Where to park savings

Hi all,

My partner and I are currently purchasing our second IP.
We rent and have no non tax deductible debt.
I'm unsure as to where we start accumulating our savings after the property is finalised.
Do we use one of our offset accounts or keep using a seperate savings account.
Our accountant advised to use a savings account after our first IP using the offset reduces the amount of interest claimable.
I'm guessing it would work out close to the same as your paying less repayments.
All advice welcome

 

It would depend.

There may be a strategy available if one of you earns less than the other. This could allow more income to the lesser income earner to offset a decision to own it 50/50 for example.

 

Yes, Ive always thought its a good idea to pay an extra $1 in interest to save $0.30c in tax.

Blacky

 

Unless one of you is not working this is very strange.

Would you rather earn 4.5% and pay tax or 2.5% and pay tax?

 

We both earn just under $100k. We have the first IP 50/50 and we're planning on doing the same for our second .

 

I thought it sounded a bit backwards but trusted him. I guess we will use an offset from now on and maybe look for a new accountant.

 

In that case there is no point in putting the savings into a savings account unless its interest rate is higher than your loan.

Might need a new accountant?

 

Any south west Sydney accountant recommendations ??

 

Ahem

 

Where do you put cash buffer when you have no non deductible debt. Don't want to lose access to it. PPOR owned, IP loans are fixed, I am able to add some to these per year, but can't take it back. Do you just look for highest interest savings account.

 

The savings account may be the only option for the moment - or buy another property and borrow under a variable loan.