SMSF Term Deposits

All you need to know about SMSF term deposits and how to compare them to find the best deal for your funds.

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, updated on September 11th, 2023       

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Compare SMSF term deposits

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!

site-logos Citi Term Deposit
  Maximum rate Interest rate Minimum deposit Government guarantee  
site-logos 5.05%
1 Year
1.25% $10,000 Yes
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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.

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More about SMSF term deposits

What are SMSF term deposits and how do they work?

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  During the deposit period, the funds can’t be accessed or withdrawn (unless substantial penalties are paid in most cases).  At the end of the term, the funds can either be withdrawn, transferred to another bank account or reinvested into another deposit term.  Banks require a period of notice to be given if the funds are to be withdrawn, which is typically one month or 31 days.

Why should I consider a term deposit for my SMSF?

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.

How do I compare SMSF term deposits?

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:

  • Interest rate:

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.

  • Minimum deposits:

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.

  • Maximum deposits:

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.

  • Terms on offer:

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.

  • Fees:

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.

  • Automatic rollover:

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.

  • Interest payment frequency:

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.

How do I open a SMSF term deposit and what documents will I need?

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:

  • full name, address, date of birth and contact details for all trustees of the fund
  • full details of all beneficiaries
  • details of the trustees who will have authority to operate the account
  • a copy of the SMSF Trust Deed
  • the fund’s tax file number or tax exemption number

Why compare term deposits with Savvy?

How do I maximise my SMSF’s term deposit interest?

More of your frequently asked questions about SMSF term deposits

Do all banks offer SMSF term deposits?

No – many financial institutions concentrate on retail products for the general public, so not all banks and credit unions offer term deposits to SMSFs. However, Savvy compares term deposits for SMSFs from many different financial institutions to help you find a deal which is just right for your fund.

Are SMSF term deposits low-risk?

Yes – SMSF term deposits are considered a very safe investment option due to the Australian Government’s Financial Claims Scheme (FCS).  This guarantees deposits with authorised deposit-taking institutions (ADIs) up to a maximum of $250,000 per person per ADI.  Most banks, building societies and credit unions in Australia are ADIs, so are covered by this government guarantee in the highly unlikely event that a financial institution goes bankrupt. 

Is it better to opt for a shorter term deposit?

It may be better to opt for a shorter term deposit in a climate of rising interest rates or if you’re unsure of whether you’ll need your funds down the line.  Savvy can help you find the best short-term deposit rates by comparing rates from a wide variety of institutions, some of which you may not even know exist in Australia.

Are ten-year term deposits available?

No – currently, ten-year term deposits aren’t being directly offered by Australian financial institutions, with most limiting their products to a five-year range.  However, institutions specialising in providing long-term investment options to superannuation funds do offer investment products for this longer-term range.

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