you to apply for a SMSF term deposit through a business account manager, so an initial phone call asking to speak to a business manager should be your first step to gain further information. Some financial institutions have a limit on the number of trustees or beneficiaries permitted (for instance, limited to only two trustees), so these details are worth checking before you start applying.
To open a term deposit on behalf of your SMSF, you’ll need to provide full details of the structure of the fund, who its trustees and beneficiaries are and who’ll have the authority to make decisions about the term deposit.
Some of the documents you may need to provide include:
You won't have to pay a cent to compare term deposits with us, with free comparisons available 24/7.
There's no need for you to worry about visiting any banks, as you can compare term deposits and open one online.
We're partnered with trusted financial institutions around Australia to help you choose the best option with confidence.
In general, online banks, credit unions and building societies offer higher interest rates on term deposits than the big four or larger banks do.
The higher the sum you’re able to deposit, the more interest you’ll earn. If deposit limits are imposed, it’s always possible to take out term deposits with more than one institution.
Special offers pop up from time to time designed to attract new clients and gain new business. Such offers frequently offer a higher rate of interest for a set period, so it’s well worth keeping an eye out for them.
If you’re in an environment where interest rates are rising, it may be worth considering shorter-term investment options rather than committing your SMSF to a long-term deposit in an environment of rising interest rates.
As interest rates are constantly changing, it’s worth checking back with Savvy regularly to get the latest interest rate comparison information, and to check you’re getting the very best deal for your SMSF. Start comparing term deposits with Savvy today.
Quantum Savvy Pty Ltd (ABN 78 660 493 194) trades as Savvy and operates as an Authorised Credit Representative 541339 of Australian Credit Licence 414426 (AFAS Group Pty Ltd, ABN 12 134 138 686). We are one of Australia’s leading financial comparison sites and have been helping Australians make savvy decisions when it comes to their money for over a decade.
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© Copyright 2024 Quantum Savvy Pty Ltd T/as Savvy. All Rights Reserved.
© Copyright 2024 Quantum Savvy Pty Ltd T/as Savvy. All Rights Reserved.
Quantum Savvy Pty Ltd (ABN 78 660 493 194) trades as Savvy and operates as an Authorised Credit Representative 541339 of Australian Credit Licence 414426 (AFAS Group Pty Ltd, ABN 12 134 138 686). We are one of Australia’s leading financial comparison sites and have been helping Australians make savvy decisions when it comes to their money for over a decade.
We’re partnered with lenders, insurers and other financial institutions who compensate us for business initiated through our website. We earn a commission each time a customer chooses or buys a product advertised on our site, which you can find out more about here, as well as in our credit guide for asset finance. It’s also crucial to read the terms and conditions, Product Disclosure Statement (PDS) or credit guide of our partners before signing up for your chosen product. However, the compensation we receive doesn’t impact the content written and published on our website, as our writing team exercises full editorial independence.
For more information about us and how we conduct our business, you can read our privacy policy and terms of use.
