Super vs Savings: What’s the Best Place for Your Money?

When it comes to setting money aside, two common options often get tossed around: Super vs savings. Both play important roles in your financial life, but they’re built for completely different jobs. So, which one deserves your next dollar?

Let’s break it down in simple, practical terms – no jargon, no fluff.

What’s Superannuation All About?

Super is like a long-term investment account set up just for your retirement. It’s fed by employer contributions (and any extras you choose to add), and it’s designed to grow steadily over the decades until you retire.

The big catch? You generally can’t touch it until you hit your “preservation age” and retire, usually somewhere between 55 and 60. It’s not designed for short-term goals or emergencies. It’s your future income stream, not your everyday piggy bank.

What’s a Savings Account Good For?

A savings account is a flexible, accessible way to hold cash. You can dip into it whenever you like – for a rainy day, a holiday, a house deposit, or an emergency vet bill.

There’s usually no minimum timeframe or complex rules – just park your cash and watch it (hopefully) earn some interest. But be warned: interest rates can be low, and any earnings will be taxed at your regular income rate.

Accessibility: Can You Get to Your Money?

Here’s where the real difference lies.

• Savings account: Your money is yours, whenever you need it. That makes it perfect for emergencies or short-term goals.
• Superannuation: Your money is locked away until retirement (unless you meet very specific hardship criteria). Great for future-you, not so helpful for now-you.

So if you’re saving for something in the next few years, or just want peace of mind that you can handle an unexpected bill, a savings account is the better bet.

Tax Time: Who Comes Out on Top?

This is where super really flexes its muscles.

When you contribute extra to super (especially from your pre-tax income), you’re only taxed 15% – often much lower than your usual income tax rate. Over time, those tax savings can make a big difference.

Earnings inside your super are also taxed at just 15%, and when you retire and start drawing it out (after age 60), those withdrawals are generally tax-free.

Compare that to a savings account, where your interest is taxed at your full income rate. Not so appealing, hey?

Growth Potential: Who Makes Your Money Work Harder?

Savings accounts are stable, low risk, and come with government protection (up to $250,000 per account holder, per bank). But they tend to earn modest returns – especially after tax and inflation.

Super, on the other hand, is usually invested in a mix of shares, property, and other assets, depending on your fund’s settings. That means it’s more likely to grow faster over the long term, though it may bounce around a bit year to year.

If you’re in your 30s or 40s and not planning to retire for decades, that long-term growth could be a huge win.

Government Perks: A Little Extra Help

Super also comes with sweeteners if you’re eligible.

• Low-income earners may receive a co-contribution from the government when they put after-tax money into their fund.
• Partners can chip in to each other’s super and potentially score a tax offset.
• Salary sacrificing extra into super can also help reduce your taxable income.

Savings accounts don’t come with these kinds of benefits—what you see is what you get.

So… Super or Savings?

Honestly, most Aussies need both.

Go with a savings account if you:

• Don’t have an emergency fund yet
• Are saving for something in the next 1–3 years
• Need flexibility and instant access to your cash

Go with super if you:

• Have your short-term needs covered
• Want to grow wealth for retirement
• Are looking for a tax-smart place to put extra money

Final Thought

Think of savings as your short-term safety net and super as your long-term investment engine. One keeps you steady today, the other builds comfort for tomorrow.

The best strategy? Use each for what it’s best at. Top up your savings for peace of mind now, then look at boosting your super to give your future self a leg-up. Your money doesn’t need to do just one job – it can multitask, just like you.

Any advice is general in nature only and has been prepared without considering your needs, objectives or financial situation. Before acting on it, you should consider its appropriateness for you, having regard to those factors. Before making any decision about whether to acquire a financial product, you should obtain the Product Disclosure Statement.