Must read: Looking for the best investment account?
There's no single investment account that's best for everyone as all our needs are different - and what's best for you might not be best for someone else. Keep in mind that we don't compare every product in the market, but we hope that our tools and information will allow you to compare your options and find the best investment account for you.
There are many ways that you can grow your money. Savings accounts, term deposits, superannuation, share trading and foreign exchange are all investment options that people use to increase their wealth.
Each type of investment account offers a different return on the dollar and associated level of risk. As a general rule, the safest options offer the lowest returns, while the riskiest options have the potential for big returns. If you’re looking to earn more from your money, start by considering whether you’re comfortable taking a loss.
Other factors, such as investment size and horizon, also play a part. If you'd like to invest your money outside of super, you can find an analysis of other investment accounts below.
Customers aged 25+ earn an ongoing variable 2% p.a. each month you deposit at least $2,000 into your linked Virgin Money Go Transaction Account, make 5+ transactions and give 32 days' notice to make a withdrawal or transfer by enabling the 'Lock Saver' feature. Plus, 5,000 bonus Virgin Money Points when you open a new account, for a limited time only.
The 2% p.a. is made up of the Base Rate of 0.05% p.a. + Bonus Rate of 1.45% p.a. + Notice Rate of 0.5% p.a (optional with 'Lock Saver'). The bonus rate is available on balances up to $250,000.
No-risk investment accounts
Low or zero-risk investments where your money is guaranteed include high-interest savings accounts and term deposits. With these kinds of investments, you'll make a small capital gain on your money with no potential for loss. If a financial collapse occurs, your money is guaranteed by the government to the amount of $250,000.
Savings accounts are among the most widely used types of investment accounts by Australians because they're completely safe and your funds can be deposited or withdrawn at any time without hassle. High-interest savings accounts offer the most competitive rates in the market.
Key features of a savings account
Has no minimum deposit requirements
Is an ongoing investment
Earns income from interest payments based on the size of your cash deposit
Sometimes pays bonus interest during an introductory period
Allows your money to remain available to withdraw when you want
A notice saver is a relatively new product in Australia and a hybrid between a term deposit and a savings account. While your interest rate is variable as with a savings account, you can't access your funds immediately. Instead, you need to give notice of a month or more to withdraw your money. Notice periods are usually 30, 60 or 90 days.
Key features of a notice saver
No term date, but requires that you give notice to withdraw funds, typically 30, 60 or 90 days
Has a variable rate of interest which may benefit you
Is an ongoing investment; funds are withdrawn to a linked transaction or savings account
A term deposit is a set and forget investment. You agree to deposit your money for a fixed term and get paid a fixed amount of interest over the life of the investment. As a banking product, there is no risk that you will lose your funds. On the other hand, if interest rates go up and you're locked into a lower rate account, you risk being stuck in an underperforming investment.
Any investment held outside of a bank account will carry some kind of risk because funds aren't guaranteed by the government if a company collapse occurs. At the same time, there's an opportunity to make higher returns and the risk of a company collapse is low for many well established organisations – it's all about doing your research.
Non-banking investments include ETFs, P2P funds, share trading, managed funds and portfolios offered by robo advisers. The following investments offer varying levels of risk and wont be suitable for everyone. Click through to their respective guides for more information.
Peer-to-peer investing accounts
Peer to peer (P2P) lending investment accounts appear similar (at face value) to term deposits, but because they're non-bank investments, you don't have the same safety guarantee. They offer a fixed rate – typically much higher than those of savings accounts or term deposits – and your funds are locked down for a specified term.
Important: Share trading can be financially risky and the value of your investment can go down as well as up. Standard brokerage is the cost to purchase $1,000 or less of equities without any qualifications or special eligibility. Where both CHESS sponsored and custodian shares are offered, we display the cheapest option.
Key features of share trading accounts
Gives you access to a wide range of investments including shares, ETFs and listed investment companies (LITs)
Charges a brokerage fee when you trade shares
Share trading has the potential for very high capital gains
There is the potential to lose money if your investments perform poorly
Is available for personal and institutional investors
Can deposit and withdraw funds easily online
Forex trading accounts
Forex trading has the potential for both high gains and big losses. Rather than buying shares for capital growth or investing into a high interest fund, forex traders speculate on the future price movements of international currency pairs. For this reason, forex is not "investing" in the traditional sense – rather it is trading.
Online forex accounts allow you to trade currencies from around the world from your computer or mobile. In exchange, you typically pay a commission or FX fee, known as the spread.
Trading CFDs and forex on leverage is high-risk and you could lose more than your initial investment. It may not be suitable for every investor. Refer to the provider’s PDS and consider the risks before trading.
Forex trading account key features
Forex trading requires specialist knowledge
Can be opened by both personal and institutional investors
You need to pay fees to the forex platform provider in the form of spread
Typically gives you access to other investments such as commodities and CFDs
Can leverage investments, which allows you to trade with more capital than you actually have. This can magnify both profits and losses.
Robo advisers are a relatively new service to Australia where you can enter your details online and be matched with an investment fund based on your profile. They offer competitively low fees compared to standard investment advisers and competitive high rates of return.
Most robo advisers feature a mobile app, so they make it easy to deposit your funds into and monitor the performance of your portfolio. They also tend to offer a broad range of investment portfolio choices, from aggressive to conservative and are relatively low risk investment choices.
Matched to an investment fund based on your profile
Easy to access and monitor online or on your mobile
Broad range of investment fund options
Can access Australian and international theme investments
Disclaimer: This information should not be interpreted as an endorsement of futures, stocks, ETFs, CFDs, options or any specific provider, service or offering. It should not be relied upon as investment advice or construed as providing recommendations of any kind. Futures, stocks, ETFs and options trading involves substantial risk of loss and therefore are not appropriate for all investors. Trading CFDs and forex on leverage comes with a higher risk of losing money rapidly. Past performance is not an indication of future results. Consider your own circumstances, and obtain your own advice, before making any trades.
Kylie Purcell is the investments editor at Finder, specialising in investment products from online brokers to robo-advisors and ETFs. She has a background in business and finance content with her work featured on sites including Yahoo Finance, Sky Business, SBS, CTGN and the Adviser Magazine. Kylie has a Masters in International Journalism and a Graduate Diploma in Economics. She is currently working towards ASIC RG146 compliance certificates for Financial Advice and Securities and Managed Investments. When she's not writing about the markets you can find her demoing the latest trading app.
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