We look at simple ways to put this year’s tax cheque to good use.
How good is tax time? In exchange for a few hours filling out your tax return, you could receive a handy refund cheque. And with a bit of planning you could make the tax man’s refund go a lot further.
Grow your retirement savings
Using your tax refund to make a contribution to your super fund will boost the value of your nest egg. If your other half is a low income earner, consider using your tax refund to make a contribution to their super fund. You may be eligible for a tax offset worth up to $540.
Pay down debt
Some credit cards with the bells and whistles are charging interest rates close to 20% p.a. If that sounds like you, use your tax refund to pay down high interest debt, and take the opportunity to shop around for a cheaper card. If you’re paying more than 9.99% p.a. - the rate available on ME’s low rate credit card, you’re paying too much.
Get ahead with your home loan
Tipping a tax refund into your loan today can knock years off the term and save you a bundle in interest along the way.
Consider this. ME Flexible Home Loan customers could save around $10,852 in interest and could reduce the life of their loan by nine months simply by tipping a $5,000 tax refund after one year in into their home loan. This assumes a typical loan amount of $330,000 repaid over 24 years with a consistent variable rate of 4.88% p.a.* (comparison rate 4.89% p.a.)# and no redraws or additional repayments.
To check out the savings that apply to your loan, check out the lump sum repayment calculator at www.mebank.com.au – click on Calculators.
For more ideas on getting more value from your refund cheque call ME on 13 15 63 or visit mebank.com.au.
*Interest rate is current as at 21 July 2015 and is subject to change. #Comparison Rate for ME Flexible Home Loan of $150,000 for a term of 25 years. WARNING: The comparison rate is true only for the example given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Terms, conditions, fees and charges apply. Applications are subject to credit approval. Members Equity Bank Limited ABN 56 070 887 679 Australian Credit Licence 229500.