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What is an investment account and how can it make you money?

A quick and simple guide to investment accounts for beginners.

Shirley Liu
Shirley Liu

Updated

Fact checked

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. Read about the different types of investment accounts, the benefits and the risks.

What is an investment account?

An investment account is a broad term applied to any kind of account that gives you a financial return. 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.

Share Trading Account Offer

IG Share Trading Offer

AUD 8

Standard brokerage - Australian shares

Share Trading Account Offer

Competitive broker fees on Australian shares, international shares, forex and CFD trading.

  • Brokerage - AU shares: From AUD 5 or 0.05%
  • Brokerage - US shares: USD 0
  • Sign-up process: Instant
  • Support - After hours: Yes
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Important: Share trading carries risk of capital loss.

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Data indicated here is updated regularly
Name Product Standard brokerage fee Inactivity fee Markets International
IG Share Trading
IG Share Trading
AUD 8
AUD 50 per quarter if you make fewer than three trades in that period
ASX shares
Global shares
Forex
CFDs
Margin trading
Yes
Brokerage discount: $5 on Australian shares for active traders & $0 commission on US and global shares
Enjoy some of the lowest brokerage fees on the market when trading Australian shares, international shares, forex and CFDs, plus get access to 24-hour customer support.
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eToro Share Trading (US stocks)
eToro Share Trading (US stocks)
USD 0
USD 10 per month if there’s been no login for 12 months
Forex
CFDs
US shares
Yes
Zero brokerage share trading on US 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 forex from the one account.
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Bell Direct Share Trading
Bell Direct Share Trading
AUD 15
No
ASX shares
mFunds
No
Invest in Australian shares, options and managed funds from the one account with no inactivity fee.
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.
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CMC Markets Stockbroking
CMC Markets Stockbroking
AUD 11
AUD 15 per month if you make no trades in that period
ASX shares
Global shares
Forex
CFDs
Margin trading
Options trading
mFunds
Yes
Access a broad range of investment products from Australia and overseas.
Invest in managed funds, trade shares, warrants, options and CFDs listed across the ASX, SSX and Chi-X, and other major global exchanges, including US, Canada and UK markets.
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More Info
ANZ Share Investing
ANZ Share Investing
AUD 19.95
No
ASX shares
Global shares
Margin trading
Options trading
Yes
Earn 1 Qantas Point per AU$3 spent on brokerage fees on certain instruments.
Access Morningstar reports, company announcements and and live pricing via ANZ’s share investing platform. Available for desktop and mobile.
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Westpac Online Investing Account
Westpac Online Investing Account
AUD 19.95
AUD 63.50 per year on the global markets account
ASX shares
Global shares
Options trading
US shares
More Info
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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 fee is the cost to trade $1,000 or less of ASX-listed shares and ETFs without any qualifications or special eligibility. If ASX shares aren’t available, the fee shown is for US shares.

Data indicated here is updated regularly
$
$
months
Name Product Maximum Variable Rate p.a. Standard Variable Rate p.a. Bonus Interest p.a. Fees Min Bal / Min Deposit Interest Earned
AMP SuperEdge Saver Account
AMP SuperEdge Saver Account
1%
0.8%
0.2%
$0
$0 / $0
New customers can earn an introductory rate of 1% p.a. for 6 months, reverting to an ongoing variable rate of 0.8% p.a. Earn interest on your SMSF funds.
More Info
ANZ SMSF Cash Hub
ANZ SMSF Cash Hub
0.5%
0.5%
0%
$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.
More Info
AMP SuperEdge Cash Account
AMP SuperEdge Cash Account
0.5%
0.5%
0%
$0
$0 / $0
Gain easy access to your funds while earning a competitive rate of interest with the AMP SuperEdge Cash Account.
More Info
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Data indicated here is updated regularly
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.
MyState Bank Online Term Deposit
MyState Bank Online Term Deposit
0.75%
0.75%
0.70%
0.85%
0.85%
1.00%
1.05%
Single or joint account-holders can apply online with MyState's online application process.
Pay no account setup or ongoing fees and choose a term length between 3 months and 2 years, with interest paid at maturity.
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More Info
Citibank Term Deposit $10,000
Citibank Term Deposit $10,000
0.70%
-
-
0.70%
-
0.70%
-
Suited to customers with deposits between $10,000 and $249,999.
This term deposit is for new Citibank customers only
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More Info
Citibank Term Deposit 250K
Citibank Term Deposit 250K
1.00%
-
-
1.00%
-
-
-
A short-term investment option with a guaranteed rate of return.
Suited to customers with deposits over $250,000.
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More Info
ME Term Deposit
Finder Award
ME Term Deposit
1.00%
1.00%
1.00%
1.00%
1.05%
1.15%
1.15%
You can link the ME Term Deposit with the transaction account of your choice, at any other Australian financial institution. Choose whether to have interest paid annually, monthly or at maturity.
More Info
Judo Bank Term Deposit
Judo Bank Term Deposit
1.36%
-
-
1.41%
-
1.40%
1.50%
Earn a 0.10% p.a. loyalty bonus when you roll over your term.
The Judo Bank Term Deposit term lengths range from three months to five years. Minimum opening deposit is $1,000. No account-keeping or set-up fees to pay.
More Info
Macquarie Bank Term Deposit
Macquarie Bank Term Deposit
0.65%
0.65%
-
0.70%
-
0.75%
0.75%
Lock in an interest rate for up to 5 years with a Macquarie Bank Term Deposit. This account is available to personal customers, as well as business customers and trustees.
More Info
Bank of Queensland Term Deposit
Bank of Queensland Term Deposit
0.75%
0.70%
0.70%
0.85%
0.70%
0.95%
0.95%
More Info
AMP Term Deposit $25,000+
AMP Term Deposit $25,000+
0.55%
0.55%
0.55%
0.80%
0.80%
0.80%
0.80%
Lock your money with AMP Bank Term Deposit Account and enjoy a great competitive rate with no fees.
More Info
CUA Term Deposit Account
CUA Term Deposit Account
0.85%
0.85%
0.85%
0.90%
0.85%
0.95%
1.00%
No account set-up fees or ongoing fees to pay.
The CUA Term Deposit offers a large range of term lengths from 1 month to five years. Minimum opening deposit is $5,000.
More Info
AMP Term Deposit $5000+
AMP Term Deposit $5000+
0.35%
0.35%
0.35%
0.60%
0.60%
0.60%
0.60%
Lock your money with AMP Bank Term Deposit Account and enjoy a great competitive rate with no fees.
More Info
ANZ Term Deposit
ANZ Term Deposit
0.20%
0.20%
0.20%
0.20%
0.20%
0.25%
0.45%
Pay no account-keeping or application fees.
Invest your funds for up to 5 years and receive a competitive rate of interest.
More Info
Commonwealth Bank Term Deposit
Commonwealth Bank Term Deposit
0.40%
0.45%
0.45%
0.50%
0.55%
0.70%
0.80%
Choose between a range of term lengths from just one month to five years, and receive a fixed interest rate on your funds. Invest from $5000 to $1,999,999.
More Info
Westpac Term Deposit
Westpac Term Deposit
0.55%
0.60%
0.65%
0.65%
0.70%
0.80%
0.90%
Enjoy flexible repayment and reinvestment options at the end of the term with no setup or service fee.
More Info
NAB Term Deposit
NAB Term Deposit
0.60%
0.60%
0.60%
0.65%
0.70%
0.85%
0.90%
Invest your money in a NAB Term Deposit and earn a fixed interest rate for the life of the term, with no setup or account fees. This term deposit is for personal customers with deposits from $5,000.
More Info
ANZ Advance Notice Term Deposit (31 days notice required for early withdrawals)
ANZ Advance Notice Term Deposit (31 days notice required for early withdrawals)
0.65%
0.55%
0.55%
0.65%
0.55%
0.75%
0.75%
More Info
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Data indicated here is updated regularly
$
$
months
Name Product Maximum Variable Rate p.a. Standard Variable Rate p.a. Bonus Interest p.a. Fees Min Bal / Min Deposit Interest Earned
ANZ Premium Cash Management Account
ANZ Premium Cash Management Account
0.1%
0.1%
0%
$0
$1,000 / $10,000
Ongoing, variable 0.1% p.a. when you link to access card from ANZ. Available on balances $10,000 and more.
More Info
Macquarie Cash Management Account
Macquarie Cash Management Account
0.3%
0.3%
0%
$0
$5,000 / $0
Receive dividend payments, track your investments spending and pay no account keeping fees. Earn 0.3% p.a. on the entire balance.
More Info
Bank of Queensland Cash Management Account
Bank of Queensland Cash Management Account
0.15%
0.15%
0%
$5
$1 / $1
Earn an ongoing variable 0.15% p.a. while also having easy access to your funds.
More Info
IMB Cash Management
IMB Cash Management
0.05%
0.05%
0%
$0
$0 / $5,000
Ongoing, variable 0.05% p.a. Available on balance $5000.00 to $9999.99.
More Info
Community First CU Money Market Account
Community First CU Money Market Account
0.05%
0.05%
0%
$0
$0 / $5,000
Ongoing, variable 0.05% p.a. for deposits $10,000 to $19,999 Interest rates are tiered, with higher interest rates available on larger deposits.
More Info
NAB Cash Manager
NAB Cash Manager
0.05%
0.05%
0%
$0
$0 / $5,000
Ongoing, variable 0.05% p.a. Available on the entire balance.
More Info
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Data indicated here is updated regularly
$
$
months
Name Product Maximum Variable Rate p.a. Standard Variable Rate p.a. Bonus Interest p.a. Fees Min Bal / Min Deposit Interest Earned
Border Bank Online Supersaver
Border Bank Online Supersaver
0.1%
0.1%
0%
$0
$0 / $0
Ongoing, variable 0.1% p.a. Available on balances $500-$5000
More Info
Border Bank Online Supersaver
Border Bank Online Supersaver
0.5%
0.5%
0%
$0
$0 / $0
Ongoing, variable 0.5% p.a. Available on balances $500-$5000
More Info
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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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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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