What is a retirement savings account?

Here's how retirement savings accounts work and how they compare to regular super funds.

We’re reader-supported and may be paid when you visit links to partner sites. We don’t compare all products in the market, but we’re working on it!

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.

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

A retirement savings account acts like a superannuation account however it's provided by a bank, building society, credit union or life insurance company. It's run in a similar way to a regular savings account and does not follow a trust structure, making it different from a superannuation fund.

Although they aren't superannuation accounts, these accounts are in line with superannuation regulations and its tax advantages. However with a retirement savings account even your tax-free portion can earn interest. 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.

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.

What to look for in a retirement savings account

Comparing retirement savings accounts is similar to comparing regular bank accounts. You 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 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

Given the widespread use of the Internet, 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

  • Good way to save for retirement. A retirement savings account is a good way to start saving for retirement, given that you stand to earn higher returns when compared to conventional bank accounts. You can also choose how much you get paid and how often through flexible pension payment alternatives.
  • 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.

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?

Name Product Last 1 year performance Last 3 year performance Last 5 year performance Last 10 year performance Annual fees on $50k balance
Sunsuper Lifecycle Balanced
Sunsuper is an award-winning super fund with more than 1.4 million members. Its Lifecycle Balanced option invests your super in a mix of growth assets, and reduces your risk when you're near retirement.
Spaceship GrowthX
This is a high-risk investment option that aims to deliver high 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
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.
AustralianSuper - Pre-mixed, Balanced option
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.
QSuper Lifetime
QSuper is one of the largest profit-for-members funds in Australia. QSuper Lifetime continually adjusts your investment mix in line with your age and your super account balance.
UniSuper Balanced
UniSuper is an industry super fund and one of Australia's largest super funds with more than 450,000 members. Its Balanced option invests in a mix of different asset classes and has achieved consistently high returns for members.
Virgin Money Super - Lifestage Tracker
Virgin Money Super Lifestage Tracker has some of the lowest fees in the market. It invests in a range of different assets in line with your age, reducing your risk as you get older. Plus, you can earn Velocity Frequent Flyer Points when you rollover your super, and on the contributions you make (T&Cs apply).
Aware Super Growth
Aware Super is a not-for-profit fund with more than 750,000 members. The MySuper product invests your super in a pre-mixed Growth fund until you’re 60, then it’ll switch to Balanced.
HESTA Balanced Growth
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.
LUCRF MySuper Balanced
LUCRF Super is an industry super fund open to all Australians with 11 different investment options available. Its default MySuper Balanced option is a simple, diversified portfolio designed to suit most members.
Australian Catholic Super Lifetime - Grow
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.
Verve Super Balanced
Verve Super is an ethical super fund tailored for women. It seeks to invest in companies making a positive impact, such as renewable energy and women in leadership, while avoiding those that cause harm, such as fossil fuels, tobacco and guns.
AustralianSuper - Socially Aware
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. Investment performance as of 30 June 2020.
Aware Super - Diversified Socially Responsible Investment
The Aware Super Diversified Socially Responsible Investment is a pre-mixed investment option that excludes companies operating in the tobacco, ammunition, gambling, alcohol, forest logging and pornography industries, as well as companies that attribute 20% or more of their revenue to coal, oil and gas.
Sunsuper - Socially Conscious Balanced
Certified by the Responsible Investment Association Australasia.
The Sunsuper Socially Conscious Balanced option avoids investment in companies that have significant exposure (more than 5% of revenue) to alcohol, tobacco, gambling, pornography, coal and nuclear power manufacturing. Investment performance as of 30 June 2020.
HESTA - Sustainable Growth
HESTA Sustainable Growth is a pre-mixed, diversified investment option with a high to very high risk level. The investment managers take into account the social and environmental impact of the companies in which it invests, and excludes investment in tobacco, fossil fuels, uranium and weapon manufacturing. Investment performance as of 30 June 2020.

Compare up to 4 providers

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 data is for the period ending June 2021.

Did you have these questions?

Do I have to pay any fees to make the switch?

This depends on the service provider you chose, and some may require that you pay a switch fee.

Can I apply for a retirement savings account online, and if so, how long does the process take?

Yes, you can submit an online application. If you have the required information close by, you can complete the application in minutes.

I’ve just changed my job. Can I continue using my existing superannuation account?

Yes, you can. You simply have to notify your new employer of your choice.

More guides on Finder

Ask an Expert

You are about to post a question on finder.com.au:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms of Use, Disclaimer & Privacy Policy and Privacy & Cookies Policy.

10 Responses

    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!


    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.


    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.


    Default Gravatar
    JohnJuly 30, 2017

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

    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.


Go to site