First Home Saver Account FAQ
What are the eligibility requirements to open an account?
What will you be required to provide to set up an account?
Is there a minimum contribution amount to open or maintain my account?
How long can the account remain open?
Is there a minimum time period that money is tied up?
Who can make contributions to my account?
Can I make salary sacrifice contributions to my account?
Is there a limit on contributions made to the account?
When is the government contribution paid?
When can I withdraw my savings?
Do I still get the First Home Owners Grant?
What if my circumstances change or I change my mind about buying or building my first home?
Can I have my money released early?
Can anyone open an account?
Accounts can only be opened in your own name (not jointly with others), and eligibility requirements must be met.
What are the eligibility requirements to open an account?
There are a few simple eligibility rules to open a First Home Saver Account; generally, you must:
- Be aged at least 18 and under 65;
- Have not previously owned a home in Australia that was your main residence;
- Not currently have or have not previously had a First Home Saver Account (except in limited circumstances); and
- Provide your tax file number (TFN).
Penalties will apply if a person falsely declares that they are eligible to open an account.
What will you be required to provide to set up an account?
- A TFN;
- Proof of identity; and
- A completed application form, which includes a declaration that you are eligible (part of the application form).
Is there a minimum contribution amount to open or maintain my account?
No minimum deposit is needed to open or maintain the account.
How long can the account remain open?
The account can remain open for as long as you are saving for your first home, but must be closed if you cease to meet the eligibility requirements (for example, you reach age 65).
Is there a minimum time period that money is tied up?
First Home Saver Accounts are designed to encourage people to develop good savings habits and, generally, before you can withdraw funds, the account must have received contributions of at least $1,000 in each of four or more financial years (not necessarily consecutive).
Who can make contributions to my account?
Contributions may be made by you or by another party, such as an employer or a relative, on your behalf.
Can I make salary sacrifice contributions to my account?
No, all contributions must be from after-tax income, and a tax deduction cannot be claimed.
Is there a limit on contributions made to the account?
There is no limit on contributions made to the account, but there is a limit of $75,000 (indexed) on the overall account balance.
If you reach the account balance cap, no further individual contributions can be made. You will still earn interest on your account.
How do I make contributions?
Contributions can only be made electronically via direct credit into your account.
What is the tax rate?
Contributions will not be subject to tax when deposited into the account. Interest will be taxed at a rate of 15%.
Withdrawals will be tax free if they are made in accordance with the rules governing First Home Saver Accounts. First Home Saver Account balances will be exempt from the income and assets test for social security purposes.
When is the Government contribution paid?
The Government will contribute 17% on the first $5000 (indexed) of individual contributions made each year. This means an individual who contributes $5000 in one year will receive a Government contribution of $850.
The Government contribution will be paid directly into your account, after you have lodged your tax return and Members Equity Bank has submitted the relevant information to the ATO. If you do not lodge a tax return for that financial year, you will need to notify the ATO of your eligibility to claim the Government contribution.
When can I withdraw my savings?
Withdrawal can generally only be made when contributions of at least $1,000 have been made in four separate financial years.
You will be able to withdraw your account balance tax free to buy or build a first home in which to live. The full amount will need to be withdrawn and the account closed. You will need to make the home your main residence for at least 6 months within the first 12 months after purchase or completion of construction.
If you are purchasing a property with another individual(s) who also has a First Home Saver Account, only one account holder needs to meet the four-year requirement. If one person meets this, then the other individual(s) can also withdraw their funds.
You can also close your account and contribute the full amount to a complying superannuation fund account at any time.
Penalties will apply to individuals where they receive a payment from a First Home Saver Account but fail to meet the withdrawal or occupancy criteria.
Do I still get the First Home Owners Grant?
The First Home Owners Grant (FHOG) is a separate scheme to First Home Saver Accounts, and will continue to be available to individuals who are eligible.
What if my circumstances change or I change my mind about buying or building my first home?
Where your circumstances change during the life of the account and you no longer wish to purchase or build your first home, you will not be able to access the balance of the account, but you can transfer the balance into your superannuation fund and close the account.
If you move overseas, you can continue to make contributions into the account, but will not be eligible to receive any Government contributions.
You will be able to access your funds tax free once you reach the age of 60, consistent with superannuation rules.
Can I have my money released early?
If you have transferred the account balance into superannuation, that money can only be released if permitted under superannuation law. In your superannuation fund, it will be treated like any other preserved superannuation money. In certain circumstances, superannuation can be released early due to severe financial hardship, compassionate grounds or terminal illness.
* Interest rate will be fixed until 28-Feb-2009. After 28-Feb-2009, the interest rate reverts to the standard variable FHSA interest rate which is currently 8.00% p.a. and is subject to change.
The information on this website is of a general nature only and has been prepared without taking account of your objectives, financial situation and needs. Before acting on the information, you should consider the appropriateness of the information having regard to your objectives, financial situation and needs.
To obtain a copy of the Product Disclosure Statement for the Members Equity Bank First Home Saver Account, please call Members Equity Bank on 13 15 63. You should consider the Product Disclosure Statement in deciding whether to acquire, or continue to hold, a Members Equity Bank First Home Saver Account.
The Members Equity Bank First Home Saver Account is issued by Members Equity Bank Pty Ltd (ABN 56 070 887 679 AFS Licence: 229500).
For information about First Home Saver Accounts generally you may wish to visit the ATO website or the ASIC website.
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