Top First Home Saver Accounts

Dear Scott,

Love reading your articles in the Herald Sun.

Thought I’d ask a question about the First Home Saver Account (FHSA), which banks offer this account?

I asked at the Bendigo and Westpac they said they didn’t know what i was talking about, both my children have money invested for hopefully a house which is nearly due..

Many thanks,

Barb

Hey Barb!

Thanks for getting in contact.

First Home Saver Accounts (FHSA) are offered by a range of institutions (but not from Bendigo or Westpac, which explains their blank stares).

The best FHSA we’ve manage to track down at the moment is offered by Members Equity, which is currently paying 5.0 per cent (as at 10/01/12), with no bank fees.

In addition to this the government pays a 17.00% p.a. contribution on your first $5,500 saved in each financial year (which effectively means that you could be earning 22.5 per cent on every dollar up to $5,500 – not bad!), and earnings are taxed at 15 per cent rather than your marginal tax rate.

The only drawback of these accounts is that you must save at least $1,000 a year for a minimum of 4 financial years. Thankfully the government recently relaxed the rules, allowing you to use the funds in your FHSA to pay off your mortgage if you buy your first home before those 4 years are up.

Remember, that you’re not locked in to a provider – so if another FHSA increases their rates, by all means be a rate tart!

For more information check out ASIC’s First Home Saver Page, including their nifty calculator to see whether opening a FHSA is right for you.

Best,

Scott

The Top First Home Saver Accounts

ME Bank – 5.00% pa with no bank fees (+ govt. interest)

Teachers Credit Union – 4.75% pa with no bank fees (+ govt. interest)

*as at 10/01/12

Want to find out more about First Home Saver Accounts? Watch Scott’s Tribe Talk video on FHSA by clicking here.

Photo: http://www.flickr.com/photos/ericmay/4817484054/

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