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Pensioner deeming accounts

Deeming accounts allow you to invest your money for a fixed return when you're retired.

Rebecca Pike's headshot

By

Rebecca Pike

Edited by

Joelle Grubb

Updated

Fact checked

How does deeming work?

Deeming is a key part of the pension system. Deeming is used to work out an assumed income created from your financial assets. The main type of financial assets are:

  • Savings accounts and term deposits
  • Managed investments, loans and debentures
  • Listed shares and securities
  • Some income streams
  • Some gifts you make

Services Australia will include any deemed income in calculating pension payments. Deeming rules are in place to give retirees an incentive to invest savings to generate more retirement income.

What is a deeming account?

Deeming accounts are bank accounts for over 55s and pensioners. They should return interest in line with the government's set deeming rates, and this income is what is used to calculate pension payments.

Bank accounts and savings accounts are among some of the most popular deeming accounts. Retiree share trading, cash management and term deposit accounts are also deeming accounts. However, some accounts seemingly marketed at retirees or pensioners don't necessarily guarantee returns at the deeming rates.

What is a deeming rate?

The deeming rate is the expected rate of return from different financial investments based on the amount invested. If the financial investment pays more than the deeming rate, the extra income is not assessed by the government and pension payments stay the same. Deeming rules are in place to give retirees an incentive to invest savings to generate more retirement income.

Deeming rates change every couple of years. They are much lower now than in the past, reflecting the record low interest rates. A lower deeming rate means more money for pensioners.

What are the deeming rates?

There are 2 deeming rates. They depend on your specific circumstances.

For financial investments up to $53,600 in value for singles; up to $89,000 combined for couples with at least 1 pension; and up to $44,500 in value per person for couples with no pension.0.25%
For financial investments above $53,600 in value for singles; above $89,000 combined for couples with at least 1 pension; and above $44,500 in value per person for couples with no pension.2.25%

Finder survey: How many Australians have planned for their retirement?

Response
No77.95%
Yes22.05%
Source: Finder survey by Pure Profile of 1016 Australians, December 2023

What are the types of deeming accounts?

Transaction accountsTerm depositsSavings accounts
Get full access to your money and benefit from a number of free transactions every month.Lock in your money for a fixed return. Compare term deposits by SMSF and retirement friendly features.Pensioner savings accounts are fee free, open to people 55 and over or receiving a government pension.

Who is eligible for a deeming account?

You can apply for a deeming account if you're over 55 and you're claiming a government pension. These accounts are investment products, there is no credit check. As well as meeting pension or age eligibility requirements, you’re also asked to provide identification such as your driver's licence and Medicare card.

Our guide on eligibility requirements for the aged pension.

Check the product's terms for a full list of application requirements before you open an account.

  • Be over the age of 55
  • Receive a government pension: age, disability, service or carers pension
  • Have an Australian residential address

What documentation or paperwork will I need before applying?

You can research, compare and apply for different deeming accounts online. As a new customer you can verify your identity online in most cases too. You may be asked to fax or email a copy of your ID and in some cases you may need to visit a branch to verify your identity with the account provider.

  • Current state or territory driver's licence or proof of age card
  • Medicare card
  • Tax file number
  • SMSF details if applicable

How to apply for a deeming account

Follow the links on this page to apply for one of the accounts in our comparison tables. You’ll be redirected to the account provider’s website where you’ll able to complete a secure online application in 10 minutes.

Once you’ve submitted your application for a deeming account, you’ll be contacted by the account provider on the email you provided about the next steps. You may need to provide further identification. Once your identity has been verified you’re free to make a deposit into the investment account.

Information you might find helpful

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To make sure you get accurate and helpful information, this guide has been edited by Joelle Grubb as part of our fact-checking process.
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Written by

Senior writer

Rebecca Pike is Finder's senior writer for money. She joined Finder after almost four years writing for business publications in the mortgage and finance industry, including three years as editor of Mortgage Professional Australia. She regularly appears as a money expert on programs like Sunrise and Today, as well as across radio and newspapers. She also holds ASIC-recognised certifications in Tier 1 Generic Knowledge and Tier 2 General Advice Deposit Products. See full bio

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Rebecca has written 184 Finder guides across topics including:
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8 Responses

    Default Gravatar
    ThereFebruary 8, 2018

    Can I open a deeming account as I don’t receive a pension but have a concession card

      AvatarFinder
      MayMarch 1, 2018Finder

      Hi,

      Thanks for your inquiry.

      The deeming account is only available to people who are over 55 and are claiming a government pension. I’m afraid that having a concession card will not qualify you to open such an account. Nevertheless, you may consider seeing other bank accounts to compare your options. On the page, is a comparison table you can use to see which account suits you. When you are ready, you may then click on the “Go to Site” button to be redirected to the bank’s website where you can proceed with your application or get in touch with their representatives for further assistance.

      Hope this helps.

      Cheers,
      May

    Default Gravatar
    LYNNNovember 7, 2016

    If i have a pensioner savings account does the ATO take a percentage of the interest that i earn yearly, if so why.

      AvatarFinder
      DeeNovember 7, 2016Finder

      Hi Lynn,

      Thanks for your question.

      When you file your income tax return at the end of each financial year, you need to declare all your sources of income including the interest earned on your savings account.

      Cheers,
      Anndy

    Default Gravatar
    WendyJuly 1, 2016

    When will the deeming rates used by Centrelink for 2016 be reassessed?

      AvatarFinder
      ClarizzaJuly 4, 2016Finder

      Hi Wendy,

      Thanks for your question. The asset value thresholds which are used to determine deeming rates, are adjusted annually on the 1st of July. Note however that the actual deeming rate may change periodically.

      I hope this helps.

      Clarizza

    Default Gravatar
    kenJune 3, 2016

    I am on age pension.I do share trading with some gains and losses.
    1. am I required to report this to centrelink
    2. how is this to be reported and when

      AvatarFinder
      ShirleyJune 6, 2016Finder

      Hi Ken,

      Thanks for your question.

      You are required to report to Centrelink if you receive income from those shares. This could include dividends.

      You may refer to Services Australia’s employment income reporting for information on how and when to report your income. I’d recommend that you contact Centrelink directly to confirm if you need to report dividends.

      Cheers,
      Shirley

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