First Home Saver Account

First home saver accounts are offered by many banks and credit unions in assisting under age people to save money for the purchase of their first home. With the help of first home saver accounts you can boost up your savings to buy your first home ever. With a combination of low taxes and Government contributions First Home Saver Account make you able to save money for your first home. With the help of First Home Saver Account your saving will attract the Government contributions and you will be offered lower rate taxes on your earnings and interests. However you can use the funds saved in the First Home Saver Account solely for purchasing the home. You can not use these funds and savings on other ordinary purposes. You have to save the money and keep the investment for the four financial years and after that you can use this investment to purchase or build the home in which you will live.

An amount of 17% of your saving or investment will be added by the Government to your First Home Saver Account in each financial year. However, the amount of your saving or investment must be up to $5000 or more than that. If you have a saving of $5000 in your account Government will add $850 to top up your saving each financial year. Another excellent feature offered by the First Home Save Account is that they offer interest on your earnings and investment. The tax rate will be quite low on your interest or earnings. The tax rate applied by the Government will be only 15%.

Before introducing the first home saver accounts the Government asks for the suggestions, comments and consultation from the community. Government received almost 150 submissions from various businessmen, organizations and other people and decided an overall account balance of $75000 with no upfront contribution. Government also offered tax incentives to the owners of the First Home Saver Account as explained above.

You can open your FHSA account with life insurance firms, banks, credit unions, building societies and public offer licensees that are approved and regulated by APRA. You can transfer your accounts between different providers but the individuals have to bear the transfer charges.

So if you fulfill the eligibility criteria take advantage of the First Home Saver Account that has come into existence from 1st October, 2008.

First Home Saver Accounts like any financial products should be assessed carefully. There will be fees and charges that you should be aware of. The interest rates will also be a key consideration.

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