Savings accounts for SMSFs and how they work

What is an SMSF?

Let's start at the beginning. An SMSF (self-managed superannuation fund) is a private super fund that you manage yourself rather than outsourcing to a superannuation provider.

It can have up to six members who are all either individual trustees or directors of a corporate trustee. All are equally responsible for decisions made about the fund and the fund's compliance. Trustees should follow an investment strategy that isn't overly risky and will meet the members' retirement needs, as well as organise insurance for fund members and keep comprehensive records for audits.

See also: A step-by-step guide to setting up an SMSF

SMSFs appeal to those that want greater control over their super and their contributions, particularly in deciding where and how their retirement funds are invested. But SMSFs can be a huge responsibility, requiring time and effort to run them, and can be quite expensive given that they typically require you to hire financial professionals for assistance.

See also: Is a self-managed super fund right for you?

What is an SMSF savings account?

An SMSF savings account can be a bank account specifically designed for self-managed super funds - or sometimes a business or investment account that's suitable for use by SMSFs. It's typically used to hold the cash assets of the fund and should earn interest.

The latest data from the Australian Tax Office indicates cash is the second-most popular asset held in SMSFs in terms of value, at over $161 billion. The most popular is listed shares at over $277 billion. With that much cash in play, it's pertinent that SMSF trustees have a good savings product to store their hard-earned dollars.

While some SMSFs may choose to hold their cash in specialist SMSF term deposits, it's wise for all SMSFs to have a main operating bank account from which to make transactions and store cash until it's needed for other purposes. But transaction accounts are notorious for offering no, or very low, interest rates. That's where a dedicated SMSF savings account can come into play. It can offer an accessible place to park money while earning a decent interest rate, thus boosting the fund's coffers at the same time.

Features of a good SMSF savings account should include a competitive interest rate, flexible access, and low or no fees.

What's the difference between an SMSF savings account and a regular savings account?

Trusts and superannuation funds are not permitted to use many regular savings accounts. This is due to superannuation laws and Australian Taxation Office demands that SMSF funds are kept entirely separate from individual finances.

While very similar in function, SMSF savings accounts are specifically registered in the name of the SMSF and are limited to the fund's financial transactions only, including contributions, investment income, and expenses. They should not accommodate any funds or transactions of individual members.

Many accounts will be marketed as SMSF savings accounts although some business and other accounts may also be compatible for use by an SMSF. It's important to check with the specific bank or financial institution first to be sure which accounts are able to be used by an SMSF. Many may direct you to specific SMSF products or those that are SMSF compatible.

It's common for SMSFs to have more than one member or trustee so each member of the fund will generally have access to the account, which will operate much like a joint account.

Most SMSF, or SMSF-compatible, savings accounts pay interest, but some may only offer interest on balances above a certain amount. It's worth finding an account with a competitive interest rate that doesn't put up too many hurdles to achieve it as well as no, or low, fees.

SMSF savings account features

Some features of SMSF savings accounts should include:

Government $250,000 guarantee

Like regular savings accounts, term deposits, and transaction accounts, SMSF savings accounts provided by APRA-recognised banks are covered by the federal government's $250,000 deposit guarantee via the Financial Claims Scheme (FCS).

Mobile, internet, and phone banking

Many SMSF savings account providers allow the accounts to be managed via a mobile app, online, or over the phone.

Joint access

An SMSF savings account typically allows each member of the fund to access the account, much like a regular joint account.

Transactions

Some SMSF savings accounts may come with direct debit and direct credit facilities to allow you to move your funds around. Others may be linked to a transaction account that allows you to switch funds between the two.

Choosing an SMSF savings account

Just like a regular savings account, here are the key things to look out for:

Interest rate and conditions

If you have any amount of cash, it may as well be earning as much interest as possible. But if you have a large sum of cash, it's even more important. Looking for a competitive interest rate should be the starting point. When you've identified the market leaders, you then need to check the terms and conditions associated with achieving the best rates.

Some funds will only pay interest if a certain amount is deposited each month or, alternatively, on amounts above or below a certain threshold. Other accounts may have handsome introductory rates that expire within a few months of opening, leaving you with a less attractive revert rate.

See also: The different types of savings account interest rates

Fees

Some SMSF accounts may charge account-keeping fees that can effectively take a slice of any interest you earn, while others won't charge anything at all. Be sure to read the fine print of the SMSF savings products you're considering.

What are the best SMSF savings accounts on the market?

The variable interest rates offered on SMSF savings accounts are generally lower than those for personal high-interest savings accounts at the same institutions. Rates can also vary according to the account balance and other conditions being met.

Generally, a good SMSF savings accounts should come with no account-keeping fees.

The table below features some of the most popular high-interest SMSF savings accounts - or SMSF compatible accounts - on the market:

Bank and Product	Conditions & fees
Macquarie Cash Management Accelerator Account (suitable for SMSFs)	No fees
Rabobank SMSF High Interest Savings Account	No account-keeping fees.
Qudos Bank DIY Super Saver	Bonus rate applies if balance is above $10,000 and no withdrawals are made during the month. No fees

Accurate as at April 2025 with conditions subject to change

Do the big four offer SMSF savings accounts?

Australia's big four banks also offer SMSF accounts, although some are transaction or business accounts that can be used for SMSF purposes. It's worth noting their interest rates tend to be considerably lower than those of other banks with specialist SMSF savings products.

Below is a comparison of the conditions attached to their accounts:

Bank & product	Conditions
Commonwealth Bank SMSF cash account (Commonwealth Direct Investment Account CDIA)	Balances below $10,000 earn no interest. No maximum balance. No monthly account or withdrawal fees.
ANZ SMSF Cash Hub Account	No maximum balance. No monthly account service fee and unlimited ANZ transactions.
NAB Cash Manager Account (suitable for SMSFs)	No minimum or ongoing balance. No card access for SMSFs in accumulation phase. No fees.
Westpac Business Cash Reserve Savings Account (suitable for SMSFs)	Need a Business transaction account. No minimum or maximum balances on both. No fees.

Accurate as at April 2025 with conditions subject to change

Savings.com.au's two cents

While the main game of SMSFs is to invest money for their members' retirements, having a dedicated SMSF savings account is a good way to put any cash assets to work in between investments or when market interest rates are offering good returns.

An advantage of savings accounts is that they can provide a low-risk investment, with amounts up to $250,000 guaranteed under the federal government's Financial Claims Scheme in the unlikely event the financial institution goes under. They can also earn interest on any cash the fund has to carry for its day-to-day operations and still provide flexible access to cash reserves should the fund require them.

Even among the handful of products compared above, it's plain to see that shopping around for a good interest rate can make a considerable difference to the money the SMSF can earn simply by storing its cash in the right place. It's just as important to check any conditions and fees attached and ensure the account provides the flexibility and accessibility to suit your fund's specific needs.

Some regular high interest savings accounts will be suitable for SMSF use but others will not, so it's vital to do your research beforehand to ensure the savings account you choose will comply with superannuation laws and ATO requirements. The financial institution you choose should be able to assist you with this.

Image by Andrew Neel on Unsplash

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