Reap the ben­e­fits from long-term sav­ings

Whitsunday Times - - REAL ESTATE RESIDENTIAL -

IF YOU are try­ing to save a de­posit for your first home, you may be find­ing it chal­leng­ing to keep a reg­u­lar flow of sav­ings that you don’t dip into.

Lock­ing your money away in a sep­a­rate sav­ings ac­count or term de­posit is an easy way to tackle this prob­lem, and earn ex­tra in­ter­est on your nest egg too, Choice Home Loan says.

Most banks of­fer high in­ter­est sav­ings ac­counts which you can link to your reg­u­lar ev­ery­day ac­count, mak­ing it easy for you to con­trib­ute reg­u­lar funds from your salary.

Th­ese will usu­ally earn ad­di­tional in­ter­est to your ev­ery­day ac­count, and re­strict your trans­fers out of the ac­count (for in­stance, you may not be able to use the ac­count to pay bills or your credit card).

This will limit the ex­tent to which you are able to dip into this money for other pur­poses than sav­ings.

Term de­posits are an­other way you can boost your sav­ings while mak­ing it more dif­fi­cult to ac­cess your money.

Term de­posits lock your money away for a set amount of time — for in­stance, one to two years — while earn­ing what is usu­ally a higher rate of in­ter­est than a nor­mal sav­ings ac­count.

You will need to en­sure you def­i­nitely do not want to ac­cess this money for any rea­son though, as you may have to pay fees and charges to with­draw it ear­lier than the locked in term.

Lock­ing your sav­ings away can help you get to your de­posit goal faster.

Re­mem­ber, the more reg­u­lar a sav­ings plan you can show when you ap­ply for home loans, the more likely it is that a lender will con­sider you a good can­di­date for a mort­gage.

If you are sav­ing for a prop­erty and are think­ing about ways you can earn a de­posit, Choice Home Loans can help.

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