Offset Account vs Investing in Shares: Which Will Make You Richer?

When interest rates are high, putting extra money into your offset account can feel like the obvious decision. It reduces the interest on your home loan, keeps your money accessible, and gives you a return that is hard to ignore.

But if you are trying to build wealth over the long term, is the offset always the best place for your money?

In the first episode of our Essentials Series, we revisit one of the most common questions homeowners ask: should extra savings stay in the offset, or could that money be working harder elsewhere?

In this episode, we look at how to weigh up the trade-off between reducing mortgage interest today and investing for growth over time. We also explain why tax, inflation and timeframe can all change the way this decision looks.

In this episode:

• Why offset accounts have become more attractive as rates have risen

• The simple mistake people make when comparing offset accounts with shares

• How to think about short-term money versus long-term wealth

• The tax detail that can completely change how this decision looks

• Why inflation still matters, even when your money is sitting safely in offset

• What to weigh up to make the right decision for you

If you have extra money available and are unsure whether to leave it in offset or invest it, this episode will help you think through the decision with more clarity and confidence. Please note: This episode was originally recorded in 2023, so any interest rates or market return figures mentioned reflect the environment at the time of recording. WANT TO KNOW IF AN SMSF IS RIGHT FOR YOU?: At Guidance Financial Services, we can provide personalised advice on self-managed super, superannuation and investment strategy, based on your goals and circumstances. Book your appointment here. WANT TO STAY ACROSS WHAT'S MOVING THE MARKETS?: Subscribe to GainingCHOICE, our weekly email unpacking the key headlines and what to pay attention to.

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