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Lenders are very interested in borrowers demonstrating a savings pattern, which helps to show you have the capacity to make loan repayments when you decide to purchase.

If you are borrowing over 85% of the purchase price, lenders will want evidence that you actually saved 5% of the purchase price yourself. This is called Genuine Savings and is evidenced by providing a savings statement for 3 months when you apply for a loan.

What are the different types of accounts I can use to grow my savings?

First Home Saver Account
The First Home Saver Account is a special type of savings account, where you can save for your deposit for your first home and receive some government help in doing so. There are two benefits that it provides.

Firstly the Government will contribute a proportion of your own contributions into the account each year. It amounts to 17% of your personal contributions, with the maximum being $1,020 in 2012-13. Secondly, any interest earned will be taxed at a flat rate of 15% which may reduce the tax on your interest income.

There are limitations and conditions that you will want to weigh up carefully before determining whether or not it is right for you. Always read the fine print which can be found at https://www.moneysmart.gov.au/managing-your-money/banking/savings-accounts/first-home-saver-accounts, and seek the advice of a licensed professional.

Standard savings accounts
Normal transaction accounts can pay next to nothing in interest and may have fees associated with them. To make the most of your savings you may need to look at other types of savings accounts that pay a higher rate of interest and don't have fees. Keeping your savings in a separate account may also be a good way to keep it separated from money you use for general living expenses.

Term deposits
Term deposits offer different rates of interest for different terms. This means that your funds will be locked away for that term to generate these higher returns. Term deposits lack flexibility and there are penalties for early withdrawal.

High interest savings accounts
Nowadays there is a wide variety of savings accounts that differ from traditional bank products. Online accounts offered by smaller institutions as well as some of the banks, can offer very competitive interest rates and tend to have more flexibility than traditional term deposits. Some even offer bonus interest for making regular contributions. Be sure to compare all relevant features including fees and minimum balances to take advantage of these.

Other investment options
Definitely look around at other investments that will help your savings grow quicker. Be cautious though if the return seems too good to be true, as the reason they are offering high returns could be because the risk could also be high. Again, seek professional advice regarding the type of investments you choose.