A: Thanks for the question.

Probably the easiest ways for an SMSF to buy USD is to open a foreign currency account with one of the banks. All the major banks in Australia allow you to open a USD account. Global banks like HSBC or CitiBank also offer this service – in fact you can bank online in one of 10 different currencies.

With US interest rates being around 0%, you won’t earn any interest on these accounts – and the big cost will be the buy/sell spread on the FX transaction. So before deciding on which bank to open an account with, look carefully at this spread (for the size of the deposit), and any other fees or charges.

Another easy but less direct way to purchase USD is to buy units in Betashares USD Exchange Traded Fund. This ETF is designed to track the US Dollar and trades on the ASX under the code USD. It has a pretty tight bid/offer spread, good liquidity and reasonable management fee at 0.45% pa. Read this to find out more.