SMSF trustees seeking a better return from their cash account have been provided with a new option from a smaller bank that mainly deals with members of Australia’s armed forces.
Australian Military Bank allows trustees who are not part of the military to offer access to its DIY Super Saver cash account which offers an interest rate of 4.15 per cent per annum regardless of balance size.
The offering differed from similar products in the market due to its flexibility and that the interest rate is available to all account holders, Australian Military Bank head of product and pricing Dina Mok said.
“The DIY Super Saver is not linked to any other products and is a standalone account for SMSFs that can be used with anything and our members are attracted to the higher rate of 4.15 per cent which is applicable to the whole of the balance,” Mok told smstrusteenews.
“Unlike a traditional cash management accounts which have lower or different rates for some accounts ours is simpler in that you don’t have to make a decision on what you put where. It’s just one place where you put your money and it accrues daily interest that is paid monthly.
“This is beneficial to our members because it means if they need to park their money before making a decision on what investment they’re going to make it is accruing high interest every day.”
According to Mok the bank was able to provide the higher rate as it operated under a mutual structure and had greater control over its lending and borrowing books.
“How we fund our loans is through our at call and term deposits which is different to larger banks where funding comes from other sources. We’re a traditional bank, money in, money out, and that’s why we can attractive term deposit and interest rates,” she revealed.
While the 65 year old bank has primarily served members of the armed forces it also has a number of customers who are employed by defence contractors, many who operate their own SMSF, which drove the creation of products suitable for trustees.
“Our existence is built on defence housing and the biggest part of our business is the defence housing home loans but we also support contractors involved in that community and people in the reserves, but are actually open to anyone and offer specialised products as well,” Mok confirmed.
“Many people don’t know about our product and we want to get our products out there as 80 per cent of our members in an SMSF are not advised and the DIY Super Saver is really made for the traditional kind of trustee who is looking to do everything themselves.”
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