Best approach - First time home buyer's plan

Hi everyone,

I currently have most of my savings in a traditional savings account with ING. I would like to buy a home within the year, and would like to take advantage of the HBP. I'm thinking about maxing out RRSP contribution limit (about $17K) in a RRSP savings account that pays interest at 1.35%, and withdraw the money when it's time to buy a home. I know that you have to hold the money for at least 3 months, so I figure this would be a good time to get one started. I read a few posts about the topic recently, but have a few questions:

1) Would I be able to claim the RRSP contributions for the 2013 deduction year, if I withdraw the money before the end of the year? If so, how long will I be able to defer taxes with the contribution? Will I need to include the amount I take out as income at some point?
2) Are there other RRSP investing alternatives that yields a higher return than 1.35%, but also equally as safe? (i.e. I don't want to invest in mutual funds/stocks with this money)
3) Is there another strategy that would help me take advantage of the HBP?

Thanks!