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What is a retirement savings account?

Retirement savings accounts are not very common these days, however there are still a few available. Here's how retirement savings accounts work and how they compare to regular super funds.

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Retirement savings accounts are becoming increasingly rare, as the majority of Australians now open a superannuation account when they join the workforce. However, there are still some retirement savings accounts in the market, so this guide will outline how they work and how they compare to super funds.

What is a retirement savings account?

A retirement savings account is a type of account provided by a bank, building society, credit union or life insurance company. It's run in a similar way to a regular savings accounts, however it's designed for your retirement savings and you can't access the money until you're retired.

Typically a retirement savings account awards a higher rate of interest in comparison to a regular savings account, as the purpose of the account is to help you save for retirement. Once you've met a condition of release or reach your preservation age, you can start drawing down on your fund.

Not many banks offer retirement savings accounts anymore, since superannuation funds became compulsory for employees.

How is a retirement savings account different to a super fund?

Although they aren't superannuation accounts, retirement savings accounts do fall within superannuation regulations and the tax advantages that come with that. However with a retirement savings account even your tax-free portion can earn interest.

A super standard balanced or growth super fund will usually offer far higher returns than a retirement savings account. This is because super funds invest a large portion of your balance into shares, which are high return but also much higher risk.

Unlike the money in your super fund which is subject to the market performance, the money in your retirement savings account is covered by the bank guarantee scheme. While these accounts do sit within the superannuation regulations, they don't follow a trust structure, making it different from a superannuation fund.

Which bank's offer retirement savings accounts?

According to APRA, these banks still offer retirement savings accounts (as of July 2020). Some aren't open to new customers.

  • Commonwealth Bank of Australia (closed to new customers)
  • Qudos Mutual
  • Queensland Country Credit Union
  • Police and Nurses Limited
  • Police Financial Services Limited(closed to new customers)
  • Defence Bank Limited
  • Heritage Bank Limited
  • Australian Military Bank Ltd

What to look for in a retirement savings account

As we said earlier, there are very few retirement savings accounts available today. If you do want to open one, look for the following:

Competitive interest rate

A higher rate of interest will help your retirement savings work harder. This is especially true if it's compounded daily. However even with a high interest rate on your retirement savings account, you'll likely earn much better returns with a superannuation fund that is actively investing your balance.

No fees

To ensure that every dollar you deposit helps you save for your retirement, you should look for a retirement savings account that changes no account keeping fees and no annual fees.

Account access

Your retirement savings account provider should let you view your account details online or via a mobile banking app. Some service providers offer online tools that allow users to search for their lost super, which they can then transfer to their new accounts.

What are the pros and cons of using a retirement savings account?

The pros

  • Less risk. A retirement savings account has much less risk than investing your super into a standard super fund.
  • Tax advantages. A retirement savings account offers the same tax advantages as a superannuation account.
  • No fees. Most retirement savings accounts do not charge any joining fees, ongoing account keeping fees, administration fees and commissions.

The cons

  • Not that common anymore. Retirement savings accounts were initially introduced as a way to help Australians save for retirement, before everyone had a superannuation account. These accounts are becoming increasingly more redundant as the superannuation system matures.
  • Low returns. These accounts will generate much lower returns on your money than other superannuation products. Even a conservative super fund option would likely deliver much better returns than a retirement savings account.

Tips for using a retirement savings account

  • Read the terms and conditions

Make sure you go through the product disclosure statement (PDS) before signing up for any retirement savings account. The summary page of this document should give you a clear indication of any applicable fees and charges.

  • Compare against super funds

Before opening a retirement savings account, compare similar accounts in the market to ensure you're finding the most suitable account for your needs. It's also important to compare these accounts against standard superannuation accounts. In particular, you can gauge how competitive the interest rate on your retirement savings account is when compared to the sorts of returns super funds typically deliver to their members. It is worth noting, however, that the return on funds invested into a standard super account is in no way guaranteed. Ultimately, it's up to you to decide the which strategy works best for you and your retirement plans.

Have you considered a super fund instead?

1 - 16 of 37
Name Product Last 1 year performance (p.a.) Last 3 year performance (p.a.) Last 5 year performance (p.a.) Last 10 year performance (p.a.) Fees on $50k balance (p.a.)

Virgin Money Super - LifeStage Tracker

Virgin Money Super - LifeStage Tracker
+17.29%
+13.78%
+10.07%
New Fund
$392
This is a high-risk investment option that aims to deliver higher returns over the long term.

Virgin Money Super LifeStage Tracker is a lifestage super product, so your mix of investments will be continually readjusted in line with your age. This means you'll be invested in more growth assets while you're young.

HESTA Balanced Growth

HESTA Balanced Growth
+14.54%
+10.74%
+9.07%
+9.69%
$528
HESTA is an industry super fund for the health and community services sector and open to all Australians. The Balanced Growth fund invests in a mix of asset classes without taking on too much, or too little, risk.

Australian Retirement Trust (formerly Sunsuper for Life) - Lifecycle Balanced Pool

Finder Award
Australian Retirement Trust (formerly Sunsuper for Life) -  Lifecycle Balanced Pool
+16.31%
+11.45%
+9.58%
+10.14%
$628
Sunsuper and QSuper have merged to create Australian Retirement Trust, one of Australia's largest super funds with more than 2 million members. Its Lifecycle Balanced product invests your super in a mix of growth assets, and reduces your risk when you're near retirement.

AustralianSuper - Pre-mixed, Balanced option

Finder Award
AustralianSuper - Pre-mixed, Balanced option
+15.02%
+12.42%
+10.31%
+10.66%
$472
AustralianSuper is an award-winning industry super fund and the largest super fund in Australia. The Balanced fund invests in a mix of different assets like shares, property and cash.

Spaceship GrowthX

Spaceship GrowthX
+12.31%
+19.14%
New Fund
New Fund
$536
This is a high-risk investment option that aims to deliver higher returns over the long term.
Spaceship's GrowthX fund invests heavily in technology ETFs with high exposures to Australian and international shares. Performance figures and fees supplied by Spaceship, not Chant West.

Australian Ethical Super Balanced

Green Company
Australian Ethical Super Balanced
+13.19%
+12.82%
+9.71%
+9.78%
$622
Certified by the Responsible Investment Association Australasia.
Australian Ethical seeks to invest in companies that have a positive impact on the planet, people and animals, such as renewable energy and healthcare while avoiding investments in coal, oil, tobacco and gambling.

QSuper Lifetime - Aspire 1

QSuper Lifetime - Aspire 1
+12.67%
+10.33%
+9.03%
New Fund
$360
QSuper is part of Australian Retirement Trust. QSuper Lifetime automatically adjusts your investment mix in line with your age and your Lifetime account balance. Eligibility criteria and conditions apply to open a QSuper account (refer to 'More Info').

Aware Super High Growth

Aware Super High Growth
+18.15%
+14.45%
+11.63%
+11.83%
$694
This is a high-risk investment option that aims to deliver higher returns over the long term.
If you join Aware Super's default MySuper Lifecycle option your super will be invested in the High Growth option while you're under 55, giving more exposure to local and international shares.

Australian Catholic Super Lifetime - Grow

Australian Catholic Super Lifetime - Grow
+13.2%
+10.02%
New Fund
New Fund
$488
A Catholic super fund open to all Australians and designed for people working in Catholic education, healthcare or aged care.The Lifetime One fund option changes your investment mix as you get older.

AustralianSuper - Socially Aware

AustralianSuper - Socially Aware
+14.97%
+10.9%
+9.05%
+10.1%
$501
The AustralianSuper Socially Aware option doesn't invest in Australian or international companies that directly own coal and fossil fuel reserves, produce tobacco or those which have single-gender boards.

Bendigo SmartStart Super - Growth Index

Bendigo SmartStart Super - Growth Index
+14.46%
+12.38%
+9.08%
+10.4%
$338
Bendigo SmartStart is a retail super fund. The Growth Index Fund is the default MySuper option for members under 55.

Kogan Super - Enhanced Indexed Growth

Kogan Super - Enhanced Indexed Growth
+14.81%
New Fund
New Fund
New Fund
$332
Kogan Super offers low-fee, high-performing indexed investment options that are managed by Mercer, Australia's largest super administrator. The Enhanced Indexed Growth product invests around two thirds of your balance into Australian and global shares.

Australian Catholic Super Bonds

Australian Catholic Super Bonds
-1.66%
+3.98%
+3.87%
+3.83%
$278

Australian Catholic Super Conservative

Australian Catholic Super Conservative
+6.86%
+6.56%
+5.55%
+6.17%
$463

Australian Catholic Super Conservative Balanced

Australian Catholic Super Conservative Balanced
+10.43%
+8.31%
+6.77%
+7.47%
$478

Australian Catholic Super Growth

Australian Catholic Super Growth
+15.54%
+11.3%
New Fund
New Fund
$488
This is a high-risk investment option that aims to deliver higher returns over the long term.
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The information in the table is based on data provided by Chant West Pty Ltd (AFSL 255320) which is itself supplied by third parties. While such information is believed to be accurate, Chant West does not accept responsibility for any inaccuracy in such information. Chant West’s Financial Services Guide is available at https://www.chantwest.com.au/financial-services-guide . Finder offers no guarantees or warranties about the data and we recommend that users make their own enquiries before relying on this information. Performance, fees and insurance data is based on each fund's default MySuper product. Where the performance, fees and insurance data for the MySuper fund vary according to the member's age, results for individuals between 40-49 years of age have been shown. Past performance is not a reliable indicator of future performance.

*Past performance and fee data is for the period ending December 2021.

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10 Responses

  1. Default Gravatar
    PetraApril 2, 2019

    Which banks/institutes still have retirement savings accounts?

    • Avatarfinder Customer Care
      JohnApril 3, 2019Staff

      Hi Petra,

      Thank you for reaching out to Finder.

      You may refer to our list of savings accounts with compound interest. The page provides a list of banks that may assist you further in saving for your retirement. You can also check our guide about retirement savings accounts to know your other options. Hope this helps!

      Cheers,
      Reggie

  2. Default Gravatar
    RodoFebruary 12, 2019

    which institutions offer Centrelink compliant Pensioner Deeming Accounts?

    • Default Gravatar
      NikkiFebruary 13, 2019

      Hi Rodo,

      Thanks for getting in touch!

      We have a page that shows pensioner deeming accounts. The page has a table you can use to find the account that suits you. Hope this was helpful.

      Best,
      Nikki

  3. Default Gravatar
    NeilMay 1, 2018

    Can a young worker with part-time employment arrange for Employer contributions to be remitted to a Retirement Savings Account? This would be to save administration costs which otherwise consume all the contributions over a year. If the answer is yes can the balance in the RSA be transferred later to a Super Fund when employment become full time, contributions more meaningful and the need for insurance more of an issue.

    • Default Gravatar
      NikkiMay 3, 2018

      Hi Neil,

      Thanks for your message and for visiting Finder.

      To answer your question, – Yes, a young worker with part-time work can start saving for a retirement savings account and later on transfer to a super fund when the employee becomes full time.

      RSA’s are in line with superannuation regulations and their tax advantages. Even your tax-free portion can earn interest, helping you through retirement. Once you’ve met a condition of release, you can organize for your super fund balance to be transferred to a retirement savings account, where you can start drawing down on your fund. A good RSA should ease your transition into retirement and it should provide you with a regular income when you retire.

      Hope this helps! Feel free to message us anytime should you have further questions.

      Cheers,
      Nikki

  4. Default Gravatar
    JohnJuly 30, 2017

    Apart from a superannuation fund, are there any other options to create a private pension?

  5. Default Gravatar
    JulietOctober 11, 2016

    My only super account was closed due to bad mail redirection and the balance was sent to the ato. I contacted the ato and they said I should open a retirement savings account which has less fees. I don’t know much about super and rsa’s as I have spent most of my life unable to work much. What should I do to get this small amount 2000 as I now have a terminal disease. and need this money. The ato says they wont release it until I am 65 but I am not likely to make it to that age

    • Avatarfinder Customer Care
      ClarizzaOctober 12, 2016Staff

      Hi Juliet,

      Sorry to hear about your situation.

      If your account was closed, it may have been transferred to another super fund that holds unclaimed super or transferred to the ATO.

      You can log into myGov via the ATO website to find the super and organise to transfer it to your account. Otherwise, our guide on finding unclaimed super may also be of help.

      Regarding a retirement savings account, it works like a savings account but generally with a higher rate of interest. You can transfer your super into this account.

      Hope this has helped.

      Clarizza

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