(1888PressRelease)
November 26, 2008 - First Home Saver accounts work by boosting savings and encouraging a more disciplined savings approach.
With every dollar saved in the account each year the Government will contribute a bonus 17 cents (on savings up to $5,000 a year), plus.
Interest earned on first home saver accounts is taxed at 15% rather than the account holder’s marginal income tax rate.
Withdrawing money is tax free.
First Home Saver Accounts - http://www.FirstHomeSaver.com.au - have incentives that make the accounts considerably more attractive than a regular savings account, but there are some rules to be aware of.
First Home Saver account holders must contribute at least $1,000 in each of four separate financial years (not necessarily consecutively) before they can access their savings - though the money can also come from friends, family or employers.
Total savings are limited to an account balance of $75,000 (this amount is indexed) and must be used to buy or build a first home to live in - the scheme is not for investment property, and penalties apply if the funds are used for other purposes.
To provide Aussies with a clear picture of the savings potential First Home Saver accounts have over regular savings accounts, the website FirstHomeSaver.com.au has launched an online First Home Saver account calculator - http://www.FirstHomeSaver.com.au/calculator. The First Home Saver account calculator uses income and savings variables to project a final balance, with the outcome then compared to a regular savings account, highlighting the additional savings that could be accumulated via the new special purpose savings accounts.
"The success of first home saver accounts will require savers to immediately see the benefits of having an account, and being able to understand the potential impact on their savings for a first home" says a spokesperson for FirstHomeSaver.com.au. "The First Home Saver account calculator is designed to provide that information".
Research undertaken by FirstHomeSaver.com.au shows there is strong interest in the scheme, with 89% of young Aussies surveyed considering opening a First Home Saver account. Despite this just two of the major banks and several credit unions have elected to offer the accounts, while none of the major super funds have shown any interest.
Further details of how First Home Saver accounts work can be found at online at http://www.FirstHomeSaver.com.au/facts/how-does-it-work.
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