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Retirees better off with 7.4% tax-free cash as BT takes on the high interest savings market
Tuesday 10 June 2008
Smashing the best cash rate in the super market by over one per cent1 and
offering one of the highest rates in the online savings space, BT Super for
Life is making 7.4 per cent at-call, tax-free cash a reality for
retirees.
Head of BT Super for Life, Melanie Evans, said investors could now get a
phenomenal rate with a tax break.
Recent changes to Australia’s super rules and BT Super for Life’s unique
position as the only super fund fully integrated with online banking, means
anyone over 60 could effectively operate their super fund like a standard
online savings account, with Super Cash at-call, 24 hours a day, earning 7.4
per cent.
Ms Evans called on any investor above the age of 55 who has money sitting in an
online, high-interest savings account to ask themselves: ‘Would I be better off
with my money tax-free in super?”
“Investors no longer need to think about ‘super’ and ‘banking’ in isolation -
it’s about bringing the best of both worlds together so investors can easily
manage and control their savings in a high-interest, online environment with
all the tax advantages of super,” Ms Evans said.
“With a BT Super for Life Transition to Retirement (TTR) or Retirement account,
customers can easily establish regular or one-off withdrawals directly to their
online banking account,” she said.
Calculations show investors could increase their earning by up to 68 per cent
by taking advantage of the tax-free super environment with BT Super for Life.
Investors could even enjoy higher earnings after fees and taxes when the
‘advertised’ rate outside super appeared higher (see case studies over).
Ms Evans also urged retirees to do their homework on high interest accounts and
investigate the fine print as looks could sometimes be deceiving.
“Unlike some online savings accounts, interest is paid on the full amount from
the first day it’s invested until the day it’s withdrawn, there are no minimum
or maximums and one-off withdrawals are available in the investor’s nominated
bank account within 24 hours,” Ms Evans said.
BT Super for Life charges no management fees on cash investments and does not
pay commissions. Administration fees are a low $5 per month. Management fees on
other investment options are a low 0.99 per cent - half the cost of the average
retail fund and in line with leading industry funds.
Superannuation rules limit the amount of money that can be added to
superannuation each year to $150,000 per person for those under 65, or three
years of future entitlements can be "brought forward" up to $450,000
per person.
A minimum of four per cent and maximum of 10 per cent of the account balance of
a TTR account must be withdrawn each year. There are no maximum limits on the
amount you can withdraw from a Retirement account, but there are set minimums,
according to your age and account balance.
(See media
release (pdf 68.89KB) for case studies and information about BT Super
for Life)
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Media enquiries: Allison Davis, BT Media Relations 02 8253 2735 / 0419 746 655
1 SuperRatings’ one year Cash Option Returns to 31 March 2008