Northern Birch Credit Union is here to support you on your journey towards financial well-being. The information in this article is provided as an educational overview. Each member’s financial journey is unique. We encourage you to talk to us – we can help you reach your financial goals.
You may have heard news of a new program for first-time home buyers. To help Canadians purchase their first home, the federal government launched the First Home Savings Account (FHSA). Designed to help Canadians unlock the dream of owning their own home, FHSAs allow first-time homebuyers to save for their first home, tax-free.
As a special bonus to first-time home buyers, Northern Birch is offering 6.00% interest on FHSA variable savings account deposits until June 30, 2024*. It’s a great opportunity to jump-start your savings!
We encourage you to look into the advantages of a Northern Birch FHSA.
What is a First Home Savings Account (FHSA)?
An FHSA is a savings program initiated by the federal government to help you save for your first home.
You can contribute up to $8,000 every year from the time the plan is opened, up to a lifetime maximum of $40,000. If you opened your FHSA in the prior year and did not contribute the full $8,000 in that year, the unused annual contribution amount can be carried forward for one year (up to a maximum of $16,000 for a calendar year). You can also make a direct transfer into your FHSA from your RRSP, which would count towards your annual maximum contribution.
You can work with your Member Service Representative at Northern Birch and set up a monthly contribution in smaller amounts that work with your budget.
Your contributions are tax-deductible for that calendar year or a future year and income earned within an FHSA is not taxed. Your FHSA must be closed by December 31st of the year in which any of the following events occur:
- it has been 15 years since you opened the plan
- you turn 71 years of age
- the year after your earliest qualifying withdrawal.
Saving together with your partner doubles the impact when you both open individual FHSAs. You can work with your Member Service Representative at Northern Birch and set up a monthly contribution in smaller amounts that work with your budget. You’ll be surprised how quickly your savings can grow. (Try out the Northern Birch investment calculator at here)
Who is eligible for an FHSA?
An FHSA is uniquely designed for Canadians interested in home ownership. To qualify to open an FHSA at Northern Birch you:
- must be a resident of Ontario (in order to open an FHSA plan at NBCU) and be at least 18 years old
- you or your spouse or common-law partner have not owned a qualifying home that you lived in as your principal residence at any part of the calendar year before the account is opened or the preceding four calendar years.
Can I put investments into my FHSA?
Yes, you can. An FHSA can hold:
- Mutual funds*
- Publicly traded securities
- Government and corporate bonds
- Guaranteed investment certificates (GICs)
What if I do not buy a home?
If you decide not to purchase a home, you can transfer the funds in your FHSA directly to an RRSP or an RRIF without being penalized or affecting your contribution limits for your RRSP. We encourage you to speak to your Investment Specialist for more information.
Our Member Service team and our Investment Specialists can help you establish a plan that works for you, helping you to achieve your financial goals.
Can I use my FHSA with other programs and accounts?
Yes, through the Home Buyers Plan (HBP) Canadians are eligible to borrow up to $35,000 from their RRSPs to help buy a first home as long as the funds have been in their RRSP for a minimum of 90 days. The FHSA is a very flexible program, giving first-time home buyers many different options to unlock the dream of home ownership.
In summary, each member at Northern Birch is unique. Our Member Service team and our Investment Specialists can help you establish a plan that works for you, helping you to achieve your financial goals.
If you are not a member of Northern Birch Credit Union at this time, consider becoming a member. There are many advantages, including low service fees, competitive rates on mortgages and loans and healthy interest rates on savings, to name a few. With no-fee savings and chequing accounts, Northern Birch offers an excellent opportunity to help you manage your household accounts and grow your financial well-being.
For a detailed overview of our new FHSA, go to northernbirchcu.com/personal/investing/fhsa or call to speak to an Investment Specialist.
*The introductory interest rate is available during the Introductory Period from March 1, 2024 to June 30, 2024. Interest is calculated daily, paid monthly on deposits into a Northern Birch Credit Union FHSA variable savings account. Rates and offer are subject to change without notice. Visit our website for more information.
Northern Birch Credit Union partners with Aviso Wealth Inc., a leader in wealth management and award-winning trading platform, Qtrade Direct Investing.
