Saving for a first home is tough. You’ve cut back, skipped dinners out with friends, and put up with being labeled stingy by your mates.

But with a median apartment in Sydney now fetching over $600,000, you’ll probably need to come up with $120,000 for a 20 percent deposit, not to mention the myriad costs associated with buying property. That’s a big ask, even for the best savers amongst us.

Flat wages and the ballooning costs of essentials such as rent and electricity have only made this task more difficult.

So, what can you do? While there’s no substitute for sticking to a well-crafted savings plan, there are several ways you can put your money to work by investing it as you continue to save.

Rates are at an all-time low, great for homebuyers who already have their home deposit saved up. The downside of low rates is for the savers who (at best) only get a sad 1 percent to 2 percent a year on their interest savings accounts and term deposits. So, while the low rates make paying off a home loan easier, savers don’t get the same benefits.

This really depends on where you want to live and if you’re buying an apartment or a house.

Most lenders require a 20 percent deposit to secure a home loan and avoid the lenders mortgage insurance fee. So, on a $600,000 loan, you’d need about $120,000. It’s no small feat accumulating this amount of money.

The good news is you don’t have to lump all your money into a savings account. A lot of people are turning to invest to accelerate the time it takes to save up for a deposit.

First – if your plan is to buy a home in one or two years then a capital stable investment should be considered.

However, if your timeframe for buying a home is longer, say over three years or more, then 90 percent of the time you are likely to do better by investing in a diversified fund.

A recent analysis shows that in the last 5 years, people who invested in the Australian share market over the same period made total returns of 9 percent.

However, the average cash return (i.e. the interest rates your bank gives you) for people who left their money in a savings account has only been 2 percent.

If you invest $10,000 and make regular monthly $1,000 contributions over five years at a growth rate of 7 percent, your final balance could be $86,187.

Compare this with an interest rate of 2 percent (slightly more than what you’d get from most banks) and your final balance is $74,098.

If you want to invest your savings to accelerate your journey towards a home deposit, you need to be prepared to do it for three or more years. Less than this and the risk of losing money is too high. It’s also not long enough to see the effects of the compound returns.

Saving for a house deposit can feel like a long slog but your efforts will be worth it.

There is no guaranteed way of immediately growing your savings, but smart investing could help you reach your house deposit milestone faster. Remember the tortoise wins the race.

At Hejaz, we can offer you a range of investment products ranging from capital stable investments to diversified investment options.

Please keep in mind that investments are not suitable for everyone and their circumstances, we highly recommend you to schedule a call with our wealth advisers to see if investing is suitable for you.