A recent analysis of 37 savings accounts and 29 term deposits available to SMSFs has found the difference in unconditional savings interest rates offered by banks can be as high as 2.10 per cent, meaning SMSFs are losing out on thousands of dollars in interest savings every year.
Comparison site Mozo.com.au said SMSFs have failed to shop around.
“For an SMSF owner with a cash balance of $200,000, failing to shop around for a better rate deal could equate to $4250 in interest lost each year,” Mozo director Kirsty Lamont said.
“At a higher balance, the shortfall in interest is even greater.
“Keeping your savings parked in an account with suboptimal rates could prove a costly mistake and, over time, could mean a huge difference to your fund’s balance and quality of life in retirement.
Mozo found the difference between the highest and lowest interest rates for SMSF term deposit accounts was up to 1.20 per cent on a five-year term.
On a $200,000 investment, that is a difference of $12,000 in interest earned over five years.
“When comparing deals, be sure to look beyond the big banks as you can often get better interest rates elsewhere,” Lamont said.
“Non-big four banks are eager for business and lower overheads generally translates into sharper interest rates.
“Like the big banks, smaller players are covered under the government’s deposit guarantee scheme so you won’t be compromising safely.”
The Mozo Expert Choice Awards named RaboDirect as SMSF Savings Bank of the Year, for the second consecutive year, after scoring multiple individual awards across both term deposit and savings account categories.