First Home Saver Accounts return 34%

26/02/2010

Just 15,300 First Home Saver Accounts have been opened (as of September 30) and they hold a total of $49.3 million, or an average of $3222 according to data released by the Australian Prudential Regulatory Authority.

"First Home Saver Accounts haven't been a very popular type of account despite the fact that they can provide an excellent effective return on savings," says the chief executive of InfoChoice, Shaun Cornelius.

Someone who opens an FHSA with a $2000 deposit then contributes $1000 a year, earning 4.5 per cent interest, could achieve an effective return of 29 per cent once the co-contribution is taken into account.

They'd have contributed $6000 but earned $731 in interest and received $1020 from the government. The top rate on offer for an FHSA is 6.25 per cent, from ME Bank.

Australians aged 18 and over can open an FHSA to save for their first home. The government makes a contribution of 17 cents for every dollar of the first $5000 saved each year, up to $850 a year.

Source: The Age