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SMSF bank accounts
You need to open a dedicated SMSF bank account for your self-managed super fund to manage your fund’s expenses and accept contributions from members. Here's how to do it.
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What is an SMSF bank account?
An SMSF bank account is a type of bank account that's designed specifically for SMSFs, to help manage the fund's day-to-day finances. It's where you can receive member contributions, employer contributions and income from investments such as rent payments. You can also use this account to pay for fund expenses such as administration, legal and accounting fees.
Similar to how a joint bank account works, SMSF bank accounts enable all SMSF members to access the account (SMSFs can have up to 4 members).
SMSF bank accounts can also offer linked trading accounts, so you can easily place trades on the share market and settle the trade directly from the SMSF bank account.
Why do I need an SMSF bank account?
Having an SMSF bank account is a good way to manage your fund's expenses and member contributions all in one place. As each member of the fund will have equal access to the account, it's an easy way for all members to keep on top of the fund's finances.
Not only does an SMSF bank account make managing the fund's finances easier, it's actually a legal requirement for SMSFs. Members are required to keep their personal finances separate from their SMSF funds. This means you can't simply use your existing everyday transaction account for your SMSF, as it'll contain a mix of your own personal funds as well as the SMSF's funds.
You aren't required to have a separate SMSF bank account for each fund member. However, you must keep a record of each member's contributions to the bank account and the fund, and also keep a record of the fund investment earnings allocated to each member. Your SMSF advisor or accountant can help with this.
Features of an SMSF bank account
Here are some of the key features of an SMSF bank account:
Joint access. SMSF bank accounts allow all members access to the account, so all members can keep an eye on the fund's finances, make contributions and pay expenses.
Interest-earning. Some SMSF accounts pay interest on the cash in the account.
Seamless investing. SMSF bank accounts are usually linked to an online investment account with the same bank, which allows for quick and easy trading.
Pay your fund expenses. Your SMSF will have ongoing expenses to pay that relate to the management of the fund, for example accountant fees, annual audit fees and lawyer fees.
Earn income from investments. You can receive income from your fund's investments into the SMSF bank account, for example rental payments from an investment property owned by the fund.
Accept member contributions. An SMSF bank account can accept contributions from members of the SMSF and will allocate investment earnings to each member based on their contributions.
Pay for assets. If your SMSF buys assets like property, art, antiques or collectibles you can use the money in the SMSF account for the purchase.
Tax and financial reporting. You can give your accountant access to the account transaction history to help with accurate tax reporting.
How to choose an SMSF bank account
Consider the following when comparing SMSF bank accounts:
The fees. Check for any account keeping fees applied to the bank account as well as fees charged on any linked accounts, like investment accounts.
Linked accounts. Check what linked accounts you get with the bank account, if any. Having a linked investment account could be really convenient, and some will even offer discounted brokerage on trades when you link an investment account.
Account access. Can all SMSF members access the account, and can the account be managed by a corporate trustee if that's the structure of your fund? Also, can you use Internet banking and mobile banking?
Interest earned. If your SMSF is likely to have large amounts of cash sitting in the account, choosing one that pays interest could be beneficial.
Minimum balance requirements. Does the SMSF bank account have a minimum opening balance or a minimum ongoing balance requirement to meet? If it does, make sure your SMSF can meet this condition.
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How to open an SMSF bank account
Once you've selected the account you'd like to open you can start the application process. Some SMSF bank accounts can be applied for and opened online, while others will require you to visit a branch or to speak with the bank over the phone to get set up.
Before you start the application process make sure you have the following details handy, as you'll be required to supply these:
The name of your SMSF
The SMSF's Australian Business Number (ABN)
The SMSF's Tax File Number (TFN)
The names of each member and their residential addresses
ID documents for each member
The name and Australian Company Number (ACN) of the corporate trustee (if you have one)
Or, if you haven't yet established your SMSF and don't have any of the details above, take a look at our six-step guide to setting up an SMSF to get started.
Can I open a business bank account for my SMSF?
Some banks don't offer dedicated SMSF bank accounts, but will instead allow SMSFs to open a business bank account for their fund. This is because SMSFs operate as a trust, and many business bank accounts are able to be opened by trusts.
Make sure you check with the bank you're considering whether or not you can open a standard business bank account as an SMSF customer or not.
Next steps after opening an SMSF bank account
Get on top of your fund's admin. Managing an SMSF comes with a fair deal of admin, which could quickly snowball if you don't stay of top of it. There are SMSF administration services available to help you set up and manage your fund's admin ongoing.
Set a clear investment strategy. You need to have a documented SMSF investment strategy in place before you start investing with your fund. This is not only a legal requirement, but will also help you and the other fund members determine what your investment preferences and goals are, and how to achieve them. Your investment strategy should consider the growth asset classes you'll invest in, such as shares and property, as well as the defensive assets such as bonds and SMSF term deposits.
Compare SMSF home loans (if you're planning to invest in property). Lots of SMSFs choose to invest in residential property to generate rental income and benefit from capital growth. It's a major drawcard of starting an SMSF, as you aren't able to do this with a traditional super fund. If your SMSF decides it will be investing in a property, compare SMSF home loans to see what the current rates are.
SMSF bank account FAQs
You can open more than 1 bank account for your SMSF if you'd like to. You might decide it's more convenient to have a different bank account for different fund members, or for different purposes (e.g.: 1 could be for accepting income and investment earnings, 1 could be for accepting contributions). However, with more bank accounts come more admin to manage.
Yes, you need to have some form of dedicated bank account or cash account for your SMSF in order to accept contributions, receive income and make payments. You're legally required to keep your SMSF money completely separate from your personal money. This means you can't use your personal bank account for SMSF transactions. You also can't open a standard personal bank account for use as an SMSF.
No, you can't use your personal bank account for your SMSF. This is because your personal income and your SMSF funds have different tax rules.
There are lots of pros and cons to opening your own SMSF as opposed to sticking with a standard super fund. To learn more about this, take a look at our guide on SMSF advantages to see if it's the right choice for you.
Alison Banney is the money editorial manager at Finder. She covers all areas of personal finance, and her areas of expertise are superannuation, banking and saving. She has written about finance for 10 years, having previously worked at Westpac and written for several other major banks and super funds.
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