In its recent Budget the Australian Government has announced proposed changes to the way savings accounts will be taxed. The plan is to halve the amount of tax paid on the first $1000 of interest earned in savings accounts from 1st of July 2011.
At the moment, we all pay tax on the interest gained from a savings account. When it's time to take care of your personal taxes, you have to declare the amount you earned from your savings account and this affects your overall tax refund. The government is hoping to change the rules so that if your savings account generates $1000 in interest, you will only have to pay tax on the first $500.
The Government is hoping the change will boost the nations savings habits and increase competition in the savings and term deposits market. Reducing the amount of tax people pay on savings accounts makes these products more competitive against other kinds of investments like shares. It is estimated that the tax break will be of most benefit to those on low incomes who dont have the revenue streams to spend on larger investments.
We welcome the proposed changes as they will help to make our already competitive savings products that much better. If you would like to find out about our current range of savings options please visit the Savings section on our website, www.selectcu.com.au.
Alternatively, you can contact one of our experienced customer service staff on 1300 13 14 20 who can help you find the most suitable savings options for you
