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Product

VicSuper FutureSaver - EmployeeSaver

Past 5-year return
8.27

% p.a

FYTD return

2.76

% p.a

Company
Calc fees on 50k

$607

Features
Advisory services
Death insurance
Income protection
Online access
Term deposits
Variety of options
SuperRatings awards
SuperRatings Platinum 2022 MyChoice Super10 Yr Platinum Performance 2012-2022Smooth Ride Finalist 2022Infinity Recognised 2022
Go to site

Growth (MySuper) Option

Product

AMP SignatureSuper

Past 5-year return
New

% p.a

FYTD return

1.36

% p.a

Company
Calc fees on 50k

$738

Features
Advisory services
Death insurance
Income protection
Online access
Term deposits
Variety of options
SuperRatings awards
SuperRatings Platinum 2022 MyChoice Super
Go to site
Product

MLC MasterKey Super Fundamentals

Past 5-year return
7.69

% p.a

FYTD return

2.51

% p.a

Company
Calc fees on 50k

$750

Features
Advisory services
Death insurance
Income protection
Online access
Term deposits
Variety of options
SuperRatings awards
SuperRatings Platinum 2022 MyChoice Super
Go to site

Horizon 4 - Balanced Portfolio

Product

BT Panorama - Super Full Menu

Past 5-year return
New

% p.a

FYTD return

-

% p.a

Company
Calc fees on 50k

$1.1k

Features
Advisory services
Death insurance
Income protection
Online access
Term deposits
Variety of options
SuperRatings awards
SuperRatings Gold 2022 MyChoice Super
Go to site

BT Wholesale Multi-manager Balanced Fund

Product

IOOF Employer Super (Full Menu)

Past 5-year return
8.11

% p.a

FYTD return

2.13

% p.a

Company
Calc fees on 50k

$1.1k

Features
Advisory services
Death insurance
Income protection
Online access
Term deposits
Variety of options
SuperRatings awards
SuperRatings Gold 2022 MyChoice Super
Go to site

IOOF MultiMix Balanced Growth Trust

Product

HUB24 Super Fund - Personal Super (Core Menu)

Past 5-year return
-

% p.a

FYTD return

-

% p.a

Company
Calc fees on 50k

$452

Features
Advisory services
Death insurance
Income protection
Online access
Term deposits
Variety of options
SuperRatings awards
SuperRatings Gold 2022 MyChoice Super
Go to site

InvestSense Diversified Portfolio 4

Product

netwealth Super Accelerator Core - Personal Super

Past 5-year return
6.63

% p.a

FYTD return

-

% p.a

Company
Calc fees on 50k

$563

Features
Advisory services
Death insurance
Income protection
Online access
Term deposits
Variety of options
SuperRatings awards
SuperRatings Gold 2022 MyChoice Super
Go to site

Active Growth Fund

Embed

Superannuation funds we compare at RateCity

Learn more about superannuation

Some superannuation funds offer term deposits for people who want to minimise their investment in the share market.

What are superannuation term deposits?

Superannuation term deposits are a specific type of term deposit that is offered by some superannuation funds. Rather than invest in the share market, some people prefer to deposit their super into a term deposit because the interest rate is locked in, which can be appealing in comparison to the volatility of the market.

Super term deposits can also be set up by people with self-managed superannuation funds (SMSFs). Self-managed super funds are available for people who opt to manage their superannuation themselves as opposed to having a superannuation company do it.

Some people choose to manage their own super fund because it gives them access to a broader range of investment options. It also means not having to pay fund fees or commissions to financial advisers.

Pros and cons of superannuation term deposits

There are a number of potential advantages and disadvantages to investing your super in a term deposit.

Pros

  • Low-risk investment – Term deposits are a fixed investment, which means your money isn’t exposed to the volatility of the market.
  • Interest rate is fixed – Once the interest rate is locked in, it stays the same for the life of the term deposit.
  • Relatively easy to manage – Term deposits are easy to manage compared with other investment options because you only need to deposit the money and let it mature.
  • Low tax rate – Unlike regular bank term deposits, the returns on super term deposits are taxed at a lower rate.

Cons

  • Money is locked away – Once you’ve deposited your money, you won’t be able to access it for a certain period of time, even if other super investment opportunities arise.
  • Low flexibility – Depositing a lump sum means less money to invest elsewhere.
  • You are responsible for your super – If you’re investing in a term deposit with a self-managed super fund, you are responsible for managing your investments, which means you need to thoroughly understand your financial and legal obligations.

How to set up a superannuation term deposit

If you’ve decided you want to put your super into a term deposit, you’ll need to decide whether you want to do so through a professionally managed super fund or as a self-managed super fund.

Keep in mind that with an SMSF, you become fully responsible for managing your money and are personally liable for all the decisions made by the fund – even if you get help from a financial adviser.

If you choose to stick with a managed super fund, many offer DIY investment options where you can choose specific assets like term deposits, as well as shares and exchange traded funds. Compare super funds to find one that best suits your financial goals.

Frequently asked questions

What are ethical investment superannuation funds?

Ethical investment funds limit themselves to making ‘ethical’ investments (which each fund defines according to its own principles). For example, ethical funds might avoid investing in companies or industries that are linked to human suffering or environmental damage.

Am I entitled to superannuation if I'm a contractor?

As a contractor, you’re entitled to superannuation if:

  • The contract is mainly for your labour
  • You’re over 18 and earn more than $450 before tax in a calendar month
  • You’re under 18, you work more than 30 hours per week and you earn more than $450 before tax in a calendar month

Please note that you’re entitled to superannuation even if you have an Australian business number (ABN).

How much extra superannuation can I add to my fund?

There is an annual limit of $25,000 for concessional contributions – that is, money paid by your employer and extra money you pay into your account through salary sacrificing. There is also a limit on non-concessional contributions. Australians aged between 65 and 74 have a limit of $100,000 per year. Australians aged under 65 have a limit of $300,000 every three years.

Is superannuation paid on overtime?

As the Australian Taxation Office explains, there are times when superannuation is paid on overtime and times when it isn’t.

Here is the ATO’s summary:

Payment type Is superannuation paid?
Overtime hours – award stipulates ordinary hours to be worked and employee works additional hours for which they are paid overtime rates No
Overtime hours – agreement prevails over award No
Agreement supplanting award removes distinction between ordinary hours and other hours Yes – all hours worked
No ordinary hours of work stipulated Yes – all hours worked
Casual employee: shift loadings Yes
Casual employee: overtime payments No
Casual employee whose hours are paid at overtime rates due to a ‘bandwidth’ clause No
Piece-rates – no ordinary hours of work stipulated Yes
Overtime component of earnings based on hourly-driving-rate method stipulated in award No

Can my employer use money from my superannuation account?

No, your employer can’t touch the money that is paid into your superannuation account.

What are reportable employer superannuation contributions?

Reportable employer superannuation contributions are special contributions that an employer makes on top of the regular compulsory contributions. One example would be contributions made as part of a salary sacrifice arrangement.

What are reportable superannuation contributions?

For employees, there are two types of reportable superannuation contributions:

  • Reportable employer super contributions your employer makes for you
  • Personal deductible contributions you make for yourself

What will the superannuation fund do with my money?

Your money will be invested in an investment option of your choosing.

Do I have to pay myself superannuation if I'm self-employed?

No, self-employed workers don’t have to pay themselves superannuation. However, if you do pay yourself superannuation, you will probably be able to claim a tax deduction.

What is a superannuation fund?

A superannuation fund is an institution that is legally allowed to hold and invest your superannuation. There are more than 200 different superannuation funds in Australia. They come in five different types:

  • Retail funds
  • Industry funds
  • Public sector funds
  • Corporate funds
  • Self-managed super funds

Retail funds are usually run by banks or investment companies.

Industry funds were originally designed for workers from a particular industry, but are now open to anyone.

Public sector funds were originally designed for people working for federal or state government departments. Most are still reserved for government employees.

Corporate funds are arranged by employers for their employees.

Self-managed super funds are private superannuation funds that allow people to directly invest their money.

What age can I withdraw my superannuation?

You can withdraw your superannuation (or at least some of it) when you reach ‘preservation age’. The preservation age is based on date of birth. Here are the six different categories:

Date of birth Preservation age
Before 1 July 1960 55
1 July 1960 – 30 June 1961 56
1 July 1961 – 30 June 1962 57
1 July 1962 – 30 June 1963 58
1 July 1963 – 30 June 1964 59
From 1 July 1964 60

When you reach preservation age, you can withdraw all your superannuation if you’re retired. If you’re still working, you can begin a ‘transition to retirement’, which allows you to withdraw 10 per cent of their superannuation each financial year.

You can also withdraw all your superannuation once you reach 65 years.

How do you pay superannuation?

Superannuation is paid by employers to employees. Employers are required to pay superannuation to all their staff if the staff are:

  • Over 18 and earn more than $450 before tax in a calendar month
  • Under 18, work more than 30 hours per week and earn more than $450 before tax in a calendar month

This applies even if the staff are casual employees, part-time employees, contractors (provided the contract is mainly for their labour) or temporary residents.

Currently, the superannuation rate is currently 9.5 per cent of an employee’s ordinary time earnings. This is scheduled to rise to 10.0 per cent in 2021-22, 10.5 per cent in 2022-23, 11.0 per cent in 2023-24, 11.5 per cent in 2024-25 and 12.0 per cent in 2025-26.

Employers must pay superannuation at least four times per year. The due dates are 28 January, 28 April, 28 July and 28 October.

How is superannuation regulated?

The Australian Prudential Regulation Authority (APRA) regulates ordinary superannuation accounts. Self-managed superannuation funds (SMSFs) are regulated by the Australian Taxation Office.

What is the age pension's income test?

These are the rules for most people who want to claim the standard pension:

Single people

  • If your income per fortnight is up to $168, you’re entitled to a full pension
  • If your income per fortnight is over $168, your pension will reduce by 50 cents for each dollar over $168

Couples

  • If your income per fortnight is up to $300, you’re entitled to a full pension
  • If your income per fortnight is over $300, your pension will reduce by 50 cents for each dollar over $300

These are the rules for most people who want to claim the transitional pension:

Single people

  • If your income per fortnight is up to $168, you’re entitled to a full pension
  • If your income per fortnight is over $168, your pension will reduce by 40 cents for each dollar over $168

Couples

  • If your income per fortnight is up to $300, you’re entitled to a full pension
  • If your income per fortnight is over $300, your pension will reduce by 40 cents for each dollar over $300

For most people, the age pension cuts off if your fortnightly income exceeds these thresholds:

Category Fortnightly income
Standard pension for singles $1,944.60
Standard pension for couples living together $2,978.40
Standard pension for couples living apart due to ill health $3,853.20
Transitional pension for singles $2,038.00
Transitional pension for couples living together $3,317.00
Transitional pension for couples living apart due to ill health $4,040.00

Is superannuation taxed?

Superannuation is taxed. It is generally taxed at 15 per cent. However, if you earn less than $37,000, you will be automatically reimbursed up to $500 of the tax you paid. Also, if your income plus concessional superannuation contributions exceed $250,000, you will also be charged Division 293 tax. This is an extra 15 per cent tax on your concessional contributions or the amount above $250,000 – whichever is lesser.

How much superannuation should I have at age 40?

The amount of superannuation you should have at age 40 is based on how much money you need to have at retirement. That, in turn, is based on how much money you expect to spend each week during your retirement. That, in turn, depends on whether you expect to lead a modest retirement or a comfortable retirement.

The Association of Superannuation Funds of Australia (ASFA) estimates you would need the following amount per week:

Lifestyle Singles Couples
Modest $465 $668
Comfortable $837 $1,150

Here is the superannuation balance you would need to fund that level of spending:

Lifestyle Singles Couples
Modest $50,000 $35,000
Comfortable $545,000 $640,000

These figures come from the March 2017 edition of the ASFA Retirement Standard.

The reason people on modest lifestyles need so much less money is because they qualify for a far bigger age pension.

Here is how ASFA defines retirement lifestyles:

Category Comfortable Modest Age pension
Holidays One annual holiday in Australia One or two short breaks in Australia near where you live Shorter breaks or day trips in your own city
Eating out Regularly eat out at restaurants. Good range and quality of food Infrequently eat out at restaurants. Cheaper and less food Only club special meals or inexpensive takeaway
Car Owning a reasonable car Owning an older, less reliable car No car – or, if you do, a struggle to afford the upkeep
Alcohol Bottled wine Casked wine Homebrew beer or no alcohol
Clothing Good clothes Reasonable clothes Basic clothes
Hair Regular haircuts at a good hairdresser Regular haircuts at a basic salon Less frequent haircuts or getting a friend to do it
Leisure A range of regular leisure activities One paid leisure activity, infrequently Free or low-cost leisure activities
Electronics A range of electronic equipment Not much scope to run an air conditioner Less heating in winter
Maintenance Replace kitchen and bathroom over 20 years No budget for home improvements. Can do repairs, but can’t replace kitchen or bathroom No budget to fix home problems like a leaky roof
Insurance Private health insurance Private health insurance No private health insurance

 

 

Am I entitled to superannuation if I'm not an Australian citizen?

Yes, permanent and temporary residents are entitled to superannuation.

How do you create a superannuation account?

Before you create a superannuation account, you’ll need to check if you’re allowed to choose your own fund. Most Australians can, but this option doesn’t apply to some workers who are covered by industrial agreements or who are members of defined benefits funds.

Assuming you are able to choose your own fund, the next step should be research, because there are more than 200 different superannuation funds in Australia.

Once you’ve decided on your preferred superannuation fund, head to that provider’s website, where you should be able to fill in an online application or download the appropriate forms. You’ll need your tax file number (assuming you don’t want to be charged a higher tax rate), your contact details and your employer’s details (if you’re employed).

How much superannuation do I need?

According to the Association of Superannuation Funds of Australia (ASFA), here is how much you would be able to spend per week during retirement:

Lifestyle Singles Couples
Modest $465 $668
Comfortable $837 $1,150

Here is the superannuation balance you would need to fund that level of spending:

Lifestyle Singles Couples
Modest $50,000 $35,000
Comfortable $545,000 $640,000

These figures come from the March 2017 edition of the ASFA Retirement Standard.

The reason people on modest lifestyles need so much less money is because they qualify for a far bigger age pension.

Here is how ASFA defines retirement lifestyles:

Category Comfortable Modest Age pension
Holidays One annual holiday in Australia One or two short breaks in Australia near where you live Shorter breaks or day trips in your own city
Eating out Regularly eat out at restaurants. Good range and quality of food Infrequently eat out at restaurants. Cheaper and less food Only club special meals or inexpensive takeaway
Car Owning a reasonable car Owning an older, less reliable car No car – or, if you do, a struggle to afford the upkeep
Alcohol Bottled wine Casked wine Homebrew beer or no alcohol
Clothing Good clothes Reasonable clothes Basic clothes
Hair Regular haircuts at a good hairdresser Regular haircuts at a basic salon Less frequent haircuts or getting a friend to do it
Leisure A range of regular leisure activities One paid leisure activity, infrequently Free or low-cost leisure activities
Electronics A range of electronic equipment Not much scope to run an air conditioner Less heating in winter
Maintenance Replace kitchen and bathroom over 20 years No budget for home improvements. Can do repairs, but can’t replace kitchen or bathroom No budget to fix home problems like a leaky roof
Insurance Private health insurance Private health insurance No private health insurance

How can I keep track of my superannuation?

Most funds will allow you to access your superannuation account online. Another option is to manage your superannuation through myGov, which is a government portal through which you can access a range of services, including Medicare, Centrelink, aged care and child support.