How to put your SMSF cash to work

General information only. This article does not constitute financial product advice. Consider your own circumstances and seek independent financial, tax and legal advice before making any investment decisions.

Running a self-managed super fund (SMSF) means making investment decisions for your fund, including how cash is held and used within the fund’s investment strategy.

Whether cash is held for liquidity, upcoming expenses or between investment decisions, SMSF trustees should consider the options available to their fund.

Why cash management matters in an SMSF

Cash can play an important role in an SMSF. Trustees may hold cash to:

• meet liquidity needs, such as pension payments or upcoming expenses
• manage short-term obligations like tax, audit fees or the ATO supervisory levy
• maintain a defensive allocation within a diversified investment strategy
• hold funds between investment decisions

Trustees are responsible for considering how cash holdings fit within the fund’s investment strategy and how your strategy will change as you move towards retirement. Trustees must formulate, review regularly and give effect to an investment strategy that has regard to the whole of the fund’s circumstances – including the risk and likely return of the fund’s investments, diversification, the liquidity of those investments having regard to expected cash flow needs, and the fund’s ability to meet its liabilities. How much cash the fund holds, and where it is held, forms part of that assessment.

The right approach depends on the fund’s circumstances, and trustees should consider seeking independent financial, legal and tax advice.

Options for managing cash in your SMSF

SMSF trustees have a range of options for managing cash holdings. These commonly include:

High-interest savings accounts and term deposits

Available through banks and other authorised deposit-taking institutions (ADIs). Term deposits typically offer a fixed rate in exchange for locking funds away for a set period. Savings accounts offer more flexibility, but rates can vary. Deposits up to $250,000 per ADI are protected under the Financial Claims Scheme (FCS).

Low-volatility managed funds

Some managed investment schemes invest in fixed income, credit and short-term money market instruments, with the aim of generating returns above a cash benchmark. These are not bank deposits and are not covered by the FCS, so it’s important to review the Product Disclosure Statement (PDS) carefully.

Each option has different risk, return, liquidity and fee characteristics. The right choice depends on your fund’s circumstances and investment strategy.

Stake Accumulate: one option for SMSF cash

Stake Accumulate is an investment product available to eligible Stake customers, including those with a Stake Super SMSF.

Accumulate invests in a diversified portfolio of fixed income, credit investments, and can use a broader range of strategies. It aims to generate returns above the Reserve Bank of Australia (RBA) cash rate, net of fees.

Key features include:

• Daily earnings – returns are calculated and updated on business days
• Flexible access – no lock-in period, with withdrawals available subject to standard processing times
• Access through the Stake platform – Accumulate sits alongside your other Stake holdings in one place

Accumulate is a managed investment scheme, not a bank deposit. It’s not covered by the Financial Claims Scheme. The value of your investment can fluctuate and past performance is not a reliable indicator of future performance.

Before considering Accumulate for your SMSF

Whether Accumulate is appropriate for your SMSF depends on your fund’s circumstances, investment strategy and risk profile.

Before using any investment product inside your SMSF, trustees should consider:

Your investment strategy

Your SMSF’s trust deed and investment strategy govern what your fund can invest in. Make sure any investment is permitted under your deed and consistent with your written investment strategy.

Liquidity

Consider how quickly you may need to access the funds. While Accumulate has no lock-in period, withdrawal requests can take 1-2 business days to arrive in buying power, and 2-3 business days to withdraw. If you need funds available immediately for pension payments or other obligations, make sure your overall cash management plan accounts for this.

Risk

Accumulate is not a bank deposit. Your capital and your return are not guaranteed. The investment seeks to preserve capital and generate income, but this is not guaranteed.

The sole purpose test

Every SMSF investment must comply with the sole purpose test under the Superannuation Industry (Supervision) Act 1993 (SIS Act). Investments must be made and maintained for the purpose of providing retirement benefits to members. Trustees should satisfy themselves that any investment – including Accumulate – meets this requirement in the context of their fund.

Seek advice

If you’re unsure whether Accumulate is right for your SMSF, consider speaking with a licensed financial adviser who can assess your fund’s specific circumstances.

Tax and reporting considerations

Earnings from Accumulate may form part of your SMSF’s taxable income and will need to be included in your fund’s annual return.

Trustees will receive an annual tax statement from Accumulate. If your SMSF is administered through Stake Super, this information is generally incorporated into your year-end accounts and annual return process. If you hold investments outside the Stake platform, you may need to provide additional documentation to your accountant or administrator.

Some customers have noted that their SMSF accountants require unit-level data – such as the number of units held, unit price at 30 June and distribution history – to complete the fund’s annual accounts. If your auditor or accountant has specific reporting requirements, it’s worth confirming with Stake support what statements are available before the end of the financial year.

How to access Accumulate through your Stake SMSF

If you hold a Stake Super SMSF and are an eligible Stake customer, you may be able to apply for Accumulate through the Stake app or website.

Eligibility is assessed as part of the application process, which includes a Target Market Determination (TMD) assessment. Not all customers will be eligible.

These checks do not assess whether Accumulate is suitable for your personal circumstances.

If you have questions about eligibility or how Accumulate works within your SMSF, the Stake support team can help point you in the right direction.

A note on investment decisions

This information is general only and has been prepared without taking into account your objectives, financial situation or needs. Before deciding, consider whether it is appropriate for you, read the Product Disclosure Statement (PDS) and Target Market Determination (TMD) — available on the Stake website or from K2 — and consider seeking independent financial advice.

The Stake Accumulate Fund (ARSN 680 653 374) is issued by K2 Asset Management Ltd (ABN 95 085 445 094, AFSL 244393). This material is prepared by Stakeshop Pty Ltd (CAR 001241398), an authorised representative of Stakeshop AFSL Pty Ltd (AFSL 548196).

All investments carry risk, including loss of capital. The target return objective is annualised, net of fees and not guaranteed. Past performance is not a reliable indicator of future performance.

SMSF trustees are responsible for ensuring their fund’s investments comply with superannuation law, including the SIS Act, their fund’s trust deed and investment strategy. You should seek independent legal, financial and tax advice before making investment decisions for your fund.