Super fund opens its doors to SMSF investors

Super fund opens its doors to SMSF investors

Hostplus has launched a new product that allows Australians with self-managed superannuation funds to invest through a professional super group.

The Self-Managed Invest product allows SMSF members to pool their funds with Hostplus, as unitholders in six of its 23 investment options:

  • Balanced
  • Indexed Balanced
  • Australian Infrastructure
  • Industry Super Property Trust – Australian Property
  • Infrastructure
  • Property

Hostplus chief executive David Elia said SMSF members who invest through Self-Managed Invest will also gain other benefits, including:

  • Access to assets ordinarily unavailable to retail investors
  • Reduced administrative, compliance and reporting responsibilities

“We believe this is an Australian-first, and is an innovative and practical demonstration of how two of Australia’s largest superannuation and pension sectors can work together for the mutual benefit of DIY investors and our fund members alike,” he said.

Why you might want to switch your super

One of the most important financial decisions someone can make is to compare super funds – and then, potentially, change funds.

Over the course of a 45-year career, a small difference in annual returns, fees and charges can produce big differences in the size of your final nest egg.

For example, imagine you have a $75,000 salary for your entire career, which would mean receiving $7,125 of superannuation per year. Let’s also assume your fund has a ‘medium’ level of fees and charges, which would mean a contribution fee of 0 per cent, an admin fee of $50 per year and an indirect cost ratio of 0.6 per cent. Here’s how much you would have after 45 years based on different investment scenarios:

Investment option Investment return (p.a.) Tax on earning Investment fees Final total
Cash 2.7% 15.0% 0.05% $224,356
Conservative 3.8% 10.6% 0.3% $262,498
Moderate 4.4% 8.3% 0.4% $290,557
Balanced 4.8% 6.5% 0.5% $311,299
Growth 5.0% 5.8% 0.6% $319,297
High growth 5.3% 4.1% 0.7% $337,268

Source: ASIC superannuation calculator

To highlight the impact of fees, let’s compare different fee scenarios. This time, we’ll model just the ‘balanced’ option, which comes with an investment return of 4.8 per cent, a tax on earning of 6.5 per cent and investment fees of 0.5 per cent.

Fee level Contribution fee Admin fee (p.a.) Indirect cost ratio Final total
High 4% $0 2% $238,215
Medium-high 2% $0 1.3% $272,623
Medium 0% $50 0.6% $311,299
Low-medium 0% $50 0.3% $327,854
Low 0% $50 0% $345,537

Source: ASIC superannuation calculator

There are many super funds to choose from

So, should you stay with your super fund or switch?

That depends on how your current provider compares to the many other options in the market.

Check your latest statement to find out how your fund is performing. To make an accurate comparison, you should probably look at investment returns over a period of at least five years, to filter out any short-term fluctuations.

If you discover that your fund has been underperforming, it might be time to find another super fund.

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Learn more about bank accounts

Do I need to open a business bank account?

Just because you’re in business doesn’t necessarily mean you need a business bank account. You could be a sole trader not registered for GST, and use your personal bank account for business.

If you do want a business account, there are plenty of benefits attached to business transaction and savings accounts, as well as business term deposits.

There are business bank accounts designed for businesses with a high volume of transactions, and those for start-ups with a small amount of trade. You could also include an EFTPOS service with your account.

Some business bank accounts charge for the number of transactions per month, while others offer a pay-as-you-go fee structure, where you only pay fees for transactions you make.

It’s up to you whether your priority is mainly transactions, or earning the maximum amount of interest on your principal. There’s a business banking solution for you if you need one.

Can I close a bank account with pending transactions?

You can close a bank account with pending transactions. But after the account is closed, any incoming transactions will be declined by your (old) bank.

The best way to ensure this doesn’t occur is to either wait to close your account until all pending transactions are complete, or contact the creditor and supply them with alternate bank details.

If you’re unsure whether you have any scheduled transactions, you can speak to a banking representative over the phone or via online support.

In most cases, your bank withholds the amount owing for pending transactions (such as online purchases).

Because the pending amount is deducted from your bank balance, you can close your bank account and the purchase will be honoured.

How do I close a bank account?

Closing a bank account is one of those tasks that’s easy to put in the too-hard basket. There are quite a few steps involved, some which may require you to hang on the phone for a while.  

Here’s a handy checklist of items to tick off, so the job gets done quicker. If you don’t do your banking online, the following steps can also be done at a branch.   

  • Cancel any scheduled or recurring payments
  • Update your direct debit details (such as loan repayments) with creditors
  • Export your payee address book (to keep a record of saved third-party bank account details)
  • Transfer the balance of your account (to the new bank account)
  • Close your account online, or by calling the bank or visiting a branch

Can you open another account at the same bank?

Yes, you can open another account at the same bank if you already have an account there, but some banks place a limit on how many specific accounts you can open.

Generally, though, it is possible to have more than one everyday account, one personal account and one joint account, or have different types of accounts – such as a transaction account and a savings account.

Keep in mind that some bank accounts come with fees, so you could be charged twice for having two types of the same account at the same bank.

Also, if you have more than one high-interest transaction account at the same bank, only one account will be able to earn the highest rate of interest.

What do you need to open bank accounts?

Opening a bank account is one of the simplest online tasks you could perform. The hard part is deciding which type of bank account you want to open.

All banking institutions have a website where you hit ‘apply’ on the account of your choice and step through an application in less than 10 minutes.

Here’s a list of information that is generally required for applications.

  • Identification (driver’s licence, passport, proof of age card, proof of citizenship and/or birth certificate)
  • Tax file number (so you don’t get charged the highest tax rate)
  • Address, contact email and phone number

If you decide to open a new account at the branch, make sure you ask beforehand what information you need to take with you, or take all of the above to be safe.

Can you deposit money into somebody else's bank account?

One of the easiest banking tasks in the world is depositing money. You can even deposit money into someone else’s bank account if you wish.

The basic information you need to deposit money into a third-party bank account is:

  • Payee’s name
  • Bank, building society or credit union (though this isn’t necessary)
  • BSB (or bank code, which is the branch identifier)
  • Account number

Including the name of the financial institution isn’t necessary – particularly with online banking – because the BSB will identify this for you.

A handy tip is to record yourself (or add a personal message) in the transaction description or reference. This will show up on the recipients account, letting them know who’s paid them the money.

How can I close an ANZ Bank account from overseas?

There are two ways you can close your ANZ Bank account from overseas:

  • Call +64 4 472 7123 (toll charges apply)
  • Send a bank mail request via ANZ internet banking

How do I open a bank account for a child?

There are few better ways for a child to learn about money management than through savings. And there’s a plethora of bank accounts designed specifically for young people and children.

A bank account for a child can be opened online, over the phone or in a branch in a few easy steps. The minimum age a child can open a bank account for themselves usually ranges between 12 and 14.

If the child is too young to open the account, you can do it for them as their legal parent or guardian. 

To do this, you would need to be over 18, have an Australian residential address and currently reside in Australia (or have proof of residency).

You would also need to provide:

  • Identification for yourself and the child
  • Your tax file number (TFN) or TFN exemption

Depending on the bank account, you might be able to choose what level of access the child has to their bank account (online and via the phone).

How do you open a bank account in Australia?

Opening a bank account in Australia is usually a straightforward process. Some banks give you the option of opening an account online, while others require you to visit a branch.

Different bank accounts offer different features, so it’s best to compare your options to find one that suits you.

All banks require you to pass an identity check to open a bank account. Australia uses the 100-point identification system, which means you’ll need to show a number of forms of ID that, together, add up to 100 points.

Common ID types include a driver’s licence, passport, Australian visa in a foreign passport, and Australian Medicare card. You’ll find out what types of ID are accepted when you go through the sign-up process online or at a branch.

Once your account is open, you’ll be given or sent a debit card that you can use to make purchases and withdraw money from your account.

How can you cash a cheque without a bank account?

You can cash a cheque without a bank account if you visit the bank that issued the cheque. For example, if somebody sends you a cheque from Bank X (as written on the cheque) and you visit Bank X, it’s likely that Bank X will let you cash the cheque – provided the person who wrote the cheque has enough money in their account. Bank X would probably charge you a fee for the service.

How can I find bank accounts in my name?

To find ‘live’ bank accounts in your name, you’ll have to ask individual lenders, which involves contacting them one by one and proving your identity each time. To find ‘unclaimed’ bank accounts (those that have been inactive for at least seven years), you can use this website.

Can I find my bank account number online?

Yes, you can find your bank account number by logging into your online banking and clicking on the relevant account.

How do I open a bank account if I'm under 18?

The good news for savvy young folks like you wanting to take charge of your finances is that there are many bank accounts available for under-18s.

For bank accounts that require you to be 18 or older, you’ll have to rope in a parent or guardian to open the account for you.

Otherwise, you can apply by yourself online or at the branch of the bank, credit union or building society that has the account you would like to open. 

If applying online, you might be asked for a form of identification. For under-18s, this could be a Medicare card you’re listed on, your birth certificate and/or your current home address.

In most cases, you can verify your identity online (at the time of applying) or at the branch afterwards.

Can I have a PayPal account without a bank account?

You don’t need a bank account to send or receive money through PayPal. However, you do need a bank account if you want to withdraw money from your PayPal account.