SMSF cash
Where SMSF cash can sit: accounts, savings and term deposits
By easySMSF, SMSF Specialist Team · Updated
Cash is the one asset every SMSF holds. Here are the five places it can sit, what each is good for, and the traps trustees hit when they lock too much of it away.
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Liquidity is a compliance issue, not just a return question
Every SMSF needs a bank account in the fund's own name. Contributions arrive there, expenses and tax leave from there, and for a fund in pension phase the minimum annual payment has to come out of it before 30 June. Mixing that money with a member's personal account is one of the most common and most avoidable audit breaches.
Beyond the everyday account, the choice is between availability and rate. A cash management account usually settles trades directly and carries the best data feed coverage; an online savings account may pay more but often excludes trust and business accounts from its headline rate; a term deposit pays for certainty with a lock-up that can require 31 days' notice to break.
The compliance angle is liquidity. Your written investment strategy has to address the fund's ability to pay benefits and expenses as they fall due. A fund with most of its cash in a two-year term deposit and a pension obligation in June is a strategy problem, not just an inconvenience — laddering maturities across the year is the usual answer.
We don't receive commissions from banks or deposit providers and we don't recommend one institution over another. You choose where the fund's cash sits; we connect the account so the transactions reach us automatically and the annual accounts build themselves.
- One account in the fund's name is mandatory — never a personal account
- CMAs generally offer the best data feed coverage for automated administration
- Check that a savings account's headline rate applies to trust accounts
- Ladder term deposits around pension, tax and fee due dates
- Deposit protection limits apply per institution — verify before concentrating cash
The five options compared
| Option | Best for | What to check |
|---|---|---|
| Transaction account (the fund's everyday account) | Contributions, rollovers, expenses, tax and pension payments. Every fund needs one. | Interest is usually low. Keep enough here to cover known outgoings so you're never forced to break a term deposit. |
| Cash management account (CMA) | Sits between the everyday account and investments; usually linked directly to a broker for settlement. | Often the account with the best data feed coverage, which makes year-end simpler. Compare the rate against a plain savings account. |
| Online savings account | Cash the fund doesn't need this month but wants available at short notice. | Introductory and bonus rates can drop after a few months. Check whether the headline rate applies to business or trust accounts, which many don't. |
| Term deposit | Cash with a known holding period — often used to lock in a rate for six to twenty-four months. | Breaking early costs interest and can take 31 days' notice. Ladder maturities so cash is available when pension payments and tax fall due. |
| Cash held inside a wrap platform | Convenient if the fund's investments already sit on a platform. | The platform's cash rate is frequently lower than a direct account, and platform fees may apply on top. |
General information for trustees. Rates, limits and account eligibility change — confirm current terms with the institution.
Frequently asked questions
General advice warning
Figures shown are illustrative only and based on the inputs and assumptions you provide. They are general information, not personal financial product advice. Consider your objectives, financial situation and needs, and seek personal advice from a licensed financial adviser before acting. easySMSF does not hold an Australian Financial Services Licence (AFSL).