What are investment accounts and how can they make you money?

A quick and simple guide to investment accounts for beginners.

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You've heard that investment accounts can help to grow your wealth, but how do you choose the right one? There are many different ways to invest your money; financial institutions tailor different accounts to suit different people.

In this guide, you'll read about the different types of investment accounts, as well as the benefits and the risks associated with them.

What are investment accounts?

An investment account is a broad term applied to any account that holds cash or investments such as bonds, stocks, ETFs, cryptocurrency or mutual funds. Investment accounts include: share trading accounts, self managed super fund accounts, term deposits, deeming accounts and retirement accounts.

It's important to note that various types of investment accounts present different risks and returns. Not all of them will be suitable for you, depending on your investment strategy.

What are the different types of investment accounts?

Investment account is an umbrella term which includes a number of different financial products. Common types of investment accounts are:

  • Share trading investment accounts. Trade securities using a share trading account. This type of account has features that will appeal to traders, such as free brokerage. A share trading investment account can be tailored to suit your needs, for example, an investment account can easily be made into an investment loan if you need more capital.
  • SMSFs. This can be a series of accounts for your SMSF, one account for SMSF savings, an account for day to day expenses and an account for trading and investing, SMSF investment accounts are offered by most major financial institutions.
  • Margin loans. A margin loan gives you a line of credit to use to invest. Margin loans can be secured to a property or other asset such as a share portfolio. Margin loans can be used for certain investments but not others. You can use a margin loan to invest in common types of investment accounts like what's discussed on this page
  • Term deposits. One of the safest ways to invest your money, a term deposit gives a higher return when you lock your money away for longer periods. There's a penalty if you want to access your money before the term deposit matures and there are bonuses if you continue to invest your money once the first investment matures. Term deposit accounts are common and you can easily compare rates and fees using websites such as finder.com.au
  • Cash management accounts. A cash management account is also called a high interest savings account. Like a term deposit, this investment account gives you a guaranteed return on your deposit. Unlike a term deposit, you can earn bonus interest for an introductory period or when you meet certain conditions, such as maintaining a minimum monthly deposit, and you can access your money when you want without penalty.
  • Deeming account / retirement account. This type of investment account is aimed at Australians who are retired or claiming government benefits. Funds in a retirement account accrue interest at a rate tethered to the government's deeming rate — the investment rate of return used to calculate Centrelink benefits. Deeming accounts are offered by most registered deposit taking institutions.

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Compare investment accounts

Name Product Standard brokerage fee Inactivity fee Markets International
eToro (global stocks)
US$0
US$10 per month if there’s been no login for 12 months
Global shares, US shares, ETFs
Yes
Zero brokerage share trading on US, Hong Kong and European stocks with trades as low as $50.
Note: This broker offers CFDs which are volatile investment products and most clients lose money trading CFDs with this provider.
Join the world’s biggest social trading network when you trade stocks, commodities and currencies from the one account.
IG Share Trading
$8
$50 per quarter if you make fewer than three trades in that period
ASX shares, Global shares
Yes
$0 brokerage for US and global shares plus get an active trader discount of $5 commission on Australian shares.
Enjoy some of the lowest brokerage fees on the market when trading Australian shares, international shares, plus get access to 24-hour customer support.
Superhero share trading
$5
No
ASX shares, US shares
Yes
Australia’s lowest-cost broker for ASX shares and ETFs.
Pay zero brokerage on US stocks and all ETFs and just $5 (flat fee) to trade Australian shares from your mobile or desktop.
ThinkMarkets Share Trading
$8
No
ASX shares
No
Limited-time offer: Get 10 free ASX trades ($0 brokerage) when you open a share trading account with ThinkMarkets before 31 December 2021(T&Cs apply). $8 flat fee brokerage for CHESS Sponsored ASX stocks (HIN ownership), plus free live stock price data on an easy to use mobile app.
Bell Direct Share Trading
Finder AwardExclusive
Bell Direct Share Trading
$15
No
ASX shares, mFunds, ETFs
No
Finder Exclusive: Get 5 free stock trades and unlimited ETF trades until 31 Dec 2021, when you join Bell Direct. T&Cs apply.
Bell Direct offers a one-second placement guarantee on market-to-limit ASX orders or your trade is free, plus enjoy extensive free research reports from top financial experts.
SelfWealth (Basic account)
$9.5
No
ASX shares, US shares
Yes
Trade ASX and US shares for a flat fee of $9.50, regardless of the trade size.
New customers receive free access to Community Insights with SelfWealth Premium for the first 90 days. Follow other investors and benchmark your portfolio performance.
Saxo Capital Markets (Classic account)
$5
No
ASX shares, Global shares, Forex, CFDs, Margin trading, Options trading, ETFs
Yes
Access 19,000+ stocks on 40+ exchanges worldwide
Low fees for Australian and global share trading, no inactivity fees, low currency conversion fee and optimised for mobile.
CMC Markets Invest
$11
No
ASX shares, Global shares, mFunds, ETFs
Yes
$0 brokerage on global shares including US, UK and Japan markets.
Trade up to 9,000 products, including shares, ETFs and managed funds, plus access up to 15 major global and Australian stock exchanges.
HSBC Online Share Trading
$19.95
No
ASX shares, mFunds, ETFs, Bonds
No
Limited time offer: Get up to $100 in brokerage rebates on your first 5 trades when you sign up to a HSBC Online Share Trading account (T&Cs apply). Make trades online with brokerage fees starting from just $19.95 with an HSBC Online Share Trading account. Plus gain access to complimentary expert research, trading ideas and tools.
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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.

Name Product Maximum Variable Rate p.a. Standard Variable Rate p.a. Bonus Interest p.a. Fees
Rabobank SMSF PremiumSaver
0.55%
0.1%
0.45%
$0
Ongoing, variable 0.55% p.a. when you link to an Rabobank High Interest Savings Account and increase your balance by $200+ each month. Available on balances up to $250,000.
AMP SuperEdge Saver Account
1%
0.65%
0.35%
$0
New customers can earn an introductory rate of 1% p.a. for 6 months, reverting to an ongoing variable rate of 0.65% p.a. Earn interest on your SMSF funds.
ANZ SMSF Cash Hub
0%
0%
$0
This account is for SMSF trustees to access their SMSF cash balance, to make payments and investments, and to receive income to the one account.
AMP SuperEdge Cash Account
0.1%
0.1%
0%
$0
Gain easy access to your funds while earning a competitive rate of interest with the AMP SuperEdge Cash Account.
Commonwealth Bank SMSF Commonwealth Direct Investment Account
0%
0%
$5
NAB Business Cash Maximiser (SMSF) Account
NAB Business Cash Maximiser (SMSF) Account
0.01%
0.01%
0%
$0
Rabobank Notice Saver SMSF (31 days)
0.55%
0.55%
0%
$0
Ongoing, variable 0.55% p.a. when you link to Rabobank HISA . Available on balances up to $250,000.
Rabobank Notice Saver SMSF (60 days)
0.6%
0.6%
0%
$0
Ongoing, variable 0.6% p.a. when you link to Rabobank HISA . Available on balances up to $250,000.
Rabobank Notice Saver SMSF (90 days)
0.35%
0.35%
0%
$0
Ongoing, variable 0.35% p.a. when you link to Rabobank HISA . Available on balances up to $2,000,000,000
Australian Military Bank DIY Super Saver Account
0.65%
0.65%
0%
$0
Ongoing, variable 0.65% p.a. Available on the entire balance.
Bank of Queensland Superannuation Savings Account
0.6%
0.15%
0.45%
$0
Introductory rate of 0.6% p.a. for 4 months, reverting to a rate of 0.15% p.a. Available on balances between $10,000 and $5,000,000.
G&C Mutual Bank Bonus Saver Account
G&C Mutual Bank Bonus Saver Account
0.51%
0.01%
0.5%
$6
Geelong Bank Achieve Saver Account
Geelong Bank Achieve Saver Account
0.55%
0.2%
0.35%
$0
Geelong Bank Superfund Maximiser Account
Geelong Bank Superfund Maximiser Account
0.6%
0.6%
0%
Heritage Bank Online Saver
0.35%
0.25%
0.1%
$0
Competitive ongoing, variable interest rate when you link to an eligible Heritage Bank transaction account. Bonus interest is available on balances up to $100,000 for 4 months.
IMB DIY Super
0.5%
0.5%
0%
$0
Introductory rate of 0.5% p.a. for 4 months, reverting to a rate of 0.5% p.a. Available on balance $5,000 and over.
ING Business Optimiser
1%
0.1%
0.9%
$0
Introductory rate of 1% p.a. for 6 months, reverting to a rate of 0.1% p.a. Available on balances below $1,000,000.
Macquarie Credit Union Online Savings Account
Macquarie Credit Union Online Savings Account
0.5%
0.2%
0.3%
$0
ME Business Online Savings Account
0.6%
0.6%
0%
$0
Earn a competitive interest rate on your business savings.
Newcastle Permanent Online Savings Account
0.4%
0.05%
0.35%
$0
Introductory rate of 0.4% p.a. for 3 months, reverting to a rate of 0.05% Available on the entire balance.
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Name Product 3 Mths p.a. 4 Mths p.a. 5 Mths p.a. 6 Mths p.a. 7 Mths p.a. 12 Mths p.a. 24 Mths p.a.
Rabobank Term Deposit
0.45%
-
-
0.75%
-
0.75%
0.50%
Suited to customers with deposits between $1,000 and $2,000,000.
With a Rabobank Term Deposit you will receive a competitive rate on your deposits and the choice of a 1, 3, 6, 9 or 12 month term.
Citibank Term Deposit $10,000
0.50%
-
-
0.50%
-
0.50%
-
Suited to customers with deposits between $10,000 and $249,999.
This term deposit is for new Citibank customers only
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Name Product Maximum Variable Rate p.a. Standard Variable Rate p.a. Bonus Interest p.a. Fees
NAB Cash Manager
0.05%
0.05%
0%
$0
Ongoing, variable 0.05% p.a. Available on the entire balance.
ANZ Share Investing Cash Investment Account
0.01%
0.01%
0%
$19.95
Set up an ANZ Share Investing Cash Investment Account to hold money in between your trades.
BankSA Investment Cash Account
0.01%
0.01%
0%
$0
Ongoing, variable 0.01% p.a. Available on the entire balance.
AMP Cash Manager
0.1%
0.1%
0%
$6
Ongoing, variable 0.1% p.a. available on your entire balance. The $6 account keeping fee is waived when you deposit $2,000 each month.
Hume Bank Professional Cash Management Account
0.01%
0.01%
0%
$0
Earn 0.01% p.a. for balance $100,000+. Interest rates are tiered, higher interest rates available on larger deposits.
First Option Bank Cash Management Account
First Option Bank Cash Management Account
0.2%
0.2%
0%
Northern Inland Credit Union Cash Management Account
Northern Inland Credit Union Cash Management Account
0.35%
0.35%
0%
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Name Product Maximum Variable Rate p.a. Standard Variable Rate p.a. Bonus Interest p.a. Fees
IMB Wisdom Saver
0.4%
0.4%
0%
$0
Available for members 55 years or over or member receiving an eligible permanent pension.
Bank Australia Pension Access Account
0.45%
0.45%
0%
$0
Fee-free transaction account for people on a pension that also pays interest in your balance.
AMP SuperEdge Pension Account
0.1%
0.1%
0%
$6
Ongoing, variable 0.1% p.a. when you link to an AMP SuperEdge Cash Account and deposit $2,000+ each month. Available on the entire balance.
Bank First Pension Account
0.35%
0.35%
0%
$0
A convenient, everyday account designed for those receiving a government pension and looking for a hassle-free way to manage their money.
Greater Bank Retirement Plus
0.3%
0.3%
0%
$0
Great if you're over 55 years of age and want to earn a higher rate on your savings.
NAB Retirement Account
0.36%
0.36%
0%
$0
A retirement account with easy access to your money.
AWA Alliance Bank Pensioner Account
0.45%
0.45%
0%
$0
An at-call savings account that is only available to those who hold a pension’s or health care card.
Westpac 55+ and Retired
Westpac 55+ and Retired
0.3%
0.3%
0%
$0
Defence Bank Retirement Savings Account
Defence Bank Retirement Savings Account
0.1%
0.1%
0%
$0
G&C Mutual Bank Pension Plus Account
G&C Mutual Bank Pension Plus Account
0.75%
0.75%
0%
$0
Police Bank Retirement Plus
Police Bank Retirement Plus
0.5%
0.5%
0%
Australian Military Bank Capital Guaranteed Pension
Australian Military Bank Capital Guaranteed Pension
0.25%
0.25%
0%
Nova Alliance Bank Pensioner Account ( S54 )
Nova Alliance Bank Pensioner Account ( S54 )
0.3%
0.3%
0%
Queensland Country Bank Pension Plus Account
Queensland Country Bank Pension Plus Account
0.4%
0.4%
0%
Northern Inland Credit Union Pension Plus Account
Northern Inland Credit Union Pension Plus Account
0.4%
0.4%
0%
Horizon Bank Advantage 55
Horizon Bank Advantage 55
0.75%
0.75%
0%
$0
BDCU Alliance Bank Retirement Account
BDCU Alliance Bank Retirement Account
0.3%
0.3%
0%
$6
An everyday bank account for those over 55 and no longer working with an ongoing variable rate of 0.3% p.a.
Central Murray Credit Union Pensioner Account
Central Murray Credit Union Pensioner Account
3%
2.25%
0.75%
The Mutual Bank Retirement Account
The Mutual Bank Retirement Account
0.7%
0.7%
0%
$0
Police Credit Union Master Club
Police Credit Union Master Club
0.45%
0.45%
0%
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How do I compare investment accounts?

Consider these points when you compare investment accounts.

  • Risk profile. Riskier investments give greater returns. Savings accounts and term deposits are among the safest types of investments, whereas share trading has the potential for big gains and losses. Everyone has a different risk appetite. There is a relationship between your risk appetite and your investment goals.
  • Your investment goals. Why are you investing? Is it to grow your retirement nest egg, are you saving for a deposit for a home or are you looking for a quick dollar. Access to capital and risk appetite are two important factors in deciding your investment goals and subsequently which investment account is right for you. For example, a high interest saving account is a better investment account for someone saving for their first home than a share trading account. Share trading can lead to big gains, but the chance of losing everything probably won’t appeal to someone saving for their first home. Your investment goals dictate your investment strategy, which is a must have for anyone comparing investment accounts.
  • Your investment strategy. Considering your investment goals, which investment account or investment account mix is suited to your needs. You can hedge your bets by choosing the right mix of investments. Your investment strategy also needs a time frame.
  • The length of the investment. Are you investment goals short, medium or long term? Different investments have different investment cycles. You can invest in a term deposit for a set period of time, for example, shares can be a little less black and white. Your goals and timeframe to realise those goals should help you make a decision about the best investment account for you.
  • Liquidity. Also compare different investment accounts based on how easily you can access your money. Savings accounts are among the most liquid type of investment account, you can get your money when you want it. Securities only become a liquid asset if you can find a buyer.

What are the pros and cons of using an investment account?

Pros

  • Financial gain. Different investments and investment accounts have the potential for different gains. The potential for capital gains is tied to the risk of the investment.
  • Choice. These types of accounts give you control over how you spend your money. Share trading accounts, retirement accounts, savings accounts and SMSF-funds are all different types of investment account.

Cons

  • Risk. The risk of suffering a capital loss.
  • Not for everyone. You need to have done your homework before you start investing and open an investment account.
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What are the risks?

  • How risky are you? The investment risk varies depending on the investment type. Term deposit and high interest savings accounts are basically no risk investment accounts, but the returns are low compared to the potential for capital gains from trading shares.
  • Margin lending. A margin loan investment account can be a great way to get capital to invest; however, this is a risky way to access cash. If you suffer a loss, the lender can claim the asset you use as a security for the margin loan.

Frequently asked questions

How do I open an investment account?

You can apply for an investment account if you’re over 18 and if you’re applying in your own name or in the name of a trust. Each type of investment account has it’s own application requirements. Before you can open an investment account, you may need to have an account with the financial institutions, like a transaction account and a credit card or a home loan for example. Some investment accounts have a minimum opening balance, you need to provide your address, your tax file number (you can supply this information after you apply) and information about any accounts you hold with the financial institution.

Can I open a joint investment account?

You can jointly open some investment accounts but it depends on the provider and type of account.

Can I have more than one investment account?

By holding a diverse spread of investments you’re reducing your risk. You can have multiple savings accounts, share trading accounts, term deposits from the same or different financial institution at a time.

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