Guaranteed super fund suits worried investors
If certainty about the earnings from your superannuation or pension fund is paramount, here is a superannuation fund with a capital-guaranteed return. From Heritage Bank it's called Secure Super Account.
The fund operates like a bank account and guarantees to pay 0.5% above the Reserve Bank cash rate. For example, if the cash rate is 4.5%, then the return is 5%. The Secure Super Account is an online retirement savings account approved by the Australian Prudential Regulation Authority. It is protected by the federal government's deposit guarantee for amounts up to $250,000.
Another plus is the fund is free from the administration, management and account-keeping fees that are common with most superannuation funds. The only fee charged is $44 for a withdrawal.
The straightforward nature of the Secure Super Account suits people worried about investing in volatile share and property markets. Heritage Bank pays investors the higher rates by lending the money to its mortgage customers.
Unlike many employer superannuation funds, the Secure Super Account does not offer life insurance. If you transfer from another superannuation fund with insurance, you may be left uninsured or underinsured. You can take out life insurance, TPD insurance and salary continuance insurance outside your superannuation fund. See www.heritage.com.au.
MONEY VERDICT
Because of the Secure Super Account's capital guarantee, you can rest assured that your superannuation fund balance is protected. And returns will always return more than the official cash rate and outpace inflation. I like the simplicity of this fund, free of many of the investment risks and fees. It is very unlikely to be the best-performing fund, but it suits investors who don't want to risk their retirement savings in shares or property where asset values can rise, but also fall. It fits well with the current low-growth investment climate.
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