SMSF Setup

When you set up a self-managed super fund you also need to set up a new bank account for the SMSF. We’ve selected the Macquarie Cash Management Account (CMA) for the following reasons:

• No account keeping fees or transaction fees;
• Fast and 100% online account set up;
• Data feeds and read-only accountant access;
• Great mobile bank app and Australian-based customer service;
• Accepted by all industry and retail super funds for electronic transfer via SuperStream,
• Fast inward transfers on the NPP (New Payments Platform / OSKO / PayID) – March 2022,
• Fast outward transfer on the NPP – Late 2022.

Keeping your SMSF money separate from your personal money is essential when you have an SMSF. Because most people don’t use Macquarie for their everyday personal banking, using Macquarie helps ensure no costly mistakes.

Find out why we believe the Macquarie CMA is the best SMSF bank account.

One common question in regards to the set up of an SMSF is “How much super do you need to set up an SMSF?”. 

The answer is simple: It depends! 

Importantly, there is no SMSF minimum balance required by the ATO. 

Where the ATO has information showing the total super balances of the SMSF members is under $50,000 the likelihood of the ATO auditing the SMSF application increases significantly.

Based on outdated information from ASIC some industry and retail super funds will say that you need at least $500,000 for an SMSF. This is incorrect and not supported by independent research.

SMSF research by the University of Adelaide released in February 2022 found “the performance of a typical SMSF improves as the balance of the fund  approaches $200,000. Once this threshold is reached, the performance of   the fund is comparable  with SMSFs  with much larger balances.”

One approach when looking at how much money you need to set up an SMSF is to compare fees. On average a large APRA regulated superannuation funds will charge 1.10% of your balance.  This is based on information collated by Canstar as at 14/04/2020. 

Using this approach, if your SMSF is paying $1320 per year in SMSF fees, then a super balance approaching $120,000 will make the costs similar.  Remember an SMSF can have up to 6 members and you only pay one lot of fees per SMSF – so sharing costs with your partner is a great SMSF advantage. 

SMSFs provide access to investments that no other super product can provide such as direct property, cryptocurrency and unlisted private investments. Therefore the greatest cost with an SMSF is the cost of NOT HAVING AN SMSF and missing out on the greatest investment opportunities.

There are a number of differences if you were to compare Grow SMSF to many of the low cost online only service providers available.  We recommend anyone comparing SMSF service providers look at the following as part of their research:

1. Service: We provide personalised phone and email support.  You are not forced to make all communication via an online portal. Our phone number 1300 651 263 is readily available during business hours (AEST). Check to see whether other providers have a phone number you can call to speak to a human.
2. Transparency: Where Grow SMSF receives commission or referral fees we will disclose them and where possible rebate them to your cryptocurrency SMSF or use the commission received to reduce your SMSF fees.. Some other SMSF service providers receive commissions which increase the ongoing costs of using their preferred suppliers.  Check the Product Disclosure Statement (PDS) of those providers to see how much they receive in commissions.
3. Work Required from you: Some providers are not ‘full service’ SMSF administration providers – they could better be described as an online accounting system with an SMSF audit and lodgement function attached.  Grow SMSF does not require you to categorise or code any of your SMSF transactions yourself.

The above is not a comprehensive list. Take a look at our esuperfund review to find more specific information on comparing Grow SMSF to other service providers.

The fee to set up an SMSF is normally paid by the members, and then once the SMSF is setup and bank account open with funds received from contributions or transfers, the member can be reimbursed for the SMSF setup costs. 

If the cost of setting up the SMSF is not repaid from the self-managed super fund bank account to the member, then it can be recorded in the SMSF accounts as a contribution and technically the SMSF member can claim a personal tax deduction for that contribution.

Grow doesn’t enable you to setup an SMSF without paying the upfront establishment fee. Most people choose to pay the fee via credit card and then reimburse themselves in 2-3 weeks once the SMSF has received transfers of existing super.

The set-up fees for a new SMSF are as follows:

• $770 with individual trustees;
• $1320 with a company trustee

Grow SMSF intentionally DOES NOT offer ‘FREE’ SMSF establishment to ensure we provide you with the best possible upfront support and service you deserve.

You can set up a new SMSF with Grow here: Set up an SMSF

The following can be used as your SMSF setup checklist.

• Choose the members of your SMSF;
• Decide on your SMSF trustee (company versus individual trustees);
• Obtain SMSF trust deed;
• Sign SMSF setup documents;
• Ensure the SMSF has assets;
• Submit SMSF ABN and TFN application to ATO;
• Setup SMSF bank account;
• Ensure you have an Electronic Service Address (ESA);
• Transfer existing super to your SMSF;
• Document and implement your SMSF investment strategy.

Grow SMSF guides you through the SMSF setup process and is there to help you with any questions you have!

No. 

The cost to setup an SMSF is not tax deductible. The SMSF setup costs are non-deductible expenses according to the ATO.

The fee to set up an SMSF is normally paid by the members, and then once the SMSF is setup and bank account open with funds received from contributions or transfers, the member can be reimbursed for the SMSF setup costs. 

If the cost of setting up the SMSF is not repaid from the self-managed super fund bank account to the member, then it can be recorded in the SMSF accounts as a contribution and technically the SMSF member can claim a personal tax deduction for that contribution.