Making sure you have the most-suitable accounts is crucial for your finances (Image: Getty Images)
Suffolk Building Society has launched a new House Deposit Savings Account. With rising house prices and the increasingly large mortgage deposits required, Suffolk Building Society has launched the account to help with home ownership. The account has a variable interest rate, annual bonus, and a £500 retail voucher when you go on to take out a mortgage with the Society.
The variable rate ensures savers receive a fair rate of return on all their money within the account, regardless of whether regular payments are maintained. It also has a fixed bonus which acts as an incentive for savers to put money aside regularly. Richard Norrington, CEO at Suffolk Building Society, said: “We have made our mortgages more flexible to support younger and first time buyers. This new savings product allows us to address the challenge from another angle – helping people build the mortgage deposit they so vitally need to unlock home ownership.”
It can be hard to get onto the property ladder (Image: Getty Images)
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The account is available to those aged 18-35 aspiring to buy their first home, or their next home, provided they do not currently own a property.
Richard Norrington adds: “Research from the Building Societies Association (BSA) shows that 53% of would-be first-time buyers see saving for a deposit as one of the biggest barriers to owning a home.
“For example, the national average for a 10% deposit is over £29k and East Anglia is close to that figure, so it’s easy to see why many young people feel the property ladder is slipping out of reach. That’s why we want to continue supporting those hoping to buy a home in the future.”
The account will allow individual or joint savers to deposit up to £1,000 per month (minimum £10), with a maximum balance of £36,000 permitted.
All accumulated funds will receive a variable interest rate, currently at 3.25%, calculated daily and paid annually.
Savers can keep the account open on a rolling basis for up to 10 years, rather than having to withdraw the funds annually – as would be the case with a standard regular saver.
On each anniversary of the account opening date, the Society will pay an additional fixed bonus of 1.5% on the money deposited during the preceding year.
The retail voucher can be redeemed once savers purchase a house (Image: Getty Images)
This bonus applies only to funds deposited in that year and not to the total account balance. To qualify, at least 11 monthly payments must be made during the year.
Savers are permitted one free withdrawal each year. More withdrawals are allowed, but this means savers forfeit the bonus for that year.
As an additional incentive to save for their home, each account will also be eligible for a retail voucher worth £500 if the holders complete on a mortgage with Suffolk Building Society.
Savers who complete their property purchase without taking a mortgage from the Society will receive a voucher of £150.
The retail voucher is currently redeemable with Argos, B&Q, Dunelm, or IKEA.
This example assumes continuous monthly contributions over 5 years, with no missed payments or withdrawals.
Richard Norrington continued: “This forward-looking approach will support the next generation of homeowners but is also very much grounded in the Society’s roots and founding purpose.
“We were founded over 175 years ago to help people to buy property to enable them to vote, so we still have an important role to play today in helping young people to get onto the property ladder.”
