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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.

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, conduct a thorough super funds comparison 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 448
Name 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.)
Australian Ethical Super Balanced
Green CompanyEthical
Last 1 year performance (p.a.)
+7.74%
Last 3 year performance (p.a.)
+4.5%
Last 5 year performance (p.a.)
+7.03%
Last 10 year performance (p.a.)
+6.89%
Fees on $50k balance (p.a.)
$603
Go to siteMore Info
CareSuper Growth
Industry fundHigher risk
Last 1 year performance (p.a.)
+8.9%
Last 3 year performance (p.a.)
+7.71%
Last 5 year performance (p.a.)
+8.29%
Last 10 year performance (p.a.)
+8.39%
Fees on $50k balance (p.a.)
$553
Go to siteMore Info
Aware Super High Growth
Industry fundHigher risk
Last 1 year performance (p.a.)
+10.17%
Last 3 year performance (p.a.)
+7.44%
Last 5 year performance (p.a.)
+8.85%
Last 10 year performance (p.a.)
+8.69%
Fees on $50k balance (p.a.)
$497
Go to siteMore Info
HESTA Balanced Growth
Industry fund
Last 1 year performance (p.a.)
+8.15%
Last 3 year performance (p.a.)
+6.99%
Last 5 year performance (p.a.)
+7.39%
Last 10 year performance (p.a.)
+7.61%
Fees on $50k balance (p.a.)
$477
Go to siteMore Info
UniSuper - Balanced
Industry fund
Last 1 year performance (p.a.)
+7.48%
Last 3 year performance (p.a.)
+5.92%
Last 5 year performance (p.a.)
+7.59%
Last 10 year performance (p.a.)
+7.95%
Fees on $50k balance (p.a.)
$351
Go to siteMore Info
Spirit Super - Balanced (MySuper)
Industry fund
Last 1 year performance (p.a.)
+7.68%
Last 3 year performance (p.a.)
+6.2%
Last 5 year performance (p.a.)
+6.65%
Last 10 year performance (p.a.)
+7.54%
Fees on $50k balance (p.a.)
$452
Go to siteMore Info
CareSuper Balanced
Industry fund
Last 1 year performance (p.a.)
+7.29%
Last 3 year performance (p.a.)
+6.55%
Last 5 year performance (p.a.)
+7.15%
Last 10 year performance (p.a.)
+7.61%
Fees on $50k balance (p.a.)
$553
Go to siteMore Info
Australian Retirement Trust - Growth
Industry fundHigher risk
Last 1 year performance (p.a.)
+9.88%
Last 3 year performance (p.a.)
+10.01%
Last 5 year performance (p.a.)
+9.66%
Last 10 year performance (p.a.)
+9.21%
Fees on $50k balance (p.a.)
$542
Go to siteMore Info
Spaceship - GrowthX
Higher risk
Last 1 year performance (p.a.)
+22.23%
Last 3 year performance (p.a.)
+5.25%
Last 5 year performance (p.a.)
+10.87%
Last 10 year performance (p.a.)
N/A
Fees on $50k balance (p.a.)
$503
Go to siteMore Info
Australian Retirement Trust - International Shares Index (unhedged)
Finder AwardIndustry fundIndexed investmentHigher risk
Last 1 year performance (p.a.)
+20.99%
Last 3 year performance (p.a.)
+11.75%
Last 5 year performance (p.a.)
+12.02%
Last 10 year performance (p.a.)
+11.42%
Fees on $50k balance (p.a.)
$187
Go to siteMore Info
AustralianSuper - Balanced
Industry fund
Last 1 year performance (p.a.)
+7.58%
Last 3 year performance (p.a.)
+6.44%
Last 5 year performance (p.a.)
+7.76%
Last 10 year performance (p.a.)
+8.18%
Fees on $50k balance (p.a.)
$382
Go to siteMore Info
HESTA High Growth
Industry fundHigher risk
Last 1 year performance (p.a.)
+10.55%
Last 3 year performance (p.a.)
+9.09%
Last 5 year performance (p.a.)
+9.56%
Last 10 year performance (p.a.)
+9.01%
Fees on $50k balance (p.a.)
$557
Go to siteMore Info
UniSuper - Conservative Balanced
Industry fund
Last 1 year performance (p.a.)
+4.85%
Last 3 year performance (p.a.)
+4.78%
Last 5 year performance (p.a.)
+4.92%
Last 10 year performance (p.a.)
+5.89%
Fees on $50k balance (p.a.)
$366
Go to siteMore Info
AustralianSuper Conservative Balanced
Finder AwardIndustry fund
Last 1 year performance (p.a.)
+5.79%
Last 3 year performance (p.a.)
+4.27%
Last 5 year performance (p.a.)
+5.69%
Last 10 year performance (p.a.)
+6.4%
Fees on $50k balance (p.a.)
$367
Go to siteMore Info
Australian Ethical Super Growth
Green CompanyEthicalHigher risk
Last 1 year performance (p.a.)
+8.89%
Last 3 year performance (p.a.)
+6.09%
Last 5 year performance (p.a.)
+7.88%
Last 10 year performance (p.a.)
+7.64%
Fees on $50k balance (p.a.)
$733
Go to siteMore Info
Australian Retirement Trust - Australian Shares
Industry fundHigher risk
Last 1 year performance (p.a.)
+7.42%
Last 3 year performance (p.a.)
+9.72%
Last 5 year performance (p.a.)
+9.6%
Last 10 year performance (p.a.)
+8.51%
Fees on $50k balance (p.a.)
$347
Go to siteMore Info
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Showing 16 of 50 results

Unless indicated otherwise, the information in the table is based on data provided by SuperRatings Pty Limited ABN 95 100 192 283, Australian Financial Services Licence 311880.

*Past performance data and fee data is for the period ending Jan 2024

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12 Responses

    Default Gravatar
    LinneyJuly 10, 2023

    How can a retiree over 80 join and transfer SMSF to Industry Super Fund? There appears to be many rules for retirees over 75.

      AvatarFinder
      AlisonJuly 11, 2023Finder

      Hi Linney,
      You’re correct, the rules around superannuation for those over 75 are quite complex and will vary depending on your personal situation. It’s best to speak with a financial adviser who can offer you personal advice about transferring your super.
      Thanks,
      Alison

    Default Gravatar
    PetraApril 2, 2019

    Which banks/institutes still have retirement savings accounts?

      AvatarFinder
      JohnApril 3, 2019Finder

      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

    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

    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

    Default Gravatar
    JohnJuly 30, 2017

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

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