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Earn 6% Interest +up to $850 Bonus from Goverment--First Home Saver Account @Members Equity Bank

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Earn 6% Interest +up to $850 Bonus from Goverment--First Home Saver Account @Members Equity Bank
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PSaturday on 07/04/2009 - 12:54 membersequitybank.com.au (597 clicks)
Last edited 07/04/2009 - 13:05

Your savings will earn a high rate of interest from Members Equity Bank in addition to the 17.00% p.a. Government contribution on your first $5,000 saved in each financial year. This means the Government could pay up to $850 into your account each year.

You must save a minimum of $1,000 per financial year to receive a Government contribution.Once you have held the account for a minimum of four financial years, you can withdraw your savings tax free to buy or build your first home to live in.

This kind of First Home Saver Account was introduced late last year. If you've got some spare money and not planning to buy your first home in the near future ( < 4 years from now), why don't open such an account and let the $$ grow faster?

First Home Saver Account @Members Equity Bank is the best one of its kind out of my research so far, regarding the interest rate and other charges (e.g. Commonwealth Bank charges you a certain amount of fees if you transfer to another bank, but no such fees apply here).

The 6% interest rate is fixed until 30 June 2009(the end of the financial year).

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closed Comments

  • CiA on 07/04/2009 - 13:46
    -1

    do u have spent the government money on a house? or can you use the bonus for personal use? how will the government know?

    • Koonit on 07/04/2009 - 13:52

      I'd like to know that too!
      +1

      • mawinmawin on 07/04/2009 - 14:34
        +1

        you cant withdraw the money easily without proper proof. Normal account closing also wont work as First home saver account keeping bank will move the money directly to Super.

  • Stuzi on 07/04/2009 - 13:52
    +1

    the deal is you have to spend the money on buying a house and if you dont it has to go to your super…its actually not a bad deal but not for everyone!

  • Saturday on 07/04/2009 - 15:07

    RBA just cut interest rate to 3.00%. So this 6% interest rate may look more attractive:)

  • whichtyler on 07/04/2009 - 18:49

    Looks good but I'm not sure that I want to take the gamble that I won't buy a house for four years.

  • whichtyler on 07/04/2009 - 18:50

    Also worth noting that any interest is taxed at a lower rate of 15%

  • CiA on 07/04/2009 - 19:32

    so if i have my money in there for a period after 4 years do I have to buy a house or have to put it in super at there point in time? or can I just leave it in the account for another couple of years to decide wat i want to do?

    • Saturday on 07/04/2009 - 21:03

      You can keep your money in the account after 4 years.

      More information can be accessed from the goverment website:
      http://www.homesaver.treasury.gov.au/content/fact_sheet/Acco…

      Some points copied from the above webpage:
      There will be a limit of $75,000 (indexed) on the overall account balance.
      Individuals can close their account and contribute the full amount to superannuation at any time.
      Individuals will be able to access their funds tax free once they reach age 60, consistent with superannuation.

      So you can just keep the money in the account and withdraw when u want to buy your first home or contribute it to super.

    • jimmsl on 07/04/2009 - 21:14

      You have to put at least $1000 in each year for 4 years in a row to be able to take the money out to buy a house. If you buy a house before 4 years is up then the money has to be rolled over into super. If you never buy a house (to live in) you can keep the account open until you are 60 or 65 years old (can't remember which).

      Have a look at http://www.homesaver.treasury.gov.au/

      These accounts are definitely not for anyone who is planning on buying their first home in less than 4 years (from 1 June 08 I think)!

      Edit: Sorry for the repeated info. Members Equity Bank has by far the best First Home Saver account at the moment, but you can change to a different bank at a later stage (a bit of paperwork involved I think, as you can't have 2 accounts open at the same time. Also you MUST give them your TFN when you open your account (unlike other bank accounts where it is not compulsory).

  • alexportnoy on 07/04/2009 - 21:09

    I have one of these myself, from the Commonwealth Bank.

    I have $2 in it. I open up accounts just for the hell of it all the time, and know I will never use it…especially this account, which is useless IMHO.

    Also, please note:

    1) You MUST have a Tax File Number (TFN) and it MUST be quoted to the Bank, to open this account
    2) You can only have ONE First Home Saver Account in your whole life (Tracked by ATO via TFN)
    3) You MUST legally notify your Bank in writing whenever you purchase a home, or you will get prosecuted in Court by the ATO

  • CiA on 07/04/2009 - 21:54

    one more question. what happens if i purchased a property as a rental investment and didnt live in it. then i purchased a 2nd house to live in for a 6month period, would i still be eligible then?

    • jimmsl on 07/04/2009 - 21:55

      I believe so.

    • whichtyler on 07/04/2009 - 21:58

      I was under the impression it's strictly for first homes, however reading that fact sheet now leads me to believe otherwise.

      However if you do buy an investment property first you are not eligible for a first home owners grant, which would likely be more profitable than this account.

      A friend at work got around this by buying their investment property overseas though.

    • alexportnoy on 08/04/2009 - 02:13

      what happens if i purchased a property as a rental investment and didnt live in it.
      then i purchased a 2nd house to live in for a 6month period, would i still be eligible then?

      Yes.

      "I own an investment property. Am I eligible to open an FHSA?"
      "If you do not and have not previously lived in your investment property, then it is not considered your home. Therefore, you will be eligible to open an account…."

      …and use it to buy this 2nd house.

      You must, legally, live in this 2nd house for at least 6 months.

      http://www.homesaver.treasury.gov.au/content/faq/faq.asp

  • Icy on 07/04/2009 - 23:06

    hehe 6%* per annum but only for 2 months

    asterisk = NOT!

  • SirCH on 08/04/2009 - 00:11

    I'm giving it a positive, but I'm not sure I'll get one. While it compares favourably to my 3.75% I'm getting at the moment, your money is tied in for 4 years.

    What if my circumstances change or I change my mind about buying or building my first home?

    Where your circumstances change during the life of the account and you no longer wish to purchase or build your first home, you will not be able to access the balance of the account, but you can transfer the balance into your superannuation fund and close the account.

    Can I have my money released early?

    If you have transferred the account balance into superannuation, that money can only be released if permitted under superannuation law. In your superannuation fund, it will be treated like any other preserved superannuation money. In certain circumstances, superannuation can be released early due to severe financial hardship, compassionate grounds or terminal illness.

    So in short, if you buy a house before the 4 years is up, you have to lose the money in to your super. So while you will still access the money, you won't be able to for a while…

  • CiA on 08/04/2009 - 14:11

    another question :) this relates to the first home buyers grant. Could i purchase an investment property as per normal and then purchase a 2nd property to live in using the home buyers grant? (this deal allows it) or as a previous post states i got to purchase my first investment whislt im overseas :/

    • whichtyler on 09/04/2009 - 13:22

      It depends when it was purchased and whether or not you've lived there:

      From http://www.osr.nsw.gov.au/benefits/first_home/faqs/fhogs/eli…

      A person may be eligible if they or their spouse (including de facto spouse) has only ever had a relevant interest in any residential property in Australia on or after 1 July 2000 and they have not resided in that property for a continuous period of at least six months

      A friend at work was sure that they couldn't though and so bought their investment property overseas. Looks like they were wrong!

  • Iangh on 08/04/2009 - 16:09
    +1

    You have to contribute for 4 tax years which is 2 years and 2 days at a minimum.

    First day is last day of this tax year, second day is first day of tax year 4.

    So, you could access the money July 2011 for buying the house with all the 'interest' from the government.

    • whichtyler on 09/04/2009 - 13:17

      Didn't see it that way…. starting to look more appealing!

  • alexportnoy on 09/04/2009 - 13:51
    -2

    Even though you legally MUST live in your property, this is unenforceable.

    It is impossible for ATO to find out if you are living there or not. ATO does not have STASI-like spies; just an ATO Compliance & Enforcement section based in Melbourne that spies on people like Glenn Wheatley.

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