Here’s what advisors recommend for the tax-free accounts designed to help future homeowners
The type of investment for an FHSA depends on a person's timeline for buying a home – and whether they plan to buy a home at all.Ryan Ferguson took to social media to deliver a message in late 2023: Canadians who are eligible to open a tax-free first home savings account before the end of the year should do so.
Mr. Ferguson calls the figures disappointing. “My opinion around the FHSA is anyone who is not a homeowner in Canada should be opening one – whether they intend to buy a home or not,” he says.Most advisors agree that a client’s timeline for purchasing a home is the biggest factor when determining what to hold in an FHSA.
Mr. Ferguson prefers clients with short timelines use high-interest savings accounts , in which he says clients can still get liquidity and yields above 4 per cent. However, as interest rates come down, so will returns on HISAs, money market funds and guaranteed investment certificates . “The biggest missed opportunity for people is a portfolio that’s not aligned with their time horizon,” he says.
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