The first-time home purchase savings account
Written on October 8, 2009 – 1:14 PM | by dodolovesme
People saving for the deposit on their first home can take advantage of a special savings account offered jointly by the building societies and the government, in which the high interest rate offered by the building societies is supplemented by an additional subsidy paid by the government. An initial deposit of $100 is required to open the account. You may then deposit as and when you wish for a period up to 10 years or to a maximum balance of $20 000 (which is a useful contribution to the deposit on your first home).
Only two withdrawals may be made from the account over the period of its currency, and both must be for the purpose of putting down the deposit on your first home or the land on which to build it. It is at the withdrawal stage that the government subsidy is added – after the authorities have been assured (and have proof) that the money is indeed being used to buy your first home.
A further advantage of this method of saving for the deposit on your first home is that you are virtually assured of being able to obtain a loan from the building society concerned for the purchase of your home – even if money is tight and loans difficult to obtain.
If you find yourself NOT in a position to use the money to buy a home, and need the money for some other purpose, you can have it – after all, it is your money! But then you forfeit the government subsidy, and you receive only the normal building society interest rate, not the higher rate offered to people saving for their first home.
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Tags: deposit, first home, home, money
6 Responses to “The first-time home purchase savings account”
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