Banks SMSF deposits increased by 40% to almost $120 Billion

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Banks SMSF deposits increased by 40% to almost $120 Billion

 

People who manage their own retirement savings are an important source of funding for banks as they have increased their bank deposits by 40% to almost $120 billion in the past four years.

 

There has been a large number of SMSF moving into property acquisitions and the entire real estate industry, construction industry, and of course the economy which is benefiting from this positive and large shift.

 

Australia has some specific challenges for banks in terms of the SMSF market and there are new rules requiring banks to source a larger share of their funding from deposits, and regulators are pushing banks to put the greatest emphasis on ''sticky'' deposits that are unlikely to be suddenly withdrawn. 

 

But in a move questioned by banks, the Australian Prudential Regulation Authority recently said it would view deposits from SMSFs as less ''sticky'' than those from households.

 

Like other banks, Citi is targeting affluent customers that are less likely to suddenly withdraw their deposits. 

 

There is a ragged edge of deposit markets which are totally price dependent and they are in a sense wholesale funding markets because the relationship that comes with those funds is never particularly sticky

 

There has been a large number of SMSF moving into property acquisitions and the entire real estate industry and economy is benefiting from this shift.