Savings account – USA Prime Loans http://usaprimeloans.com/ Mon, 09 May 2022 20:29:45 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://usaprimeloans.com/wp-content/uploads/2021/10/icon-10-120x120.png Savings account – USA Prime Loans http://usaprimeloans.com/ 32 32 How to take advantage of the first housing savings account https://usaprimeloans.com/how-to-take-advantage-of-the-first-housing-savings-account/ Mon, 09 May 2022 20:29:45 +0000 https://usaprimeloans.com/how-to-take-advantage-of-the-first-housing-savings-account/ You are 2 minutes away from getting the best mortgage rates in CanadaAnswer a few quick questions to get a personalized quoteYou will leave MoneySense. Just close the tab to come back. All of the details surrounding the FHSAs have yet to be ironed out. The federal government plans to release more information in the […]]]>
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All of the details surrounding the FHSAs have yet to be ironed out. The federal government plans to release more information in the near future as it works with financial institutions to make the accounts publicly available next year. However, based on the information revealed in the 2022 budget, here’s what you need to know.

What is the first housing savings account?

When the first home savings account officially launches in 2023, it will allow Canadians 18 years of age or older who have not owned a home in the current calendar year or the previous four calendar years save up to $40,000 for the purchase of a home.

Jessica Moorhouse, millennial money expert and host of the More Money podcast, explains that FHSA combines elements of the Tax-Free Savings Account (TFSA) and Registered Retirement Savings Plan (RRSP), allowing holders account to store cash, stocks, bonds, mutual funds or ETFs. “However, it’s specifically for buying a home – and specifically for buying your first residence.”

What is the FHSA contribution limit?

FHSA account holders can contribute up to $8,000 per year, while receiving a tax deduction on contributions, similar to an RRSP. Additionally, any money withdrawn from an FHSA, as well as any investment growth in the account, is not taxed, as with a TFSA, as long as it is used towards the cost of a first home.

Account holders have 15 years from the time they open the FHSA to spend the money on their first home. If he doesn’t spend the money within that time, the account must be closed and the money transferred to an RRSP or Registered Retirement Income Fund (RRIF). Alternatively, account holders can still withdraw the funds from their FHSA at that time, but, if the funds are not used to purchase a home, they become taxable.

“The clock is ticking once you open this account and start saving,” says Moorhouse. “You really have strict guidelines to follow.”

How can first-time buyers benefit from the FHSA?

According to Moorhouse, anyone using an FHSA should be prepared to save as much money as possible as soon as they open the account. Account holders who do not reach their maximum annual contribution limit of $8,000 cannot carry it over to the next year. “You just lost that space,” she said. “If you’re going to use this account, you want to make sure you can max it out every year.”

She also recommends FHSA holders use the account for passive investments, like index ETFs, rather than just holding cash. Someone who contributes $8,000 to the account each year will reach the maximum lifetime limit in five years, giving them only 10 years to grow that money, before it needs to be transferred or withdrawn. The money saved “isn’t going to do much, just stay in cash with inflation [currently] at 6.7%,” says Moorhouse.

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Can you trust a savings account offering 20% ​​interest? https://usaprimeloans.com/can-you-trust-a-savings-account-offering-20-interest/ Thu, 05 May 2022 11:27:00 +0000 https://usaprimeloans.com/can-you-trust-a-savings-account-offering-20-interest/ The average interest rate on a typical US savings account is just 0.06% these days. Even the most generous banks do not offer more than 1% per year. Money market accounts aren’t much better, and even a high-yield certificate of deposit won’t protect your hard-earned savings from the ravages of inflation. But there are new […]]]>

The average interest rate on a typical US savings account is just 0.06% these days. Even the most generous banks do not offer more than 1% per year. Money market accounts aren’t much better, and even a high-yield certificate of deposit won’t protect your hard-earned savings from the ravages of inflation.

But there are new kids in town. You can think of cryptocurrencies as high-risk, high-reward bets, but there are also so-called stablecoins that produce extremely stable long-term charts – and some of the accounts associated with them have interest yields. two digits.

The Anchor Protocol account based on the TerraUSD (UST -0.17%) token is the most successful stablecoin solution I have seen. Let’s take a look at the pros and cons of putting your long-term savings there.

Image source: Getty Images.

What is the Anchor Protocol?

It doesn’t even look like a bank account at first glance, does it? From the name, you might think we were talking about a procedure to keep your boat in one place.

That’s not too far from the truth, in a metaphorical sense. Anchor Protocol is a money market system where people who want to borrow capital can connect with other people who want to earn a decent return on their cash. This is done through a decentralized finance application based on the Terra USD stablecoin, backed by collateral in the form of several different cryptocurrencies. The exact combination of collateral tokens is automatically managed by two different smart contract platforms, and ultimately managed by the Earth (LUNA -3.38%) blockchain.

The entire Anchor Protocol system currently holds $14.0 billion in deposited funds with $5.9 billion in collateral value. Today, about $3.1 billion is borrowed by users on the other side of the equation. The annual effective percentage yield (APY) for anchor protocol holders is 18%, and the annual effective percentage rate (APR) for borrowers is 10.6%. These values ​​fluctuate; the APY was 19.6% on April 30, for example.

You can get started with Anchor Protocol in several different ways. Its cloud-based dashboard lets you add money to your digital wallet through a credit card service or through the popular Apple Pay and Google Pay platforms. You can also find a decentralized finance application that has included a small amount of standardized code that adds Anchor protocol support to any software system. Or you can get really nerdy about it and run this code on your own computer.

But wait, there’s more! You can also buy Terra USD tokens directly and deposit them into an Anchor Protocol service. There are so many ways to go about it, and I’m probably still missing an option or two.

So this is it. With Anchor Protocol, you can earn a generous annual interest rate by letting others borrow your money through a decentralized finance app.

Good

The fundamentals of the pegging protocol are not that different from the money market accounts of an old-fashioned bank. Banks offer loans to certain people that are secured by assets invested by a different group. The technical machines and the actual assets involved may be different, but it’s a fairly familiar concept.

These annual interest rates are hard to beat. If you trust the pegging protocol to deliver returns at these levels for a long time, this seems like an obvious destination for your cash savings.

The bad

Traditional savings or money market accounts don’t change their returns very often. When they do, you will receive a letter in the mail explaining what is happening. In most cases, however, you can expect the return you signed up for to remain consistent over the years.

Anchor Protocol does not do this. Its effective return is adjusted monthly, aiming to stay within the 15-20% range. In May 2022, the target was changed from 20% to 18%, with the idea that this slightly lower rate would be more sustainable in the long term. Most Anchor Protocol users discovered this tweak the hard way and then had to research the official explanation themselves.

This rate cut illustrates a broader point. The terms and conditions of this ultra-generous system can change at any time. You can’t count on the “about 20%” target return to stay forever.

Additionally, the lack of a central bank with local branches and real people behind the counter may be a deal breaker for some savers. Anchor Protocol doesn’t have much of a customer service system unless you’re comfortable contacting developers and other users through online channels or social media.

The ugly one

If you just want a super simple savings account that will grow your money at a steady rate forever, Anchor Protocol isn’t for you.

Nor is it for you if you view cryptocurrencies as tulip bulb fad, as master investor Warren Buffett does.

Should you start an Anchor Protocol wallet?

This system isn’t for everyone, but I see its appeal in certain situations.

Anchor Protocol could be a great choice if you want inflation-beating interest rates and don’t mind the involvement of cryptocurrency technologies. It’s even better if you’re confident that stablecoins will really hold firm in the long run and that Terra USD is a reliable implementation of the stablecoins idea. Your returns may vary over time, but earning higher returns than you’d get from regular savings accounts shouldn’t be a problem.

Finally, to use Anchor Protocol, you will also need to be comfortable managing your savings through an unfamiliar system of cloud-based platforms and mobile apps.

That’s a lot of caveats. That being said, crypto investors who want to keep tabs on changes and the general health of Anchor Protocol may want to take a closer look at this high yielding platform.

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CBA fails to raise savings account rates but offers customers an olive branch https://usaprimeloans.com/cba-fails-to-raise-savings-account-rates-but-offers-customers-an-olive-branch/ Wed, 04 May 2022 10:19:50 +0000 https://usaprimeloans.com/cba-fails-to-raise-savings-account-rates-but-offers-customers-an-olive-branch/ Australia’s largest bank, CBA, will not pass on Tuesday’s cash rate hike to its savings accounts at this stage, despite rising variable rates on home loans. Westpac, NAB and ANZ all transfer 0.25 percentage points to their bonus savings accounts. Westpac also forwards the increase to its retiree account. Big Four Bank Savings Accounts – […]]]>

Australia’s largest bank, CBA, will not pass on Tuesday’s cash rate hike to its savings accounts at this stage, despite rising variable rates on home loans.

Westpac, NAB and ANZ all transfer 0.25 percentage points to their bonus savings accounts. Westpac also forwards the increase to its retiree account.

Big Four Bank Savings Accounts – what changed after the RBA?

What does CBA do for savers?

Instead of savings account hikes, the CBA is offering a special 18-month term deposit, at a rate of 2.25%, paid annually, for balances between $5,000 and less than $2 million , starting May 13.

The CBA Special Term Deposit is far superior to what the big four banks offer on 1 and 2 year term deposit accounts, however, it falls short of market leaders in this area.

The RateCity.com.au database shows that the highest 1-year term deposit rate is currently 2.70%, while the highest 2-year term deposit is 3.50% – both from Judo Bank. Macquarie Bank and AMP also offer higher rates than ABC.

After RBA Rise: Big Four Bank Bonus Savings Rates

Bank Account Increase Maximum rate Effective date
ABC GoalSaver

0%

0.25%

N / A

Westpac Life

+0.25%

0.50%

May 17

NAB reward saver

+0.25%

0.50%

May 13

ANZ progress saver

+0.25%

0.40%

May 13

Source: RateCity.com.au. Conditions apply for the maximum fare.

RateCity.com.au Research Director Sally Tindall said: “This is a hugely disappointing decision by the CBA. Savers at Australia’s largest bank have a right to feel ripped off.

“The bank offered nothing for children and nothing for regular savers,” she said.

“CBA has put a special 18 month term deposit on the table like an olive branch, but unless the bank’s saving customers proactively transfer their money to this account and lock it in for a year and a half , they’re going to miss that rate hike entirely.

“At 2.25 per cent for 18 months, this special term deposit is competitive, however, these types of products will not suit everyone.

“Westpac, NAB and ANZ all passed on the cash rate hikes to their popular bonus savings accounts, and it was the right thing to do. However, some of their customers with different accounts also missed out.

“The rise in the cash rate was supposed to mark a turning point for savers. Instead, it fell flat for millions of Australians.

“The irony is that the more money we put in the bank for a rainy day, the less banks are likely to offer competitive rates.

“Paying a higher interest rate on a record level of deposits will be quite expensive for Australia’s biggest banks, especially with many more cash rate hikes waiting in the wings.

“Now is the time for customers to take a health check of their savings account. There are still competitive rates, but they usually come with layers of fine print, so savers should make sure they are eligible,” she said.

Highest 1 Year Term Deposit Rates on RateCity.com.au

Bank Rate Interest Payment Frequency
judo bank

2.70%

Annually
Macquarie Bank

2.50%

Annually
AMP Bank

2.45%

Annually

Highest 2 Year Term Deposit Rates on RateCity.com.au

Bank Rate Interest Payment Frequency
judo bank

3.50%

At maturity
Macquarie Bank

3.30%

Annually
AMP Bank

3.25%

Annually

Highest term deposit rates for any term at RateCity.com.au

Bank Term Rate Interest Payment Frequency
judo bank 60 months

4.05%

At maturity
AMP Bank 60 months

3.90%

Annually
Macquarie Bank 60 months

3.50%

Annually

Source: RateCity.com.auThe above deposit rates apply to balances of $20,000.

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NAB and Westpac raise savings account rates after RBA rate hike https://usaprimeloans.com/nab-and-westpac-raise-savings-account-rates-after-rba-rate-hike/ Wed, 04 May 2022 03:59:52 +0000 https://usaprimeloans.com/nab-and-westpac-raise-savings-account-rates-after-rba-rate-hike/ Following the RBA’s decision to lift the cash rate, Westpac and NAB are breathing new life into savings accounts. Mortgage rates aren’t the only interest rates to rise after the RBA’s first cash rate hike in more than a decade, with Westpac and NAB being the first of the Big Four to report an increase […]]]>

Following the RBA’s decision to lift the cash rate, Westpac and NAB are breathing new life into savings accounts.

Mortgage rates aren’t the only interest rates to rise after the RBA’s first cash rate hike in more than a decade, with Westpac and NAB being the first of the Big Four to report an increase in mortgage rates. ‘saving.

Westpac

Westpac will increase the prices of its “Westpac Life”, “Westpac 55+ and Retired” products by 25 basis points from May 17, 2022.

Westpac’s new savings account rates are as follows:

  • Westpac Life Savings Account will grow up to 0.50% per year
  • Westpac 55+ and retiree savings account with balances of $0 to less than $9,999 will grow up to 0.30% per annum
  • Westpac 55+ and Retiree Savings Account on portion of balance from $9,999 to less than $49,999 will increase up to 0.30% per annum
  • Westpac 55+ and Retiree Savings Account on portion of balance from $49,999 to less than $249,999 will increase up to 0.35% per annum
  • Westpac 55+ and Retiree Savings Account on portion of balance $249,999 and above will increase by up to 0.50% per annum

Chris de Bruin, managing director of Westpac Consumer & Business Banking, said it would bring much-needed relief to savers after a long period of historically low interest rates.

NAB

NAB will increase the prices of its “Reward Saver” product offering by 25 basis points beginning May 13, 2022.

This increase will result in an increase in NAB’s Reward Savings Account rate up to 0.50% per annum

“Historically low interest rates have been difficult for our savings and deposit customers, including more than 1.3 million customers with a reward savings account. We want to support them as interest rates rise again,” said Rachel Slade, NAB Group Head of Personal Banking.

Savers seduced by alternative methods

Despite an increase in the savings account rate, Australians should continue to seek other methods of saving to maximize their potential returns.

Charlie Karaboga, CEO and co-founder of blockchain-powered fintech Block Earner said that for savers, the RBA’s 25 basis point hike will not close the 5.1% inflation gap.

“Unfortunately, Australia’s inflation problems are largely caused by factors outside the country, such as the war in Ukraine, and so a rise in interest rates is unlikely to bring inflation down before a some time,” Karaboga said.

“While the rate announcement is a step in the right direction, it highlights the archaic and outdated systems through which Australians are supposed to save for life’s major milestones such as retirement, entering the labor market housing or marriage.

“As inflation and interest rates continue to rise, now is the time for Australians to reconsider their investment strategies – dividing their savings more evenly between the worlds of traditional and decentralized finance.

“It’s a game-changer, especially for millennials who have struggled to get a head start on the homeownership ladder, and who will continue to do so if they aren’t exposed to a more diverse set of ‘savings and investment opportunities.’


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Need a place to store cash and earn interest? The table below shows savings accounts with some of the highest interest rates on the market.

Rates based on a savings balance of $10,000. Sorted by total interest rates. Check the providers’ websites for terms of bonus rates and applicable fees and charges. Rates correct as of May 4, 2022. See disclaimer.


Image by Joslyn Pickens via Pexels

The whole market has not been taken into account in the selection of the above products. Instead, a reduced portion of the market was considered. Products from some vendors may not be available in all states. To be considered, the product and price must be clearly published on the product supplier’s website. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au and Performance Drive are part of the Savings Media group. In the interest of full disclosure, Savings Media Group is associated with Firstmac Group. To learn how Savings Media Group handles potential conflicts of interest, as well as how we are paid, please visit the website links at the bottom of this page.

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Martin Lewis MSE’s ‘unbeatable’ savings account advice to Universal Credit seekers https://usaprimeloans.com/martin-lewis-mses-unbeatable-savings-account-advice-to-universal-credit-seekers/ Fri, 22 Apr 2022 10:44:47 +0000 https://usaprimeloans.com/martin-lewis-mses-unbeatable-savings-account-advice-to-universal-credit-seekers/ Martin Lewis’ team of monetary savings experts have issued advice on savings accounts to Universal Credit applicants. The advice was presented in the latest edition of the MoneySavingExpert newsletter. The finance guru has urged people to check their savings rate as the UK faces a cost of living crisis. The team said: “UK households are […]]]>

Martin Lewis’ team of monetary savings experts have issued advice on savings accounts to Universal Credit applicants.

The advice was presented in the latest edition of the MoneySavingExpert newsletter. The finance guru has urged people to check their savings rate as the UK faces a cost of living crisis.

The team said: “UK households are estimated to have set aside an additional £180billion in savings during the pandemic as many of those who could work from home had far lower costs. Yet rates of the lowest interest meant they were hardly rewarded for it.

READ MORE:A Martin Lewis fan cut his council tax bill by £700 with just one check

“The cost of living crisis means the rainy day savings have arrived for some as they may need to use those savings.”

The Money Saving Expert team also urged anyone on a low income to check if they are eligible for a huge boost under the government savings assistance scheme. They said, “For those who qualify, Help to save is unbeatable – it adds a 50% bonus on the highest amount of savings you have over two years. A lot of those who are eligible rave about it.”

Help to Save is a government savings account available to low-income workers applying for tax credits and Universal Credit. If you qualify, you’ll get an extra 50p for every £1 saved, meaning that over four years a maximum savings of £2,400 would result in an overall bonus of £1,200.

You’re free to pay as much as you want (up to £50 a month) so even if you part with £5 a month (£1.25 a week) – over two years you’ll get a £60 bonus £ taking your total pot to £180. Over four years, that would come to £360.

The scheme, designed to be “flexible and secure”, also hopes to inspire people to adopt a savings habit. How much is saved and when is up to the account holder, and they don’t need to pay every month to get a bonus. You can apply online here.

Martin Lewis warned that Help to Save encourages people in debt to save when they should be paying back their arrears, but said it was possible to get the best of both worlds.

He added: “The fact that you receive the bonus based on the highest amount you have saved, rather than the amount you actually have in there, means you can build your savings until you have an emergency that you would otherwise borrow to then use your savings instead of borrowing, but you will still be rewarded for saving in the first place.

“It’s a very smart ploy and will work for a lot of people. Of course, if you have extremely expensive debts, rather than saving, it’s better to try to clear them first.”

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Why aren’t interest rates on savings accounts going up too? – Boston News 25 https://usaprimeloans.com/why-arent-interest-rates-on-savings-accounts-going-up-too-boston-news-25/ Tue, 12 Apr 2022 07:00:00 +0000 https://usaprimeloans.com/why-arent-interest-rates-on-savings-accounts-going-up-too-boston-news-25/ Second. Galvin: Why aren’t interest rates on savings accounts going up too? Second. Galvin: Why aren’t interest rates on savings accounts going up too? BOSTON — Jen Skoglund is a stay-at-home mom of two in Westwood. She and her husband have been diligently building a nest egg for years. “For short-term savings, we don’t do […]]]>

Second. Galvin: Why aren’t interest rates on savings accounts going up too? Second. Galvin: Why aren’t interest rates on savings accounts going up too?

BOSTON — Jen Skoglund is a stay-at-home mom of two in Westwood. She and her husband have been diligently building a nest egg for years.

“For short-term savings, we don’t do much other than a savings account,” Skoglund said.

Skoglund doesn’t know how much interest they earn for their savings, but she knows it’s not much.

“It’s so low. I don’t even know the rate, but it’s very low,” Skoglund said.

Interest rates are rising on credit cards, loans and mortgages, but remain shockingly low on traditional savings accounts. The average national interest rate for a savings account is 0.06%, according to Bankrate.com.

Mass. Dry. Commonwealth William Galvin said there was no indication banks were planning to raise interest rates on savings accounts, and he doesn’t think that’s fair.

“I think it’s a double whammy for consumers,” Galvin said. “It’s a case where banks will win because they charge higher rates for their credit card and loan services, but consumers will simultaneously lose because they don’t benefit from the high interest rates that banks get. I think that’s wrong.”

Galvin’s office does not have the power to regulate banks, it happens at the federal level. But the Sec. of the Commonwealth oversees in-house banks that set up cash transfer accounts in Massachusetts. Sweep accounts are used by brokerage firms to hold investors’ money while waiting to be invested.

Galvin last month launched a survey of six financial institutions — TD Ameritrade, Merrill Lynch, LPL Financial, Ameriprise, Securities America and SoFi — to determine whether those banks planned to raise interest rates on sweep accounts. Galvin said his initial investigation revealed billions of dollars in Massachusetts sweep accounts.

“My request to these entities is how much are you going to raise your interest rates? And so far we are still waiting for a response,” Galvin said.

“You have to say something about it. We can’t just say too bad. It’s a significant amount of money,” he said.

Bankrate says people should consider putting their savings in online banks with a “high yield savings account”. Online banks can afford to offer better rates because they don’t have the same overhead costs as a traditional bank. According to Bankrate, online banks like Bask Bank, Lending Club and CIT Bank have interest rates ten times higher than the national average.

“A big difference between the savings accounts offered by online banks and those offered by traditional banks is the [Annual Percentage Yield] Free. Online banks generally offer much more competitive returns. Traditional banks tend to offer something closer to the national average, which is currently 0.06% APY, or they offer something close to nothing – 0.01% APY,” Bankrate said.

Skoglund said she and her husband would continue to build their savings, even if their current bank doesn’t reward them for it.

“We keep some of the savings, we invest some of them, but I mean the interest rates you get on a savings account, it’s just not worth it,” Skoglund said. .

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Follow Boston 25 News on Facebook and Twitter. | Watch Boston 25 News NOW

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Why aren’t interest rates on savings accounts going up too? https://usaprimeloans.com/why-arent-interest-rates-on-savings-accounts-going-up-too/ Mon, 11 Apr 2022 11:26:34 +0000 https://usaprimeloans.com/why-arent-interest-rates-on-savings-accounts-going-up-too/ Jen Skoglund is a stay-at-home mom of two in Westwood. She and her husband have been diligently building a nest egg for years. “For short-term savings, we don’t do much other than a savings account,” Skoglund said. Skoglund doesn’t know how much interest they earn for their savings, but she knows it’s not much. “It’s […]]]>

Jen Skoglund is a stay-at-home mom of two in Westwood. She and her husband have been diligently building a nest egg for years.

“For short-term savings, we don’t do much other than a savings account,” Skoglund said.

Skoglund doesn’t know how much interest they earn for their savings, but she knows it’s not much.

“It’s so low. I don’t even know the rate, but it’s very low,” Skoglund said.

Interest rates are rising on credit cards, loans and mortgages, but remain shockingly low on traditional savings accounts. The average national interest rate for a savings account is 0.06%, according to Bankrate.com.

Mass. Dry. Commonwealth William Galvin said there was no indication banks were planning to raise interest rates on savings accounts, and he doesn’t think that’s fair.

“I think it’s a double whammy for consumers,” Galvin said. “It’s a case where banks will win because they charge higher rates for their credit card and loan services, but consumers will simultaneously lose because they don’t benefit from the high interest rates that banks get. I think that’s wrong.”

Galvin’s office does not have the power to regulate banks, it happens at the federal level. But the Sec. of the Commonwealth oversees in-house banks that set up cash transfer accounts in Massachusetts. Sweep accounts are used by brokerage firms to hold investors’ money while waiting to be invested.

Galvin last month launched a survey of six financial institutions — TD Ameritrade, Merrill Lynch, LPL Financial, Ameriprise, Securities America and SoFi — to determine whether those banks planned to raise interest rates on sweep accounts. Galvin said his initial investigation revealed billions of dollars in Massachusetts sweep accounts.

“My request to these entities is how much are you going to raise your interest rates? And so far we are still waiting for a response,” Galvin said.

“You have to say something about it. We can’t just say too bad. It’s a significant amount of money,” he said.

Bankrate says people should consider putting their savings in online banks with a “high yield savings account”. Online banks can afford to offer better rates because they don’t have the same overhead costs as a traditional bank. According to Bankrate, online banks like Bask Bank, Lending Club and CIT Bank have interest rates ten times higher than the national average.

“A big difference between the savings accounts offered by online banks and those offered by traditional banks is the [Annual Percentage Yield] Free. Online banks generally offer much more competitive returns. Traditional banks tend to offer something closer to the national average, which is currently 0.06% APY, or they offer something close to nothing – 0.01% APY,” Bankrate said.

Skoglund said she and her husband would continue to build their savings, even if their current bank doesn’t reward them for it.

“We keep some of the savings, we invest some of them, but I mean the interest rates you get on a savings account, it’s just not worth it,” Skoglund said. .

Download the FREE Boston 25 News App for the latest news alerts.

Follow Boston 25 News on Facebook and Twitter. | Watch Boston 25 News NOW

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A Canadian tax-free savings account for first-time home buyers is in the works https://usaprimeloans.com/a-canadian-tax-free-savings-account-for-first-time-home-buyers-is-in-the-works/ Fri, 08 Apr 2022 21:55:54 +0000 https://usaprimeloans.com/a-canadian-tax-free-savings-account-for-first-time-home-buyers-is-in-the-works/ The federal government presents more support to reduce one of the biggest hurdles for young people trying to break into a tough real estate market: down payments. As part of Budget 2022, first-time home buyers can now benefit from a tax-free savings account and an increased tax credit to help cover the cost of a […]]]>

The federal government presents more support to reduce one of the biggest hurdles for young people trying to break into a tough real estate market: down payments. As part of Budget 2022, first-time home buyers can now benefit from a tax-free savings account and an increased tax credit to help cover the cost of a down payment.

Just like a Registered Retirement Savings Plan (RRSP), contributions to a First Home Tax-Free Savings Account (FHSA) are tax deductible. Withdrawals from an FHSA for the purchase of a home are not taxable.

Starting in 2023, annual savings of $8,000 per person (up to a maximum of $40,000) can be used to purchase a first home. Individual Tax-Free Savings Accounts can be pooled for households investing together in real estate.

Any Canadian resident 18 years of age or older can qualify to open an FHSA, as long as they have not owned a home within the previous four years.

To help potential buyers save for a home, the government is also doubling the first-time home buyer’s tax credit to $10,000. The credit provides up to $1,500 in direct support to homebuyers and can apply to homes purchased on or after January 1 of this year.

Meanwhile, the First-Time Home Buyer Incentive allows eligible first-time home buyers to reduce borrowing costs by sharing them with the government.

The Shared Mortgage Program allows buyers to borrow 5% or 10% of the purchase price of a home and then pay off the same percentage of the home’s value upon sale (or within 25 years) .

This means that someone who gets a 10% incentive to buy a house for $200,000, or $20,000, will have to pay back $15,000 if the value of their house drops to $150,000.

The budget changes are aimed at tackling rising house prices across the country. In Montreal, the average sale price of a home reached $583,295 last month, marking an 18% increase since last year and an absolute record.

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A tax-free savings account is coming for new homebuyers. What do you want to know https://usaprimeloans.com/a-tax-free-savings-account-is-coming-for-new-homebuyers-what-do-you-want-to-know/ Fri, 08 Apr 2022 17:56:13 +0000 https://usaprimeloans.com/a-tax-free-savings-account-is-coming-for-new-homebuyers-what-do-you-want-to-know/ Starting in 2023, first-time home buyers could save up to $40,000 in a new savings account – the Tax-Free First Home Savings Account.Graeme Roy/The Canadian Press Finance Minister Chrystia Freeland’s 2022 federal budget unveiled $10 billion in new spending aimed at addressing the affordability challenge for potential home buyers with a series of proposals. In […]]]>

Starting in 2023, first-time home buyers could save up to $40,000 in a new savings account – the Tax-Free First Home Savings Account.Graeme Roy/The Canadian Press

Finance Minister Chrystia Freeland’s 2022 federal budget unveiled $10 billion in new spending aimed at addressing the affordability challenge for potential home buyers with a series of proposals. In addition to money for building new homes, curbing speculation and foreign buyers, the Liberal budget also introduced the Tax-Free First Home Savings Account (FHSA), which aims to help future owners to buy their first home. Here’s what’s included in the new program.

What is the First Tax-Free Housing Savings Account?

Starting in 2023, first-time home buyers could save up to $40,000 in a new account. As with a Registered Retirement Savings Plan (RRSP), contributions – in this case, up to a maximum of $8,000 per year – would be tax deductible. Unlike an RRSP, the annual contribution the contribution limit for the FHSA would not be carried over. You can hold multiple FHSAs, but the combined contributions cannot exceed the annual or maximum limits.

As with a Tax-Free Savings Account (TFSA), withdrawals for the purchase of a new home would be tax-free. Investment growth inside the account would also be tax-free.

If FHSA funds are not used within 15 years of first opening the account, the account will need to be closed and the unused savings transferred to an RRSP or RRIF, or withdrawn on a taxable basis.

Why did the government introduce it?

Much of the focus in the budget — and billions in new spending — is on housing affordability. The typical price of a house in Canada has skyrocketed 51% in the past two years alone, fueled in part by speculators and record mortgage rates now heading higher.

According to the Canadian Real Estate Association (CREA), the national home price index rose a record 3.5% to $868,400 in February. The Bank of Canada also raised its benchmark interest rate in March for the first time since 2018, which impacted borrowing costs and mortgage lending.

The budget focuses on increasing the supply of housing in Canada. A January report from the Bank of Nova Scotia found that among the G7 countries, Canada had the lowest number of homes relative to its population. Supply was particularly low in Alberta, Manitoba and Ontario. To match G7 peers in housing supply per capita, Scotiabank estimated that Ontario would need an additional 1.2 million units, highlighting the lack of availability in key markets.

The Liberals first offered this savings account as a 2021 federal election campaign promise to “allow Canadians under 40 to save up to $40,000 for their first home and withdraw it tax-free for the purchase of their first home, with no obligation to repay. this.”

“As house prices rise, so does the cost of a down payment,” the government said in Thursday’s budget. “This presents a major hurdle for many people who want to become homeowners, especially young people.”

Who is eligible?

When the liberals offered the savings account during the election campaign last fall, it had an age limit of 40 years. The age limit was removed in the budget.

How much can you set aside each year?

You can deposit up to $8,000 per year into an account, with a lifetime contribution limit of $40,000. Unused annual contribution space cannot be carried forward.

When will it be available?

The FHSA is due to launch in 2023. The government has said it will work with financial institutions to ensure accounts can be opened for contributions that year.

Can potential home buyers use their RRSP and FHSA money to buy a home?

The government says Canadians will still be allowed to borrow from their RRSPs through Ottawa’s Home Buyers’ Plan (HBP) under its current rules. However, they will not be allowed to make both an FHSA withdrawal and a RAP withdrawal to pay for the same home purchase. The HBP allows you to withdraw up to $35,000 tax-free from an RRSP to buy a first home.

“Once the FHSA is introduced next year, it will make sense to use it first, then, once you’ve contributed the $40,000 maximum, switch to a TFSA,” suggests the finance columnist. personal Rob Carrick.

How much will the program cost?

According to the budgetthe government estimates that the FHSA program would cost $725 million in tax revenue over five years.

What else has Ottawa promised to do about housing affordability?

The budget promises $10 billion to make housing more affordable, including funds to build new homes and curbs on speculation and foreign buyers.

Ottawa would provide $4 billion through the Canada Mortgage and Housing Corporation to build 100,000 new homes over the next five years. Another $1.5 billion would be used to create 6,000 affordable housing units over the next two years.

With few exceptions, the federal government is also proposing to tax gains on the sale of primary residences by homeowners who hold a property for less than 12 months, a key election platform promise intended to discourage house flipping.

The federal budget also doubles a refundable tax credit for Canadians who start building a home, increasing the first-time home buyers’ tax credit to $10,000. and proposes a two-year ban on purchases of residential real estate by foreign buyers – all with the aim of making housing more affordable for Canadians.


With files from Matt Lundy, Jason Kirby, Erica Alini and The Canadian Press.


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Budget 2022: Ottawa creates a new tax-free savings account for first-time home buyers https://usaprimeloans.com/budget-2022-ottawa-creates-a-new-tax-free-savings-account-for-first-time-home-buyers/ Thu, 07 Apr 2022 21:59:00 +0000 https://usaprimeloans.com/budget-2022-ottawa-creates-a-new-tax-free-savings-account-for-first-time-home-buyers/ Craig Wong, The Canadian Press Posted Thursday, April 7, 2022 5:59 PM EDT Last updated Thursday, April 7, 2022 5:59 PM EDT OTTAWA – Canadians looking to save a down payment to buy their first home will have a new tax-free savings account to use starting […]]]>




Craig Wong, The Canadian Press



Posted Thursday, April 7, 2022 5:59 PM EDT





Last updated Thursday, April 7, 2022 5:59 PM EDT

OTTAWA – Canadians looking to save a down payment to buy their first home will have a new tax-free savings account to use starting next year.

The federal government on Thursday announced the Tax-Free Home Ownership Savings Account (FHSA) in the budget along with doubling the tax credit for first-time home buyers to $1,500 in a bid to make buying a home a little easier. .

Home prices in Canada have soared over the past year as Canadians flocked to the housing market during the pandemic, making it difficult for many to get a foothold.

According to the Canadian Real Estate Association, the national average house price hit a record high of $816,720 in February, up more than 20% from a year earlier.

“As house prices rise, so does the cost of a down payment,” the government says in the budget.

“This presents a major hurdle for many people wishing to become owners, especially young people.”

Contributions to the new accounts will be tax deductible, just like registered retirement savings plan (RRSP) contributions, and money in the accounts and any investment gains will not be taxed when withdrawn for buy a qualifying first home.

The accounts will have a lifetime limit of $40,000 on contributions and an annual contribution limit of $8,000. Unused annual contribution room will not be carried over.

In addition to the sharp rise in house prices, Canadians are feeling the brunt of inflation as rising prices for everything else put further strain on already stretched household budgets.

Borrowing costs are also rising as the Bank of Canada raises its key interest rate target, which has a direct impact on variable rate mortgages. Fixed-rate mortgage rates have also increased, increasing costs for first-time buyers opting for more certainty in their mortgage interest rate as well as for those who need to renew their mortgage.

Mathieu Laberge, advisory services partner and regional economic and political leader at KPMG, says the new savings account encourages people to save for a down payment on a first home.

“What first-time home buyers are struggling with right now is accumulating enough capital for a down payment,” says Laberge.

“I think it was designed to maximize savings incentives in the sense that it’s like an RRSP. The amounts you deposit in the account are in fact tax-free and when you withdraw them, unlike an RRSP, you are not taxed on them.

Laberge says some potential buyers could also use the accounts to save a bit longer than they otherwise would and accumulate a bit more before moving, which could dampen demand.

James Laird, co-founder of Ratehub.ca and president of mortgage brokerage CanWise Financial, was disappointed that the home value limit to qualify for mortgage loan insurance had not been raised by $1 million. dollars to $1.25 million, but praised the new savings accounts.

“It’s a very solid tax-free vehicle that will actually help Canadians who are trying to save for a down payment,” says Laird.

The new account is in addition to tax-free savings accounts that allow investments to grow tax-free, but do not generate a tax deduction when you make a contribution.

Homebuyers can also withdraw up to $35,000 from their RRSP accounts to help buy a home, but that money must be repaid.

The government says Canadians will still be allowed to access their RRSP savings through the Home Buyers’ Plan (HBP) under existing rules, but they won’t be allowed to make both an FHSA withdrawal and an HBP withdrawal to pay for the same qualifying home.

Individuals will also be allowed to transfer funds from an RRSP to an FHSA tax-free, subject to annual and lifetime contribution limits.

If an investor does not use their FHSA money for a first home purchase within 15 years of first opening the account, the account will need to be closed. Any unused savings can be transferred to an RRSP or RRIF or withdrawn on a taxable basis.

The new savings accounts are similar to a home ownership savings plan that Pierre Trudeau introduced in 1975 that research shows facilitated the transition from renting to home ownership, but was largely motivated by high-income households before the Mulroney government canceled the program in 1985.

Additionally, the budget includes a new multi-generational home renovation tax credit worth up to $7,500 that will help pay for renovations needed to build a secondary suite for a senior or adult with a disability. .

The budget also includes $475 million in 2022-23 for a one-time $500 payment to people facing housing affordability issues, but does not include specifics.

This report from The Canadian Press was first published on April 7, 2022.

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