Saving money for a deposit on a house — especially if it's your first home — can be intimidating. Where will the savings come from? What's the best way to make it grow? A high yield savings account may be the best strategy for building your down payment.
Keep reading to learn more about saving for a deposit on a house.
The first step in saving for a deposit on a house is to determine your budget for a new home. Once you've done the math to determine how much house you can afford, you're ready to think about the down payment.
Many lenders require a down payment of at least 20% of the price of the house. However, there are other financing options that allow you to put down much less.
In setting your goal for a deposit, remember that saving as much as you can for a down payment will ultimately help you to secure the best interest rate and decrease your overall mortgage amount.
It is easy to get overwhelmed by the thought of saving tens of thousands of dollars — so try breaking up the total amount into yearly, monthly and even weekly goals. If saving $30,000 seems impossible, consider saving it over a period of years.
A goal of saving $10,000 per year translates to a little over $800 a month, or $200 a week. See where you can trim expenses or cut waste to meet that goal.
Experts advise that one of the smartest strategies for a short-term financial goal, such as saving for a down payment, is also the simplest. Consider putting your savings into a low-risk, high yield deposit account where it can grow.
Since you have an immediate goal for your deposit, consider avoiding high-risk financial activities such as trading in securities. A savings account or money market deposit account offers a secure and low-risk environment to grow your funds. Also, look for deposit accounts that are FDIC-insured for extra protection.
Synchrony Bank offers award-winning deposit products, with no minimum deposit requirements and no fees as well as perks including reimbursement of ATM fees—all of which can help you save more toward your goal of a large down payment.
FDIC insures our customers up to $250,000, per depositor, per insured bank, for each ownership category.
Opening a savings account with Synchrony Bank means that you can access your account online, at an ATM and by phone. Find us online or call 1-844-345-5789 to learn how Synchrony Bank can help you save for a deposit on a house.
*ANNUAL PERCENTAGE YIELD (APY): All APYs are accurate as of .
APYs are subject to change at any time without notice. Offers apply to personal accounts only. Fees may reduce earnings. For Money Market and High Yield Savings Accounts, the rate may change after the account is opened. For CDs, a minimum of $2,000 is required to open a CD and must be deposited in a single transaction. A penalty may be imposed for early withdrawals. After maturity, if you choose to roll over your CD, you will earn the base rate of interest in effect at that time. The APY shown for CDs and IRA CDs is for a 60-month CD with a balance of at least $25,000. Click here for all CD rates and terms offered.