The First Home Savings Account launched April 1, 2023. Three years in, many early adopters opened one — and then basically forgot about it. Here's what to check.
Opening an FHSA in 2023 was a smart move. But "opened an account" and "used it well" are two different things. If you're like a lot of Canadians, you may have set it up, contributed something (or nothing), and haven't thought about it since.
That's fine — but three years in is a natural point to take stock. This checklist covers the most common missed opportunities, in order of importance.
Work through each item. Most people will find 1–2 things worth acting on. None of these are emergencies — but they add up.
The FHSA gives you $8,000 of contribution room per year starting the year you open the account — but you can only carry forward one year's worth of unused room, not multiple years.
Here's what that means in practice for someone who opened in 2023 and contributed nothing:
| Year | New Room | Carry-Forward Available | Max You Can Contribute |
|---|---|---|---|
| 2023 | $8,000 | — | $8,000 |
| 2024 | $8,000 | $8,000 from 2023 | $16,000 |
| 2025 | $8,000 | $8,000 (only 1 year carries) | $16,000 |
| 2026 | $8,000 | $8,000 (only 1 year carries) | $16,000 |
If you opened in 2023 and contributed nothing through 2025, you don't have $24,000 of usable room right now — you have $16,000 (this year's $8K plus one year of carry-forward). The remaining $8K of unused 2023 room effectively expired when 2025 rolled around without you using it.
Common misconception: Many people assume FHSA room stacks like TFSA room. It doesn't. Only one year of unused room carries forward at a time. If you've missed multiple years, you cannot catch them all up.
This is the most common FHSA problem. You open an account, transfer money in, and it sits in a default savings account or HISA earning 3–4%. Meanwhile the account is technically "funded" so you feel good about it.
If your target home purchase is more than 3 years away, leaving your FHSA in cash is almost certainly a mistake. At 4%, $16,000 grows to roughly $17,300 over 3 years. In a diversified equity ETF averaging 7% annually, it grows to ~$19,600. The gap widens significantly over 5–7 years.
Even if you plan to buy in 3–5 years, a balanced allocation (60% equities, 40% bonds/GICs) is reasonable. Only if you're buying within the next 1–2 years does staying mostly in cash or GICs make clear sense — you don't want sequence risk right before you need the money.
If you opened your FHSA at RBC, TD, Scotia, BMO, or CIBC, your account likely defaulted to the bank's own mutual funds. Many of these carry Management Expense Ratios of 1.5–2.5% annually.
On $16,000, a 2% MER costs you $320/year in fees — every year, compounded. Over 10 years, the difference between a 2% MER fund and a 0.20% ETF on a $40,000 FHSA is roughly $3,500–$5,000 in lost growth. That's real money coming out of your down payment.
The banks aren't doing anything illegal — these products are just expensive for what they are. Index ETFs at providers like Wealthsimple, Questrade, or CI Direct Investing offer equivalent or better exposure at a fraction of the cost.
Unlike RRSP deductions, FHSA deductions don't have to be taken in the same year as the contribution. You can contribute in 2024 and claim the deduction on your 2025 or 2026 return — if a higher-income year is coming, it can make sense to wait.
That said, if you contributed in 2023 or 2024 and simply forgot to claim it, you may be leaving money on the table. Check your filed T1 returns (available in CRA My Account under "Tax returns") and confirm the FHSA deduction appears on line 20805.
If you missed it, you can file a T1 adjustment (T1-ADJ form) or request a change through CRA My Account. There's no penalty for doing this late.
Many people opened their FHSA wherever was most convenient — their existing bank. That's understandable, but it's worth a 5-minute comparison now that you're 2–3 years in.
The main variables:
Switching providers is possible — it's called a direct transfer (similar to an RRSP transfer). The sending institution may charge a transfer-out fee ($50–$150 is typical). If your balance is large enough, the receiving institution sometimes covers it.
The FHSA doesn't last forever. By law, your account must close by the earliest of:
If you opened in 2023, your FHSA must close by December 31, 2038. That's still 12 years away — no rush. But if you're in your late 50s and opened one, the age-71 cutoff may come before the 15-year limit.
When the account closes, you have three options for the funds: (1) withdraw and purchase a qualifying first home, (2) transfer to your RRSP or RRIF with no tax impact, or (3) take a taxable withdrawal. The RRSP transfer option is the key reason contributing to an FHSA even when you're uncertain about buying is still worth considering — you're essentially banking extra RRSP-equivalent room.
No penalty for not buying: You don't have to buy a home. If you never do, your FHSA becomes a tax-sheltered account that rolls into your RRSP — preserving your regular RRSP room in the process. That's meaningful.
This one gets overlooked. The FHSA allows you to name a spouse or common-law partner as a successor holder. If you die, the account passes to them tax-free and they can continue holding it as their own FHSA — they don't have to collapse it immediately.
If you haven't named a successor holder and you die, the account is treated as a taxable payment to your estate. For most people in their 20s–30s this isn't urgent, but it takes 5 minutes and it's the kind of thing you want set up before you need it.
You can also name a non-spouse as a beneficiary (a child, sibling, etc.), but in that case the full value is included in their income for the year — less favourable than the successor holder route for couples.
If you're reading this as someone who opened an FHSA in 2023 or 2024 and is doing a check-in, the most common situation looks like this:
That's genuinely fine as a starting point. The FHSA is still doing its job — your contributions are tax-deductible and sheltered. The question is whether you can do better with minimal effort, and usually the answer is yes.
The two highest-leverage changes for most people are: (1) move out of cash/HISA into an ETF if your timeline allows it, and (2) make sure you're actually claiming the deduction on your return. Everything else is optimization.
FHSA lifetime maximum: $40,000 in total contributions across all years, regardless of carry-forward. Even if you maximize contributions every year starting in 2023, you hit the lifetime cap in 2027. After that, the account stays open and continues growing tax-free — you just can't contribute more.
Dig deeper on specific FHSA questions:
The investment inside your FHSA matters as much as the account itself. See our picks for the best ETFs for a 3–7 year Canadian first-time buyer timeline.
Best FHSA Investments Top Canadian ETFsThis content is for informational purposes only and does not constitute financial, tax, or legal advice. FHSA rules are set by the Canada Revenue Agency — verify current limits and rules at canada.ca. Contribution room, carry-forward rules, and account deadlines are accurate as of April 2026 and may change in future federal budgets.