To open an FHSA, you must meet all of the following qualifying criteria: You are 18 years of age or older You are a resident of Canada You are a first-time home buyer To be considered a first-time home buyer by the federal government, you must: Have not owned or jointly owned a home in which you lived as your principal residence at any time in the calendar year before opening your FHSA Have not owned or jointly owned a home in which you lived at any time preceding four calendar years And you must meet one of the following conditions: You did not live in a home as your principal residence that your spouse or common-law partner owned or jointly owned at any time in this calendar year or in the previous 4 calendar years OR You do not have a spouse or common-law partner at the time you open the account

The best first home saving accounts in Canada for 2024

Q: How much can I contribute to my FHSA in 2024?

The contribution limit for 2024 remains $8,000. Any amount that is not contributed in a given year can be carried over to the next year. For example, if you contribute $6,000 in 2023, you will have $10,000 ($2,000 remaining from 2023 + $8,000 from 2024) worth of contribution room for 2024.

Q: What happens to the FHSA if you don't purchase a home?

Should you decide not to purchase a home in the 15 years since you opened your FHSA, you can transfer the funds to an RRSP or RRIF without paying any taxes. Your FHSA can remain open for 15 years (or until you turn 71, whichever is first.)

First home savings accounts (FHSAs) were created to help Canadians save more for their first home. Compare the best first home saving accounts to find the one that’s right for you.

The best FHSAs in Canada

Since the launch of First Home Savings Accounts in April of 2023, most banks and financial institutions have released their products. Here is a list of the best FHSAs currently available and noteworthy features you'll find in each FHSA.

Frequently asked questions

Who can open a FHSA?

To open an FHSA, you must meet all of the following qualifying criteria:

You are 18 years of age or older
You are a resident of Canada
You are a first-time home buyer

To be considered a first-time home buyer by the federal government, you must:

Have not owned or jointly owned a home in which you lived as your principal residence at any time in the calendar year before opening your FHSA
Have not owned or jointly owned a home in which you lived at any time preceding four calendar years

And you must meet one of the following conditions:

You did not live in a home as your principal residence that your spouse or common-law partner owned or jointly owned at any time in this calendar year or in the previous 4 calendar years

You do not have a spouse or common-law partner at the time you open the account

Does an FHSA have an expiry date?

How much can I contribute to my FHSA in 2024?

What happens to the FHSA if you don't purchase a home?

What are some tips for savings for a down payment using an FHSA?

Use our mortgage downpayment calculator to estimate how much you will need to save to put a downpayment on your dream home. Start saving early, and automate your contributions from your chequing account (or whichever account you use to deposit your payroll) into your FHSA. Certain investments like stocks and ETFs can help you grow your money with the fluctuations in the stock market over time. If you have a shorter investment horizon and need access to the funds sooner, however, consider using an FHSA as a savings account and/or investing in a short-term GIC like a 1 year GIC or even 90 day GIC with a higher rate of return than a normal savings account. Always consult with a financial professional before signing on the dotted line. As for which account may benefit your savings goals the most, we’ve got you covered.

Can I transfer money from my RRSP to my FHSA?

Yes, you can transfer money from your RRSP to your FHSA if you need to use the funds from your RRSP to save for a downpayment. However, this will reduce your FHSA contribution room, and you will not recover your RRSP contribution room. Also, unlike new contributions to your FHSA, direct transfers from your RRSP to your FHSA are not tax deductible. You can indirectly transfer funds from your RRSP to your FHSA by withdrawing from your RRSP and depositing into your FHSA, but remember that RRSP withdrawals are considered taxable income.

To transfer funds directly from your RRSP to your FHSA, fill out Form RC720 and submit it to your bank or financial institution.

What is the First Home Savings Account (FHSA)?

The First Home Savings Account (FHSA) is a tax shelter proposed by the federal government in the 2022 budget to help Canadians save money to buy a first home.

This tax-free home savings account will combine the features of two savings plans you might already be using: the Tax-Free Savings Account (TFSA) and the Registered Retirement Savings Plan (RRSP). Just like your RRSP, contributions to your FHSA will be tax-deductible. This means that any amount you put in your account will be deducted from your taxable income, saving you money on your income tax.

As with your TFSA, any money your FHSA earns will be tax-free. You won’t have to report your investment earnings or pay income tax on them.

Check out the helpful video below on how to use the FHSA, then read on for more details.

How does the FHSA work?

1. Who can open a FHSA?

The First Home Savings Account (FHSA) is a new tool for all Canadians to save to buy a first home, open to anyone 18 or older.

2. What are the contribution and withdrawal considerations?

Eligible Canadians are able to set up a First Home Savings Account at any financial institution that offers TFSAs and RRSPs. FHSA contributions will be limited to $8,000 per year with a lifetime maximum of $40,000. Similar to RRSPs, the contributions are tax-deductible. If in any given year, you don’t hit your annual FHSA contribution limit, the leftover amount carries over to the next year. For example, if you contribute $5,000 in 2023, you will have $11,000 ($3,000 remaining from 2023 + $8,000 from 2024) worth of contribution room for 2024. Another thing to keep in mind is that you can only carry over a maximum of $8,000 in unused contribution room from one year to the next. So if you do not contribute to your FHSA at all for three years after opening it, you won’t have $24,000 of FHSA room, but only $16,000.

Canadians will have 15 years to buy a home from the time you open an FHSA. If you have not done so within the 15 years, the funds can be transferred to an RRSP without paying any taxes. Given that the intent of this account is to help home buyers, withdrawals put towards a home purchase will not be taxed.

In order to make a qualifying withdrawal, you must:

Be a first-time home buyer (slightly different than the rules for opening an FHSA, you cannot have lived in a home that you owned or jointly owned within the calendar year or previous 4 years except within the 30 days immediately before the withdrawal)
Have a written agreement to buy or build a qualifying home with the acquisition or construction completion date of the qualifying home before October 1 of the year following the date of the withdrawal
Occupy or intend to occupy the home as your principal place of residence within one year after buying or building it
Not have acquired the home more than 30 days before making the withdrawal

Should your withdrawal not meet these conditions, it will be considered non-qualifying and the full amount of the withdrawal be added to your taxable income for the year. Finally, withdrawals do not have to be paid back to your account, unlike with the RRSP home buyer plan.

3. How can the FHSA be used?

As with other registered accounts, there are certain limitations on the types of investments that can be held in FHSAs.

The following investments can be held within an FHSA:

Mutual funds
GICs (Guaranteed investment certificates)
Publicly traded securities (stocks, exchange traded funds - ETFs, etc.)
Government bonds

Similarly to TFSAs, you won’t have to pay taxes on any of the gains these investments generate.

What to look for in FHSAs?

Before opening an FHSA, be sure to consider the following factors:

Interest rates: Providers may provide competitive interest rates on funds held within your FHSA, similar to tax-free savings accounts. A FHSA that pays interest may be a good fit for Canadians who are seeking a risk free investment and want to earn tax-free interest on their cash.
Fees: Should you prefer to invest the money held within your FHSA, it is always important to consider investment fees like trading fees, management fees or monthly as they can add up quickly. Investing these funds can be done through a brokerage, online brokerage, or a robo-advisor.

Also read:

Compare the best savings accounts - by type

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