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Bank on your own future with a self-managed super fund

RateCity shows you how to take control of your superannuation fund with an easy investment option.

We all know that superannuation is the process of investing for our retirement. However, most of us don't give our super a second thought as we leave it in the hands of super companies to hopefully make the right decisions as they invest in our future. But there is another option available, which is fast becoming a popular way to turn your retirement money into something really super.

By taking your super fund into your own hands, you have the ability to broaden the range of investment options available, allowing your money tree to flourish in time for your retirement.

Self-managed super funds are a $332.3 billion industry and it's growing. According to a report from the Australian Prudential Regulation Authority (APRA) the number of self-managed super funds increased by 5.2 percent in June 2009 to 410,318 compared to 12 months prior.

Take more control over your future
While there are a number of investment strategies when managing your own super fund, those with self-managed super funds should take advantage of term deposit accounts while the interest rates are high.

According to research by RateCity, interest rates for some term deposits have increased. The current average rate of more than 100 financial institutions for one-year term deposits is 5.93 percent, which is an increase of 2.49 percentage points over the 12 months to August 2010.

In the past 12 months the average three-year term deposit rate has also increased by 2.18 percentage points to the current average of 6.42 percent.

The research also showed that the one-year money market rate (MMR), which is the rate that financial institutions use to help determine their fixed rates, increased by 1.1 percentage points from the 2009 average to the current rate of 4.8 percent. The effect of an increase in the MMR means that financial institutions will be paying more for term deposit accounts by offering unusually high rates.

Make the most of current offers
RateCity's CEO, Damian Smith, expects the high rates offered by many financial institutions not to last.
"Term deposits are one of the lowest risk investments you can find," Smith said, "especially for self-managed super funds, because you're guaranteed a particular return for the entire term so there's no risk of losing your savings compared to other riskier investments.

"As money market rates are falling, we don't expect these unusually high rates to last much longer, which is why it's a great time for self-managed super funds to compare term deposits," he said.
"Make sure you do your homework if you're planning on managing your super fund and read the product disclosure statement before signing up to an account."

So if you have a bit of time and some knowledge of the super industry (or a willingness to learn), take control of your future today by creating your own super fund where you know where and how your money will be invested. Now is a great time to shop and compare term deposit rates online as they are currently offering high returns to help you in retirement.

For more information on where to start with setting up your own DIY super fund, visit the ATO website.

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