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Term deposit for SMSF funds - any recommendations?

Discussion in 'Other Asset Classes' started by KayTea, 18th Dec, 2016.

  1. KayTea

    KayTea Well-Known Member

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    The SMSF transaction account pays no interest, so I'm looking at parking some 'excess funds' in a term deposit for a while (don't worry - it's in line with the investment strategy of the fund to allow for this).

    Does anyone know of any good term deposits (available to SMSFs) for anywhere between a 1 and 12 month term?
     
  2. Scott No Mates

    Scott No Mates Well-Known Member

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    The last ones I saw on Wednesday were less than 2% :oops:
     
  3. KayTea

    KayTea Well-Known Member

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    They're woeful, aren't they? But it's better than the 0.1% on the transaction account.

    There's a St George one offering 2.6% for 12 months - I'm just trying to see if there's anything better available (although I highly doubt it).
     
    Last edited: 18th Dec, 2016
  4. Scott No Mates

    Scott No Mates Well-Known Member

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    Go fot it @KayTea - another 0.1% on $100k is $100, barely worth it imho
     
  5. Newfast

    Newfast Well-Known Member

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    I am not sure how smsf term deposit works but nabtrade has high interest account option if you have trading with them and interest is 2.35% or 2.15% ( can't remember ).

    Ps: Not sure if it can apply to ur smsf funds.
     
  6. KayTea

    KayTea Well-Known Member

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    I'm thinking it is likely to be better to start paying a bit extra off the SMSF IP mortgage…….
     
  7. Terry_w

    Terry_w Structuring Broker and a Structuring Lawyer Business Member

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    No offset account?
     
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  8. KayTea

    KayTea Well-Known Member

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    I need to call the bank tomorrow - they've just sent a letter talking about being charged a 'full offset service fee', but no evidence of any offset.
     
  9. Terry_w

    Terry_w Structuring Broker and a Structuring Lawyer Business Member

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    What bank is it? Not many of the SMSF loans have offsets
     
  10. KayTea

    KayTea Well-Known Member

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    Thanks @Terry_w - that's what I thought. That's why I'm looking at parking the cash elsewhere.
     
  11. Foxy Moron

    Foxy Moron Well-Known Member

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    Thanks @Newfast for the heads up.
    I am a nabtrade customer and didn't know about this one. Its an internet-only type account currently 2.15%. Can be set up with just a couple of clicks, and yes it is offered to smsf customers as well as individuals.
     
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  12. TwoDogs

    TwoDogs Well-Known Member

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  13. DaveM

    DaveM Adelaide Buyers Agent & KFC Strategist Business Member

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    I have my SMSF surplus cash in a Rabodirect high interest acct... that YBR account looks interestingtho
     
  14. Hedgy

    Hedgy Well-Known Member

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    I had an SMSF term deposit with UBank (underwritten by NAB) about 18mths ago. At the time they were offering a good rate compared to most others. Not sure what their current rates are, but worth checking out.
     
  15. KayTea

    KayTea Well-Known Member

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    I called St George this morning - turns out I have an offset account, and didn't even know it! Their communication, and transaction listing, internet banking platform etc is not well set out or very informative, so it was very easy to miss this (I don't do my person banking with them - only SMSF stuff).

    So,with an IP mortgage interest rate around 3% higher than what a term deposit can offer, I think I'll just leave the money sitting in the offset.
     
  16. Terry_w

    Terry_w Structuring Broker and a Structuring Lawyer Business Member

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    Bad news - you could have been saving heaps in interest.
    But better late than never.
     
  17. KayTea

    KayTea Well-Known Member

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    Thankfully, loan was only established in May, so not too much lost.

    But I told the customer service person I spoke to that they really need to do a better job of communicating important information like this more clearly - nowhere in my online profile, or account setup, is there any indication that there is an offset relationship between two accounts. And when the loan account was set up, there were hundreds of pages of paperwork to sort through and sign (SMSF loan applications suck).

    Hope someone else can learn from my (lack of) observation.
     
  18. Terry_w

    Terry_w Structuring Broker and a Structuring Lawyer Business Member

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    You should have blamed them - saying you had told them to link the account at settlement. They would have reimbursed the fund the lost interest.
     
  19. KayTea

    KayTea Well-Known Member

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    It has been linked all along - I just didn't know about it. So, the account it is linked to (transaction account) has been sitting with very little money in it for months (poor interest rate), while most of the money was sitting in a Super Saver account (better interest rate than the transaction account, but still a joke).

    I've now moved pretty much all of it into the transaction account - the offset benefit will be much higher than the interest earned elsewhere, that's for sure.
     
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