First Home Steps Account (Issue 3)

Our First Home Steps account is a regular saver account for First Time Buyers. If you are starting to save to buy your first home, our First Home Steps account may be right for you.

  • Open in branch or at an agency
  • Pay in up to £1,500 per month, in one or more payments
  • You don't have to pay money in every month
  • For balances eligible for the higher tier rate of interest, the higher rate applies to the whole balance
  • Once you have saved £25,000 you can't put any more money in
  • Interest is calculated on the money in the account each day and paid each year on 1 January
  • You can take money out three times every calendar year
  • You can close the account, but closure counts as a withdrawal
  • We can stop accepting applications at any time.  This account is only available to First Time Buyers.
  Balance Gross* each year AER†
Variable - Tier 1 £1 - £2,500 1.50% 1.50%
Variable - Tier 2 £2,501 - £7,500 1.70% 1.70%
Variable - Tier 3 £7,501 - £25,000 2.20% 2.20%

Please read the summary box below 

Summary Box
  Summary Box
What is the interest rate?
Gross* each year/ AER† (Variable)
£1 - £2,500
£2,501 - £7,500
£7,501 - £25,000

(See the meanings of ‘Gross’ and ‘AER’ at the bottom of this page)
Interest is calculated each day on the money in the account and paid on 1st January every year. For balances eligible for the higher rates of interest, the higher rate will apply to the total amount of money in the account when that day’s interest is accrued.
Can Principality change the interest rate?
  • Yes, variable interest rates can go up or down.
  • If you have £100 or more in the account, we will give notice of any reduction in interest rates at least 14 days before the change takes effect.
  • For more information, see the section Changes to interest rates in our Savings Terms and Conditions.
What would the estimated balance be after 12 months based on a £4,850 or £18,000 deposit? This is based on no money being taken out of the account and no change to the interest rates:

£4,898.47 This is based on you paying in £350 a month for 11 months and a first payment of £1,000 on the date the account was opened.

£18,205.75 This is based on you paying in £1,500 a month for 12 months, making the first payment on the date the account was opened.
How do I open and manage my account?
  • You can only open this account if you do not own or have not previously owned a property.
  • You must be 18 or over and a UK resident (see your First Home Steps Account account terms).
  • This can be a joint account, but you can’t have more than one of this issue number of the First Home Steps Account in your name.
  • You can open the account in branch or at an agency.
  • You must keep at least £1 (the minimum balance) in the account.
  • The most you can pay in each month is £1,500, in one or more payments.
  • You do not have to make payments into the account every month.
  • If the account reaches £25,000, you cannot pay any more money in.
  • You can manage the account in branch, at an agency, by post, or by using the online service, Your Account, at
Can I withdraw money?
  • Yes, you can make three withdrawals from the account every calendar year.
  • Closing the account counts as a withdrawal.
  • We won’t inform you if you make a withdrawal that reduces the money in the account and a lower tier interest rate then applies.
  • On the fifth anniversary of opening the account, we will move your money to our Instant Access Account or the nearest equivalent we offer at the time.
Additional information
  • If you complete on a Principality Building Society residential mortgage on your first home in England or Wales and your First Home Steps Account has been open between 1 and 5 years, with at least the minimum balance, you may be eligible for a Celebratory Bonus of £500 (see your First Home Steps Account account terms). The Celebratory Bonus will be paid into your First Home Steps Account on completion of the mortgage.
  • Service charges and costs may apply to the account. These are set out in our Tariff of Charges.
  • In certain circumstances we may refuse an instruction for using an account. These circumstances are set out in our Savings Terms and Conditions.
  • If the total amount of interest you earn is more than your tax-free Personal Savings Allowance, you may have to pay tax directly to HM Revenue & Customs (HMRC). For more information, visit and search Personal Savings Allowance.
  • The interest rates quoted above were correct on 01/08/2022.

Before you apply, please read the First Home Steps Issue 3 Account Terms & Conditions

As you will be bound by the Account Terms and your information is held in accordance with our privacy policy, you should read, print and save the below documents for your records. If you have any queries relating to them please contact us for further information.

Please also read the following:

We are covered by the FSCS

Find out more about what it means for you.


^ Tax-free means UK Income Tax and Capital Gains Tax is not deducted from the interest you earn. This depends on your individual circumstances, and may change in future.

* Gross interest is the rate of interest before income tax is deducted at the rate set by law.

† AER stands for Annual Equivalent Rate and illustrates what the interest rate would be if interest were paid once each year on the whole balance, including previous interest payments.

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First Home Steps Account Issue 3