Are you cashing in?

The Australian Competition & Consumer Commission’s (ACCC) December 2023 Retail Deposits Inquiry report set out to investigate the Australian retail deposit landscape.

Some of the reports key findings were:

  • Competition for retail deposit customers is often selective and opaque,
  • The RBA’s recent cash rate target increases have only indirectly affected retail deposit funding costs and rates,
  • Average effective interest rates for term deposits and bonus interest accounts were above the cash rate target from 2020 until mid-2022, but were both below the cash rate target as of June 2023,
  • Strategic pricing strategies lead to greater complexity for consumers and, for some, poorer outcomes, and
  • It is difficult for consumers to obtain an objective view of the best products due to lack of consistency between banks and conflicted arrangements with comparison websites.

The report also disclosed that $1.4t was held in Australian retail deposit products at the end of 2023.

With this amount of money invested across transactions and savings accounts and term deposits, Australians should be taking note. A collective 10 basis point increases in the interest rate received by Australians on these deposits would account to an extra $1.4 billion earned annually.

A simpler approach

The report looked negatively upon bank’s opaque strategies in reporting the interest rates received by customers and recommended greater transparency.

Understanding the difficulties investors can experience as outlined in the report Betashares offers simple and transparent cash solutions to Australian investors in AAA Australian High Interest Cash ETF and MMKT Australian Cash Plus Fund (managed fund) .

AAA aims to provide exposure to Australian cash deposits, with attractive monthly income distributions that exceed the 30-day Bank Bill Swap Rate (BBSW) (after fees and expenses).

AAA’s assets are simply invested in deposit accounts held with selected banks in Australia (as outlined on AAA’s fund page). The Fund’s scale has benefitted investors in the interest rates it receives on deposits.

Further, unlike the ACCC’s finding on some retail deposit accounts, AAA has historically passed on all RBA rate hikes immediately.

Source: Betashares. MMKT’s blended rate is the underlying securities blended margins above the RBA Cash Rate. Rates are net of AAA’s 0.18 management fee and MMKT’s 0.18% management fee.

Access to institutional cash products

For investors interested in enhancing the returns from their cash allocation, Betashares now offers MMKT Australian Cash Plus Fund (managed fund)

MMKT invests in cash, and money market securities that have historically been reserved for institutional investors due to the size and complexity required to trade them.

The Fund has been designed to be a core cash allocation in investment portfolios, aiming to provide attractive enhanced yield paid monthly, together with a high degree of capital stability.

The Fund invests in Australian dollar denominated, high quality, short-term securities and instruments with remaining terms to maturity of less than one year, issued by investment grade rated entities, using a buy-and-hold approach.

Since its inception in November 2023 MMKT has consistently returned more than AAA whilst maintaining a capital stable return profile.

Source: Bloomberg. 22 November 2023 to 30 April 2024. Past performance is not an indicator of future performance.

Both AAA and MMKT are structured as exchange traded products. They trade on the ASX with daily access and T+2 settlement, paying monthly distributions to investors. AAA and MMKT can help to simplify the cash allocation of Australian investors and remove the need to open a bank account, lock money away in a term deposit, or seek ‘honeymoon’ rates or special bank offers.

For more information please use the links below.


There are risks associated with an investment in AAA and MMKT, including interest rate risk, credit risk, and market risk. An investment in the Funds does not receive the benefit of any government guarantee. Investment value can go up and down. An investment in the Fund should only be made after considering your particular circumstances, including your tolerance for risk. For more information on risks and other features of the Fund, please see the Product Disclosure Statement and Target Market Determination, both available on Betashares website here.


This article mentions the following funds

Photo of Tom Wickenden

Written by

Tom Wickenden

Betashares – Investment Strategist. CFA level 2 candidate. Enthusiastic about markets and investing.

Read more from Tom.


Leave a reply

Your email address will not be published. Required fields are marked *

Previous article
Next article