CornerstoneCU - First Home Savings Account

First Home Savings

Start saving for a down payment with a First Home Savings Account!

Contributions to the account are tax-deductible, like an RRSP, while income and gains are tax-free, like an TFSA.

Meet with an Advisor

Learn more about the features and benefits of a First Home Savings Account:

Compound growth and tax-sheltered savings. By contributing early, your investment will magnify returns over time through compounding. Invest money without being taxed on the income and growth.
Participation period. An FHSA can only be open for 15 years and must be closed by the end of the year when the holder reaches age 71. Additionally, the FHSA must be closed within one year of making a qualifying withdrawal to purchase your first home.
Transfers. An FHSA is transferable to another FHSA, RRSP or RRIF owned by the holder, a spouse/common-law partner named as the successor, or a former spouse/common-law partner.

Eligibility

Is a resident of Canada at the time of purchase
Is between the ages of 18 to 71
Has a valid SIN
Is a first-time home buyer

Contributions

Qualifying individuals can contribute $8,000 per year.
Unused contributions can be carried forward to a limit of $40,000.
The annual limit is not based on the holder’s earned income.

Tax-Free Withdrawals

First-time home buyer
Resident of Canada
Withdrawal made within 30 days of moving
Buy or build a home before October 1 of the following year
Home is in Canada

The Variable FHSA is a cashable tax-sheltered investment with a competitive variable interest rate. This flexible investment allows you to deposit or redeem at any time.

No minimum balance required.
Free deposits.
One free withdrawal per month. $5.00 per withdrawal after.
Tiered interest rate calculated daily and paid monthly.

You want to earn a higher rate of interest and have the freedom to access your funds if you need them.

Term Length	12 Months
Minimum Deposit	$1,000
Additional Deposits (through your Financial Advisor)*	Yes.
Automatic Renewal	Yes.
Redemption	Redeemable in full after 90 days without penalty - No interest paid if redeemed within the first 90 days.
Withdrawals	Withdrawals can be made at any time after 90 days. Minimum withdrawal is $1,000. $1,000 minimum balance must be maintained.
Interest Paid	Annually into Investment or Monthly at a reduced rate. Restrictions apply.

*Conditions may apply. Speak to your Financial Advisor.

Are you wanting to save for your future home? Our Easy Builder FHSA account is a great option!

Term Length	12 Months or 18 Months
Minimum Initial Deposit	$100
Minimum Deposit	$1,000 to be reached at end of 18-month term.
Additional Deposits	Pre-Authorized Credit Only - Conditions apply.
Pre-authorized Deposits	Yes. A minimum of $50 pre-authorized deposit must be set up.
Automatic Renewal	Yes.
Redemption	N/A
Interest Paid	Annually into Investment or Monthly at a reduced rate. Restrictions apply.

Lock-in your funds and earn a higher interest rate.

Term Length	12, 24, 36, 48, 60 months
Minimum Deposit	$1,000
Automatic Renewal	Yes.
Redemption	N/A
Interest Paid	Annually into Investment or Monthly at a reduced rate. Restrictions apply.

The Tax-free First Home Savings Account (FHSA) is an investment arrangement available to Canadian residents aged 18 or older, that allows first-time home buyers a tax advantage option to save for a down payment. Contributions to an FHSA are deductible from income, like an RRSP, while income and gains are tax-free, like a TFSA.

The owner of the plan, known as the holder, makes tax-deductible contributions to the FHSA and must meet the qualifying conditions to participate in the arrangement and have a valid Social Insurance Number (SIN) when the account is opened.

An FHSA is available to individuals who meet all the following requirements:

Is a resident of Canada at the time of account opening;
Is between the ages of 18 to 71;
Has a valid SIN, and
Is a first-time home buyer

An individual is considered a first-time home buyer if they did not, at any prior time in the calendar year, or in the preceding four calendar years, live in a qualifying home (or what would be a qualifying home if it were located in Canada) as their principal residence that:

They owned or jointly owned, or
Their spouse / common-law partner (CLP), at the time the FHSA is opened, owned or jointly owned

As holder and owner of the FHSA, you can have as many accounts as you wish as long as you do not exceed the annual and lifetime limits as provided by the Canada Revenue Agency (CRA).

An FHSA is only available to individuals and not available for purchase by a corporation or trust.

If you are a Canadian resident for tax purposes and possess a SIN or temporary SIN, you can open a FHSA.

Book an appointment with your advisor or call 1.855.875.2255 to learn more!

Yearly contribution limit = $8,000
Lifetime contribution limit = $40,000

When you contribute less than the annual $8,000 FHSA limit, the difference is referred to as an “unused contribution”.

Unused contributions may be carried forward indefinitely and used in future years. Therefore, after 2023, you could contribute more than
the annual limit up to your maximum unused contribution room, in any given year.

Unused contributions are restricted to $8,000 and are subject to the lifetime limit of $40,000.

Begins when you open your first FHSA and ends on December 31^st of the year in which the earliest of the following events occur:

The 15^th anniversary of the date you opened their first FHSA;
You turn 71 years of age; or
The year following your first qualifying withdrawal from their FHSA.

You are not permitted to open a new FHSA after the maximum participation period ends.

You can claim FHSA contributions as a deduction against your taxable income from all sources. This deduction will decrease your taxable income for the year, and thus, your taxes payable. The actual tax savings will depend on your marginal tax rate.

Transfer “in” Eligible Sources:

FHSA
RRSP
Spousal RRSP (Certain conditions apply, Transfers from a spousal RRSP, where the FHSA holder is the RRSP annuitant, are only permitted if the holders spouse/CLP has not contributed to any spousal RRSP's during the current year or the two proceeding years)

Transfer “out” Eligible Sources:

FHSA
RRSP (in FHSA holders name, not spousal)
RRIF

The FHSA account must be closed by certain deadlines.

When you turn age 71, it must be closed by December 31 of that year.
If the FHSA account has not been used to purchase a qualifying home, it must be closed by December 31 of the 15th anniversary of the account's first opening.
If the FHSA account was used to make a qualifying withdrawal, it must be closed by December 31 of the year following the year of that withdrawal.

Unused funds in the FHSA account can either be withdrawn or transferred to an RRSP or RRIF on a tax-free basis before the account closure. However, if funds are withdrawn, you will be taxed.

If funds have been used to purchase a qualifying home, unused funds can be transferred to an RRSP or RRIF on a tax-free basis until December 31 of the year following the year of the qualifying withdrawal.

The FHSA is a helpful tool for Canadians looking to buy their first home. With its contribution limits and tax advantages, it's a convenient way to save for your down payment. You can always stay up-to-date on your FHSA contribution room by checking "My Account" or "My CRA" on the CRA website or by calling the CRA's Tax Information Phone Service at 1.800.267.6999 (TIPS).