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Shares versus superannuation: Where should you invest?

Unsure whether to use your extra income to contribute to your super or buy shares? Here are some benefits of each.


Fact checked

If you've got some money that you'd like to invest, you could find yourself wondering which is the better option: buying shares or topping up your superannuation. Both are a form of investing, and each option comes with its own advantages and disadvantages. Read on to learn more about the differences between these investment options in this guide.

Earn interest on your SMSF cash balance with a SMSF Savings Account

Data indicated here is updated regularly
Name Product Maximum Variable Rate p.a. Standard Variable Rate p.a. Bonus Interest p.a. Fees Interest Earned
AMP SuperEdge Saver Account
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.
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.
AMP SuperEdge Cash Account
Gain easy access to your funds while earning a competitive rate of interest with the AMP SuperEdge Cash Account.

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What are shares?

When you purchase shares, you get part ownership (or a share) of a particular company. You can't buy shares in any company, only those which are publicly listed on the Australian Stock Exchange (ASX).
As with any company, it can perform well or poorly. When a company performs strongly, the price of its shares rise. This is good news for investors as the value of their shares has increased. This is referred to as capital growth, and means that you can sell the shares for more than what you initially paid for them. However, if the company performs poorly, the value of the shares decreases.

What are dividends?

In addition to the value of the shares increasing, many companies will also pay shareholders a dividend, which is basically a share of the company's profits. The amount you receive as a dividend payment will be directly related to how many shares in the company you hold. If you invest in enough shares, you could create a second income stream out of the dividend payments alone.

Keep in mind that a company isn't required to pay shareholders a dividend when it's doing well. A company may decide to re-invest that money back into the company to help it grow and thrive. This is also good for shareholders since it means the value of the company will increase over the long term as will its shares.

What is superannuation?

Superannuation is a way to save for your retirement and is basically one big investment portfolio. Your employer is required by law to pay a portion of your earnings into your designated super fund, which is managed on your behalf. The money in your superannuation is invested into various assets, including shares, with the main aim of growing your balance over time.

As the main purpose of superannuation is to fund your retirement and to be a substitute for the Age Pension, you typically cannot access it until you're retired. There are some rare situations where you're able to access your super early, which you can read more about here.

What to consider when choosing between shares and superannuation

There are a few factors to consider when deciding to invest in shares or contribute to your super.

Economic conditions

Shares and super are both dependent on wider economic conditions. Both are investments so the performance returns can change depending on the economy. That's why when you have shares and/or super, it's best to regularly check the performance of the company and the super fund so you know your money isn't losing value.

Super is a long-term investment, so short-term declines and dips in the economy won't affect it too much unless the economy continues to decline. The long-term nature of super means it is well placed to ride out any waves and dips in the market.

However for some shares, if it's a short- to medium-term investment, the direct impact of market conditions can seriously affect the value of your shares. This is especially true in a volatile market or during times of economic or political uncertainty. However, if you plan to hold your shares for the long term (for example 7-10 years or more), your investment will be better placed to overcome small dips in the market.


Diversification is an important strategy for an investor to minimise risk. Superannuation is typically more diversified since it invests in a whole range of assets from cash and shares to property and government bonds.

However, you can still achieve a relatively diversified portfolio when investing in shares by making sure your investments are in different industries. For example, having a mix of Australian shares, international shares, shares in technology companies, shares in blue chip companies and even shares in companies that invest in shares (these are called Listed Investment Companies) and so on. That way, if the entire technology industry suffers, you don't have all your shares in that sector alone.

Your risk tolerance

Typically, the more risk you're willing to take, the greater reward you get if all goes well. If you invest in shares, there is quite a lot of risk involved, especially if you are new to the stock exchange. Unless you have a financial adviser helping you through the process, you'll have to manage most of your shares yourself, which can be tricky when you're first starting out.

With super, your money is managed by the fund and it decides how to invest your money. There can be less risk involved with super since it's managed by a fund, but you still have the option of choosing a more risky option if you want it.

However, while shares may be more risky, there's also the potential to earn more money in the form of dividends or capital growth in the short term, which could be appealing. It depends what your strategy is, and what you want to achieve from your investment.

Your investing expertise

Your level of investment expertise may affect your decision as to where to invest your extra money. Superannuation is managed for you on your behalf, so if you have no investment experience and aren't interested in learning, it could be best to contribute to your super instead of buying shares.

However, if you do have some investment experience or have done some research, shares could be a great option. Just be prepared to stay engaged. This means monitoring the share price, keeping up-to-date with the company and staying on top of broader market and economic conditions.

Your age matters

Age is a big factor when determining if you should go for shares or put your money into your super. Anyone who owns shares will receive their returns without restriction. You may receive dividends or sell your shares for a higher price whenever you choose. Theoretically, shares are a long-term investment if you want to make a decent return, so investing in shares when you're about to retire may not be a good idea.

On the super side of things, you have to wait until you retire before you start accessing your benefits. So if you're young and want to access your returns immediately or sooner rather than later, investing in shares may be a better idea. However, if you prefer to save for a more comfortable retirement, putting your money into super will be a better way to guarantee safer returns.

Investing in shares over your super: pros and cons


  • Individual ownership of the shares.
  • You get dividend payments.
  • You get capital growth.
  • You have complete control over your investment decisions.
  • You can sell at any time.


  • Shares are less diversified than superannuation.
  • They are generally a higher risk.
  • They require a greater level of engagement and more expertise.

Compare Share Trading Accounts

Data indicated here is updated regularly
Name Product Standard brokerage fee Inactivity fee Markets International
IG Share Trading
Finder Award
IG Share Trading
AUD 50 per quarter if you make fewer than three trades in that period
ASX shares, Global shares, Forex, CFDs, Margin trading
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.
eToro Share Trading (US stocks)
USD 10 per month if there’s been no login for 12 months
Forex, CFDs, US shares
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.
CMC Markets Stockbroking
AUD 11
ASX shares, Global shares, Forex, CFDs, Margin trading, Options trading, mFunds
$0 brokerage on global shares including US, UK and Japan markets.
Trade up to 9,000 products, including shares, managed funds, forex, commodities and cryptocurrencies, plus access up to 15 major global and Australian stock exchanges.
ThinkMarkets Share Trading
ASX shares, ETFs
Fast sign-up: Start trading in just a few minutes
Switch between your ASX share trading account and your forex account on your mobile and access some of the lowest brokerage fees on the market with a flat $8 commission (until $200,000).
ANZ Share Investing
AUD 19.95
ASX shares, Global shares, Margin trading, Options trading
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.
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

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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.

Investing in your super over shares: pros and cons


  • Your super is managed for you.
  • It's a more diversified portfolio than shares alone.
  • There is less risk involved.
  • You benefit from long-term growth.
  • Tax concessions are available.


  • You cannot access the funds until you're retired.
  • You have little to no control over where your money is invested.
  • There are limits as to how much you can contribute to your super.

Compare Super Funds

Name Product Past Performance - 1 Year Past Performance - 3 Years Performance - 5 Years Calculated fees p.a. on $50,000 balance
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.
Virgin Money Super - Lifestage Tracker
Virgin Money Super's Lifestage Tracker invests in a range of different assets in line with your age, reducing your risk as you get older, and has some of the lowest fees in the market.
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.
QSuper Lifetime - Aspire 1
QSuper is one of the largest member-owned funds in Australia. The QSuper Lifetime fund adjusts your investments each 7-10 years as you get older, so you're not taking on too much risk.
HESTA - Core Pool
HESTA is an industry super fund for the health and community services sector and open to all Australians. The Core Pool invests in a mix of asset classes without taking on too much, or too little, risk.
Spaceship GrowthX
Spaceship's Growth X fund invests heavily in Australian and international shares, with a focus on technology stocks. This is a high-risk investment option that aims to deliver high returns over the long term. Performance figures and fees supplied by Spaceship, not Chant West.
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.

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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 . 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 2019.

Self-managed super funds

An option for people with an interest in and time to dedicate to managing their finances is a self-managed super fund.

Self-managed super funds, or SMSFs, are effectively smaller super funds set up by individuals or groups, to manage their own super contributions and investments. All the decisions around how the money is invested are made by the individuals who set the fund up, who operate as both members and trustees of the fund.

There are several steps to setting up your own SMSF, as well as ongoing requirements around administration, compliance and reporting. You can read more about what's involved in setting up and managing an SMSF in our definitive guide on SMSFs. Once it's established, you can arrange to have your employer contributions paid directly into your SMSF. You can then decide how to invest the funds - whether that means buying shares, investing in a managed fund, or depositing funds into a high-interest savings account.

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6 Responses

  1. Default Gravatar
    EDWARDFebruary 23, 2019

    I have only 25,000 in my super. I need to try and grow my super. It’s with ANZ Bank and it’s not making anything. Do you think putting some money in shares make my money grow? I’m 59 years old and need to make this money grow can you help me?

    • Avatarfinder Customer Care
      JoshuaFebruary 25, 2019Staff

      Hi Edward,

      Thanks for getting in touch with Finder. I hope all is well with you. :)

      Whether to transfer your money from your bank account to shares or not would depend on your needs, preference, and budget. However, at this point in time, it would be a good idea to consider the pros and cons of each of your options.

      For example, when you invest in shares, bear in mind that it takes years for your money to grow. Not only that, but you also need to remember that like any investment, your money in shares can increase but it can also decrease.

      Please make sure that you consider the risk of buying shares. If it is a risk that you can afford to take, then, by all means, you might want to get into share trading.

      If you want, you can also speak to share trading experts. They should be able to give you more pieces of advice to help you make a better decision.

      I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.

      Have a wonderful day!


  2. Default Gravatar
    KevNovember 21, 2017

    Dear Sir/Madam,my wife and l a.own our own home wife has an investment property(positively geared..value $ $220k.) c.we are selling a property and should have circa $150,000 net d.our combined super is circa $1 mill. My wife(58) is undertaking transition to retirement(a teacher with defined benefit super)I,m 59 self employed…and love my work!…..q. a.should we invest the $150k into our separate super fund($75k each) or purchase a house(we live close in Toowoomba and could purchase a rental property for under $400k..q.b.with all the doom and gloom scenarios re. world economy do you believe we shall be able to have a good quality of life in retirement..? We are conservative folk from humble origins with simple tastes but do like to travel os….your counsel is valued, cheers

    • Avatarfinder Customer Care
      MayDecember 12, 2017Staff

      Hi Kev,

      Thanks for your inquiry and sorry for the delay. Just to confirm that you’ve reached finder, a leading comparison website and general information service. We’d be glad to offer you general advice to answer your questions.

      As we are not financial experts, we may not be able to advice as to how and when is the best time you can invest you super. It would be best that you speak to a financial planner who can help you achieve your financial goals and understand your needs. We have a guide on this page about seeking financial advice which you may find useful.


  3. Default Gravatar
    rof78@gmxNovember 7, 2016

    i am 62 thinking to retire .my husband 8=69. have b2 investment properties worth $1700.000 with a loan of $1000.000.want to sell one property ,but scare about c g t.How can avoid that capital gains tax

    • Avatarfinder Customer Care
      ClarizzaNovember 8, 2016Staff

      Hi there,

      Thanks for your comment. We are a comparison website and as such, can provide general advice only. If you have any concerns or would like to discuss your personal situation in more detail, we recommend speaking to a financial planner.


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