According to CANSTAR, four out of 11 of their 5-star rated public funds now offer clients the option of putting part of their money into a term deposit to balance out their portfolio.
In this uncertain market, term deposits have been an increasingly popular option in self-managed super funds but we’re now seeing this option being offered more widely across all superannuation funds.
Parking cash in super is something you may well do while waiting for the market to show signs of recovery. However, a term deposit has an added benefit as the rate is locked in. The downside is that your money is locked away for a certain period and unavailable to use for any other investing opportunity that might come up in the meantime.
Advantages of Term Deposits
Investing in term deposits inside superannuation also has tax advantages. The returns are only taxed at 15% compared to bank term deposits which attract marginal tax rates. Be aware though that term deposit options in super funds may not be government guaranteed so check with your fund if that is important to you and, while you’re there, check the interest your fund is offering on its term deposits.
Even if retirement is light years away, making the most of your superannuation starts with the mindset that this is your own long-term investment account and, as such, should always be factored into your financial plans.
There are over 350 superannuation funds in the market which are classified as retail funds, industry funds, corporate super, SMSF products, public sector super, wrap/platform accounts, master trusts etc.
Knowing what’s best for you is not always immediately apparent.
Funds are putting considerable effort into providing advice to people who are confused about super so don’t be afraid to call them and access the advice within the fund or talk to a financial advisor outside the fund.
Sponsored products displayed are paid advertisements and Canstar receives a fee for referring you to the advertiser. Past performance is not necessarily a guide to future performance; unit prices may fall as well as rise. Performance information shown is for the historical periods up to 30/06/2016 and investment options noted in the product information. Performance figures shown reflect net investment performance, i.e. net of investment tax, investment management fees and the maximum applicable ongoing management fees and membership fees. Performance information is provided by Rainmaker Information Pty Ltd ABN 86 095 610 996 AFSL 461816 (www.rainmaker.com.au) which provides general information on superannuation. Any advice on this page is general and has not taken into account your objectives, financial situation or needs and is not a recommendation for your particular circumstances. Consider whether this advice is right for you. Consider the product disclosure statement before making a purchase decision. You may need financial advice from a qualified adviser.