First Home Saver Account

First Home Saver Accounts

Saving for your first home is a difficult thing to do. Most people in this situation are young and just beginning to work in their career field. Many prospective new homeowners are young newlyweds, or couples with a baby on the way. With lingering student debts and entry level salaries, saving for a home can be tough.

The Australian Federal Government has recognized this and launched a new program in 2008 to help its citizens save for their first homes. The First Home Saver Account scheme is designed to make home ownership a more accessible endeavor for all to achieve. This incentive program is available to Australian adults and is aimed at providing tax breaks and savings, thanks to government financial support.

Top Australian Savings Accounts

Savings Account	Account Details	Maximum Variable Rate p.a.	Standard Variable Rate p.a.	Bonus Interest p.a.	Fees	Min Balance/Min Deposit
UBank USaver	Try the new UBank USaver out for yourself.	5.51%	4.91%	0.60%	$0	$0 / $0
RaboDirect High Interest Savings Account	Earn a high interest rate on your savings with a RaboDirect savings account.	5.60%	4.85%	0.75%	$0	$0 / $0
Citibank Online Saver	Citibank offer an incredibly high interest rate, and the safety of being with the worlds largest banks.	5.70%	4.25%	1.45%	$0	$0 / $0
ANZ Online Saver	Open an ANZ Online Saver to take advantage of one of this fantastic bonus rate. Limited time only!	5.50%	3.75%	1.75%	$0	$0 / $0
HSBC Serious Saver	Enjoy an introductory variable rate. Limited time only!	5.55%	4.25%	1.30%	$0	$0 / $0
Virgin Saver Account	A great savings account from Virgin Money	4.75%	4.75%		$0	$0 / $0

How Do You Qualify?

To qualify for a First Home Saver Account, you must meet a set of criteria. You must be a citizen of Australia between the ages of 18 and 65 who has never purchased or built a home before. You must have never before had a First Home Saver Account and must have a valid tax file number that you supply your account provider with. If you meet all of these criteria, you may very well qualify for the account. These accounts are different from a normal savings account and only designated for those who meet the requirements. Don’t waste your time or your bank’s time by failing to understand the rules.

How does it Work?

Essentially by taking advantage of the First Home Saver Account program, you can use government contributions to save much more quickly for your new home. For every contribution up to $5 000 that you make each year, the government will contribute 17%. This means that the government could potentially be adding a special “bonus interest” of $850 to your savings account each year. Interest earned on your First Home Saver Account is taxed at 15% instead of the usual marginal tax rate that is customary with regular savings accounts.

First Home Saver Accounts are capped at $75 000. If the account reaches this amount no further deposits will be accepted so you can withdraw the funds if you wish. Funds can be withdrawn anytime within four years of starting the account up. Any funds withdrawn after this time must go towards building or buying a home. You can’t use the money for investment purposes or else you will be taxed. There are many institutions that offer the First Home Saver Account