First home saver accounts not popular

According to the mutual industry body Abacus, first home saver accounts have failed to attract deposits and need to be overhauled if they are going to be of value to first home buyers who are saving for their first home. According to data from the Australian Prudential Regulation Authority, at September 2009, the amount in first home saver accounts was approximately $43.9 million.

The Australian government launched the first home saver accounts in 2008 and estimated they would hold $4 billion of savings after four years of operation.

Abacus wants the Australian government to change the conditions of the savings product so that savers are not locked in for the long term. A spokesperson for ME Bank, which is the FHSA market leader, agreed that deposit flow was slow and that customers baulked at the requirement to keep the money in the account for four years.