Generating guaranteed returns | Accurium

According to recent ATO statistics (ATO Self-managed super fund quarterly statistical report - December 2017) SMSFs hold about 22% of their assets in guaranteed fixed income investments, such as term deposits. This asset class is a low risk investment generating a guaranteed fixed rate of return over a chosen timeframe. SMSFs invest in these products to manage short term cashflow requirements, and also as an investment in a low risk asset class as part of their diversified portfolio. 

A fixed term annuity is a guaranteed fixed income product offered by a life insurance company. The table below describes the features of a guaranteed fixed term annuity:

Features Fixed term annuity
Term of investment Fixed term annuities can provide guaranteed returns across a range of periods from 1 to 50 years.
Safeguards to ensure payments will be met

Only a life insurance company can offer a fixed term annuity.
A life insurance company is regulated by APRA under the Life Insurance Act 1995 (Cth) and the prudential standards made under, which prescribe minimum capital and solvency requirements for both the life insurance company as well as the annuity business it writes. For example, a life insurance company is required to hold enough capital to withstand a 1 in 200-year shock event.

Guaranteed rate of return

The rate of return you will receive, is established at the time you apply for an annuity, and will depend on the product options you choose and prevailing interest rates.

Access to money before maturity

You can withdraw from the Annuity before the end of the investment term (in part or in full). However, the Annuity is designed to be held until the end of the investment term and so you might not receive the benefits you would have, had you not withdrawn, and you might receive back less than you invested.


Returns on guaranteed fixed income investments vary so shop around for the best rate for the period that suits you. 

Term Annuity campaign

The information in this document is provided by Accurium Pty Limited ABN 13 009 492 219 (Accurium). It is factual information only and is not intended to be financial product advice, tax advice or legal advice and should not be relied upon as such. The information is general in nature and may omit detail that could be significant to your particular circumstances.  While all care has been taken to ensure the information is correct at the time of publishing, superannuation and tax legislation can change from time to time and Accurium is not liable for any loss arising from reliance on this information, including reliance on information that is no longer current. Tax is only one consideration when making a financial decision. We recommend that you seek appropriate professional advice before making any financial decisions.