A First Home Saver Account is a great way to save your way into the property market if you need to wait a bit.

Piggy bank for growing your deposit money.

The Australian Federal Government released its First Home Saver Accounts through banks to the public in (2007-08).

The basic premise of these accounts is that you put your money in regularly over a minimum of 3 years, and the government will add 17%pa to the amount saved in each financial year. The amount they give you is capped at 17% of your contributions up to $5000 (around $850 per year).

Anything you save over this amount, you will have to rely on whatever interest rate the bank is offering for your FHSA. This is a bonus though: The bank will still be paying you a percentage on the first $5000 each year as well, so you get interest contributed from two sources!

These accounts are designed to be offered with no account keeping fees to eat into your balance, and there is no minimum monthly balance required.

The catch with the FHSA is that you cannot withdraw the money unless it is to buy your own home (your PPOR) under the First Home Owners Grant. The only other thing you can do with it if you decide not to buy a home, is transfer it into a super fund. You also have to leave the money there for a minimum of four years before you purchase, which means that you are stuck if you decide to jump into the market earlier, so they are definitely not for everyone.

There is more information, including fact sheets, available from the Australian Treasury's Home Saver Accounts Home Page.

If you want to know more about the First Home Owners Grant, jump from First Home Saver Accounts back to Financing Rental Property.