The award winning First Home Saver Account provides a unique way to ensure that you are financially ready when the time comes to purchase your first home. Not only is the balance augmented with interest payments and contributions from the Australian government, but withdrawals are not allowed until a deposit cap has been reached. If a home ownership is a dream for your near future, then this is an account that could help you achieve it.
Important InformationME Bank First Home Saver Account is no longer available for new applications. The information provided and bank account cannot be applied for, however, the information on this page has been kept for the benefit of existing customers and for those who are interested.
If you would like to compare other savings accounts, please go through our comparison page.
What are the features of the ME Bank First Home Saver Account?
While this is a unique type of savings account with a very specific purpose, it is still important that you first compare the following features with other bank’s saving products to help determine if this is the right way for you to secure a home in the future:
- Fees and charges. ME Bank will not impose any fees or charges on this account.
- Interest. The interest rate applied to your balance is variable, and is competitive with the prevailing market conditions.
- Interest calculations. Interest is calculated on the balance at the close of each day. It is then paid into the account at the close of the last day of the month.
- Restrictions. Withdrawals from the account are only allowed when they are going towards the construction or purchase of a new home in Australia and can only be made after you have made the minimum contribution for at least four years. It may also be used to add into your DIY Super if you opt not to buy a home. If you are aged 60 or over, you may withdraw the balance in one lump sum, and if you turn 65 you must close the account and either withdraw the money or move it into a Super. It is also important to note that after you do use the money saved towards the purchase of a new home, you must physically live in it for at least six months, starting no later than twelve months after settlement.
- Minimum deposit requirements. You must be able to save at least $1,000 annually in four separate financial years, although those years do not have to be sequential.
- Making deposits. You will need to nominate an account to be linked with this one, either with ME Bank or another Australian financial institution. You can then use internet or phone banking to make your deposits. Direct credit is also allowed, as well as deposits made by cheque.
- Balance cap. There is a maximum balance of $90,000 allowed.
- Government contribution. For every dollar deposited into the account up to $6,000, the Australian government will add a contribution of 0.17 cents. This contribution is made directly into the account after you have lodged your tax return and ME Bank has notified the Australian Tax Office (ATO) of how much you have contributed.
- Tax breaks. Interest earnings are taxed at a rate of 15%, paid for by the account provider. You are not taxed on yours or the government’s contribution, nor will there be a tax applied when you make a withdrawal towards the purchase of your first home.
- $0 account keeping fee.
- Joint application available.
How do you apply for an ME Bank First Home Saver Account?
Unfortunately first home saver accounts in Australia are no longer available. Any that were opened after 7:30 pm on 13 May 2014 are not entitled to receive a government contribution. The 2013-2014 fiscal year is the last in which those who already had a first home saver account active would receive a government contribution on their deposits. As of 1 July 2015 all restrictions on withdrawals have been removed on active accounts along with tax concessions, making these types of accounts no different than a standard, at call savings account.
The decision to abolish the first home saver account scheme was largely due to the low number of Australians who participated in the program. By the end of 2013, there were only 46,000 first home saver accounts opened, a big difference from the projected 700,000 that was targeted in 2012. As a result, the Australian Government made the decision in May of 2014 to abolish the program entirely.
If you held a first home saver account and believe that you did not receive all of the government contributions that you were entitled to, you have up until 30 June 2017 to make a claim with the Australian Tax Office.