Join our investing community

First Home Saver Question

Discussion in 'General Investing Discussion' started by BuffettTheDog, 24th May, 2011.

  1. BuffettTheDog

    BuffettTheDog Active Member

    Joined:
    22nd May, 2011
    Posts:
    35
    Location:
    Melbourne, VIC
    Hi, I am still in uni and am a bit clueless about how our tax system works. Please bear with me if this is a stupid question :)

    I am reading the ME Bank description of its First Home Saver product: "Investment earnings (or interest) will be taxed at 15%". I don't understand if this supposed to be good or mediocre. (Or whether it being good or mediocre is dependent on what tax bracket I am in.)

    What rate of tax is applied to the interest earned from my normal online savings account? (I earn less than $6,000 a year, so I was under the impression that my tax would be nil. Hence, why is 15% tax an incentive?)
     
  2. Johny_come_lately

    Johny_come_lately Well-Known Member

    Joined:
    1st Jul, 2009
    Posts:
    703
    Location:
    SE Queensland
    Hi,

    I imagine you would be able to get a tax return at the end of the financial year. Having a 15% cap on this savings account is marketing it towards higher tax threshold investors.




    J.
     
  3. BuffettTheDog

    BuffettTheDog Active Member

    Joined:
    22nd May, 2011
    Posts:
    35
    Location:
    Melbourne, VIC
    Ah, I see. Thanks for the reply.