Superannuation cash deposits increase

Superannuation services have been subjected to a greater number of cash deposits in recent months, with the rate rising well above the historical average.

Statistics reported by the Sydney Morning Herald listed cash deposits as making up 18 per cent of Australia's total superannuation fund. According to the same report, the average amount of cash deposits over the past 20 years has been just 10 per cent. 

This isn't the highest the amount of cash deposits has been in recent years either, with a peak of 20 per cent recorded by the Australian Bureau of Statistics. The significance of the trend appearing this year, however, is that it coincides with a lower cash rate. 

The Reserve Bank of Australia lowered the cash rate to 2.25 per cent for February, in an attempt to discourage this sort of trend.

Overall, the increase in cash assets deposited corresponds with a general increase in superannuation funds across the country.

According to the Association of Superannuation Funds of Australia (ASFA), the total amount of super assets in the country reached $1.94 trillion towards December 2014.

This result was a new record for Australian funds, with it being a 9.3 per cent increase of the previous year's total.

The ASFA also pointed out that the growth seen in superannuation funds is happening at a higher rate then both wages and employment. The organisation attributed this to the Superannuation Guarantee initiative, which makes it compulsory for employers to pay the equivalent of 9.5 per cent of an employee's salary into a superannuation scheme.

Small business owners and working individuals will need to consider these findings when managing their super funds, as they have an impact on the behaviour of the marketplace. It is important to weigh up the risks and rewards of other investments before depositing cash directly into a super fund.