No. Funds held on trust by law firms are strictly regulated. Banks are required to pay any interest earned on funds held in trust accounts to a fidelity scheme and for other purposes. Therefore, you do not earn interest on monies held in our trust account.
However, the regulations allow you to instruct us to open a separate interest-bearing account for your funds, known as a Controlled Money Account (CMA). On large sums over an extended period, the interest earned can be significant.
For example, interest on $300,000 over a 6-month period at the rate of 3.10% would be $4,650.
If you are an executor or administrator of an estate, you are under a duty to maximise the returns on estate monies pending distribution. We cannot give you financial advice, however you may choose to invest the estate’s funds in a CMA.
Opening a CMA
Opening a CMA requires us to complete significant paperwork and comply with monthly account-keeping requirements to comply with the regulations. We therefore charge a fee for these services, which you must balance against the interest that may be earned to decide whether it is worth instructing us to open a CMA for your funds.
Most large financial institutions will offer the option to open a suitable CMA. If you instruct us to open a CMA with ANZ Bank (our current banking partner), we can usually obtain an account that pays interest at a rate close to the RBA cash rate (currently 3.10% as at 12 December 2022).
Our fees, inclusive of GST, for opening an account with ANZ are as follows:
|Opening a CMA||$440|
|Monthly maintenance fee|
for each month the CMA is open
|Closing a CMA||$330|
If you wish to open a CMA or to obtain further information, please contact your file manager.