The First Home Savings Account (FHSA) is a tax-free account that allows you to contribute up to $40,000 towards the purchase of your first home.
Since the account was launched in 2023, many financial institutions like Questrade, Wealthsimple, TD, and RBC have been working on offering it to their clients.
Wealthsimple FHSA Account
Canadians can now open a Wealthsimple FHSA account. The platform supports both managed (i.e. robo-advisor) and self-directed (i.e. brokerage) FHSAs.
If you are interested in getting an account, visit their website.
Wealthsimple FHSA Requirements
To open an FHSA, you must:
- Be a resident of Canada.
- Be at least 18 years old, and no older than 71 years.
- Be a first-time home buyer.
The CRA defines first-time home buyers as someone who has not owned a home in which they lived in the calendar year they open an FHSA, and in the preceding four calendar years.
Wealthsimple FHSA Investments
You can hold these investment assets in your Wealthsimple FHSA:
- Stocks
- Exchange-Traded Funds (ETFs)
- Bonds
- Cash (savings)
Wealthsimple Invest
On Wealthsimple’s Website
- Fees: Managed investing service with fees of 0.5%
- Account minimum: Start with the Basic Package with $1.00
- Promotions: $25 when you open an account & deposit $500+
Wealthsimple FHSA vs. TFSA vs. RRSP
Here’s how the FHSA, TFSA, and RRSP compare:
| FHSA | RRSP | TFSA | |
| Contribution limit | $8,000 per year and $40,000 lifetime | 18% earned income in the previous year up to a limit ($31,560 in 2024) | $7,000 in 2024 ($95,000 total since inception in 2009) |
| Over-contribution penalty | 1% monthly penalty on excess contributions | 1% monthly penalty on excess contributions over $2,000 lifetime buffer | 1% monthly on excess contributions |
| Withdrawals | Tax-free for home purchase | Pay taxes on withdrawals | Tax-free |
| Account expiration | After 15 years | Convert at age 71 | Does not expire |
| Tax-free gains | Yes | Tax-deferred | Yes |
| Contributions tax deductible | Yes | Yes | No |
| Investments | Savings deposits, stocks, ETFs, mutual funds, options, bonds, GICs | Savings deposits, stocks, ETFs, mutual funds, options, bonds, GICs | Savings deposits, stocks, ETFs, mutual funds, options, bonds, GICs |
FHSA vs. Home Buyer’s Plan
The Home Buyer’s Plan (HBP) is a program under the Registered Retirement Savings Plan that allows you to borrow up to $35,000 from your RRSP to buy a home.
A couple can withdraw up to $70,000 (i.e. $35,000 x 2).
The HBP must be repaid to your RRSP within 15 years, whereas you don’t need to repay the FHSA after withdrawing it for a home purchase.
You can use both the HBP and FHSA when buying your first home in Canada.
Other FHSA Investment Accounts
EQ Bank FHSA Savings Account
Top FHSA savings account
Earn 3% tax-free high interest on savings for your home
Contribute up to $8,000 annually and $40,000 lifetime
No monthly account fees
Also offers FHSA GICs (up to 5.35%)
FAQs
Wealthsimple clients can now open managed or self-directed FHSA accounts.
You won’t be able to open an FHSA if you have a 10% ownership or higher in your current home.
It only allows you to contribute a maximum of $40,000, which won’t cover the minimum downpayment on many Canadian homes.
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