RBA Cash Rate Record Low

To help support Australia’s economic recovery after the COVID-19 pandemic, on 4 November 2020 the Reserve Bank of Australia (RBA) reduced the Cash Rate by 15 basis points to a new record low of 0.10%. This low is expected to remain in place for at least the next few years.

Low returns for Cash

While a low interest rate environment is supportive for businesses and individuals who borrow money, the flipside is lower or negligible income for savers. Members in options that have a high cash holding, such as Cash Savings and Conservative, could see lower returns over the next few years.
For more information about the RBA Cash Rate please visit the RBA Website.

How could this impact me?

We’ve created two scenarios below to highlight the difference in returns of someone 100% invested in Cash Savings versus someone 80% invested in Cash Savings and 20% invested in Growth (Cbus MySuper)^ which generally generates a higher return with a higher risk portfolio.

Scenario comparison:

$100,000 balance, one year period

In this scenario Member B generates a higher return as their current financial situation and retirement goals has allowed them to divest a small part of their super into Growth (Cbus MySuper), which generally has higher returns than Cash Savings but also a higher risk profile.
This is one way members can keep their super in cash, but opt for a small amount of risk to generate a slightly higher growth.

Investment assumptions

Member A returns: 0.05% (based on the FYTD returns for Cbus Cash Savings - January 21 Superratings) for the 12 month scenario.
Member B Returns: 2.07% (based on the FYTD returns for Cbus Cash Savings - January 21 Superratings (80% of the total at 0.05% return) and the FYTD returns for Growth (Cbus MySuper) - January 21 Superratings (20% of total at 10.15% return)), for the 12 month scenario.
For both Member A and B: Age at June 30 2021 is 66 years old (one year until member retires). Time period: 1 year. Yearly salary: $80,000. Employer contribution: 9.5%. No insurance. No voluntary contributions. Single relationship status. Admin fees: $104 / 0.19% of balance (capped at $1000). Inflation: 2.5% and 1% rise in living. 

We’re here to help

It's important to consider what investment options are right for you, so we encourage getting in touch with Cbus Advice Services to ensure you achieve the best possible outcome for your retirement goals. 

1300 361 784 (Option 4), available at no additional
cost. 

Alternatively, ask us to contact you by completing this form:

Request advice

Past performance is not a reliable indicator of future performance. 

^The return for the Growth (Cbus MySuper) option is based on the crediting rate, which is returns minus investment fees, taxes and until 31 January 2020, the percentage-based administration fee. Excludes fees and costs that are deducted directly from members account. This information is about Cbus and doesn’t take into account your specific needs. You should look at your own financial position, objectives and requirements before making any financial decisions. Read the relevant Cbus Product Disclosure Statement to decide if Cbus is right for you. Call 1300 361 784 or visit cbussuper.com.au for a copy.

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