Hi,
I'm the fella from this post http://www.ozbargain.com.au/node/107456
I think I've decided I want to open a first home saver account. But the question is now. Which company do I go with. My funds are currently with AMP and I am yet to withdraw and as far as I'm aware they offer a first home saver account also. Also What would be the best way to get the most out of it? Invest $6000 every year?
Extra Question: Does it matter who I open the FHSA with?
Thanks!
I opened mine with ME bank and that went smoothly. and yes, investing 6000 a year will get you the most out of it from what I heard but that is if you are sure you wanna get a house. best of luck.
im with me bank
the government pay the cocontribution in October and March each year, so if you lodge your tax return in July, the government cocontribution will be earning interst 6 months sooner.
I'd suggest if you're going to open one it might be wise to do it SOON, as there's no guarantee that a different Govt would keep it going.
Go with ME bank. and put in a minimum of 6000 per year for 4 years or more and save extra in an online savers account somewhere else or a term deposit.
I suggest you guys do the sums for how much interest you will receive extra in a FSHA account.
When I calculated it, over a 4 year horizon it becomes more worthwhile to put your money into a high interest online account such as the Usaver for a low income earner.
Remember the bonus FSHA is only for the minimum amount you put in each year. Furthermore, the bonus is only applicable up to a certain amount, then it reverts to a lower interest account with no bonus. So make sure you have money in another account if you are an asian-stereotype guy like me who is unwilling to purchase a house with a tiny deposit… Otherwise you will lose! Lose big time, because if you don't buy a house, and therefore you continue to leave your money in the FSHA account, you will lose in the long term as the Usaver interest rate is almost always higher, especially if you only working "part time" as there would be no tax advantage.
Remember! Compound interest!
I can't comment on your calculations as I have not seen it..however i do believe that FHSA is a better option than a high interest online account..the way to that is that you need not to put minimum $$ in FHSA for 4 years but you can get away within 2 and half yesr by doing 4 transactions closer to July deadline..Whirlpool is full of details about how to take more out of FHSA..
I did my own calculations, and didn't even take the tax benefit into account… putting the maximum amount that the Govt will contribute towards into the account each year definitely gives a better return than a high interest account. I think you'd have to not buy a house for a VERY long time after the 4 year mandatory contribution period for that to be negated…
The main consideration IMO is the 4 year period in which your funds will be stuck in the account - make sure you won't need the money for another use or for a deposit during that time.
A lot of banks have withdrawn the FHSA account, unless you had previously opened one. I know ME Bank and IMB still offer it to open. Mine is at CBA, but they no longer open new ones.
Have a look on Whirlpool forum, there are epic threads about FHSA, detailing from the very basic, to the ways and timing of deposits to maximise your return.