FHSA Investment Strategy: What to Hold by Your Buying Date
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The First Home Savings Account is the only registered account in Canada that gives you a deduction on the way in and tax-free growth on the way out. That much is settled, and it is why the FHSA should usually be the first account a would-be first-time buyer fills.
What is not settled is what to put inside it. An FHSA is not a retirement account. It has a date attached to it, and that date is the single fact that should drive every holding decision you make. A 30% drawdown in an RRSP with 25 years to run is an inconvenience. The same drawdown in an FHSA that gets emptied next spring is a postponed purchase, a lost deposit, and a year of saving undone.
So this page does not rank “the best stocks.” It ranks ten holdings by how well each one fits an account with a deadline, from the money you will spend in eighteen months to the money you will not touch for a decade. Every company figure comes from that company’s own filing, every rule from the Canada Revenue Agency, and the central claim of the page is measured rather than asserted.
What the Numbers Actually Say
- The average FHSA holder is nowhere near the $40,000 limit. The CRA’s most recent published figures cover 739,000 individuals who had opened accounts, holding $2.79 billion, an average balance of $3,899. That data is dated December 31, 2023, and it is the latest the agency has released. At that size, your choice of account and fee structure matters more than your choice of security.
- Your target has been getting cheaper, not more expensive. Canada’s New Housing Price Index fell 3.4% between April 2023, when the FHSA launched, and July 2026. Over the same stretch a plain high-interest savings ETF returned 12.3%. Every FHSA saver who held nothing riskier than cash gained ground on a new build.
- Equities did far better, and that is not the same as being right for this account. An all-equity portfolio returned 88.6% over those same 40 months. It also sat through a 19% peak-to-trough decline within the last five years. Whether that trade is available to you depends entirely on your closing date.
- The account is capped, so the stakes are bounded. Participation room is $8,000 in the year you open your first FHSA, with carry-forward starting only after the account is open, a maximum of $16,000 of room in any single year, and a $40,000 lifetime limit.
- An FHSA held in deposits gets its own deposit insurance category. CDIC insures eligible deposits held in an FHSA separately from your TFSA, RRSP, RESP and personal accounts, up to $100,000 in that category.
How To Buy Investments in an FHSA in Canada
Before any of the holdings below are available to you, the account has to be the right kind. This is where most people lose a year.
The four legal forms, and why only one of them matters here
The FHSA is a federal program with one CRA rulebook, but issuers sell it in different legal wrappers, and the wrapper decides what you are allowed to own:
- Depositary FHSA. Offered by banks and credit unions. Holds cash, term deposits and GICs. Nothing else. Fine if your timeline is short and the cash tier is all you want.
- Trusteed FHSA. A trust arrangement that can hold the full range of qualified investments.
- Insured FHSA. An annuity contract with a licensed provider. Uncommon, and used mostly inside insurance-based planning.
- Self-directed FHSA. A brokerage account where you choose the holdings yourself. This is the form every ranked holding on this page requires.
If you opened an FHSA at your bank branch and it is sitting in a savings deposit paying a fraction of the policy rate, you have a depositary account. You can transfer it. A direct transfer between FHSA issuers does not use participation room, which is the detail that stops most people from moving.
What the CRA lets you hold
An FHSA is required to limit itself to qualified investments, and the list is the same one that governs RRSPs and TFSAs. The CRA names the common types directly: cash, mutual funds, most securities listed on a designated stock exchange, GICs, Canada and provincial savings bonds, and certain shares of small business corporations. Full detail lives in the CRA’s page on investments in your FHSAs and in Income Tax Folio S3-F10-C1.
One caveat the CRA states plainly and most guides skip: your issuer may apply internal policies that narrow the list further. The CRA’s rules are the ceiling, not the floor.
The four steps
- Open a self-directed FHSA with a brokerage. Opening the account is what starts your participation room clock, so there is a real cost to waiting: room only begins to carry forward once an account exists.
- Fund it up to your participation room. Your exact number is in CRA My Account and on your notice of assessment. Contributions and RRSP-to-FHSA transfers share one limit.
- Buy the tier that matches your buying date, using the ranking below.
- Claim the deduction, or bank it. You are allowed to carry the deduction forward and use it in a higher-income year, which is usually worth doing if you are early in your career.
We use Questrade for FHSA investing because the account type is supported in a self-directed form and ETF purchases are cheap enough that dollar-cost averaging $8,000 a year does not get eaten by trading costs. You can open an FHSA at Questrade here. Our Questrade review covers the fee schedule in detail, and Questrade against Wealthsimple is the comparison most first-time buyers are actually running. If you want a simpler, more guided experience, Wealthsimple is the gentler starting point, and our Wealthsimple review sets out the trade-off. If you have never opened a brokerage account before, start with our walkthrough on how to open a brokerage account in Canada.
A word on scope. This page is about what to hold. If you need the rules themselves, in depth, our FHSA guide covers eligibility, the withdrawal conditions, Form RC725 and the closure deadlines properly.
Can You Buy Stocks in an FHSA?
Yes. Individual stocks listed on a designated stock exchange are qualified investments in an FHSA, exactly as they are in a TFSA or an RRSP. There is no special restriction on equities, no limit on the proportion you hold, and no separate reporting to do.
Whether you should is the harder question, and it depends on one variable: the number of months between today and the day the money leaves the account.
Two things are worth knowing before you buy anything.
Foreign dividends are taxed inside an FHSA. The CRA states that dividend income from a foreign country paid into an FHSA may be subject to foreign withholding tax. The FHSA does not carry the treaty protection that shields an RRSP from US withholding on US dividends. That is not a reason to avoid global diversification, and the drag on a broad equity fund is small. It is a reason not to build an FHSA around high-yield US dividend payers, and a reason to prefer Canadian-listed, Canadian-domiciled funds where the choice is otherwise a coin flip. If the phrase “designated stock exchange” or “withholding tax” is new to you, our primer on what a stock is and what you actually own is the place to start, and how to read a stock quote covers the numbers you will meet on the order screen.
Single-stock risk does not care about your closing date. A diversified fund can fall 20% and recover inside a couple of years. An individual company can fall 80% and not recover at all. Both outcomes appear in the ranking below, with the numbers attached.
The Number That Should Set Your FHSA Strategy
Almost every FHSA article assumes the same thing: that house prices run away from savers, so savers have to take equity risk to keep up. It is a comfortable argument. It is also, over the life of the FHSA so far, wrong.
Since the FHSA opened on April 1, 2023, Statistics Canada’s New Housing Price Index for Canada has fallen 3.4%. It is down 2.3% over the last twelve months and down 3.5% over three years. Against that, the three portfolios an FHSA saver realistically chooses between all gained:
| Holding since April 2023 | Total return | Deepest 5-year drawdown |
|---|---|---|
| New house prices (StatCan NHPI) | -3.4% | n/a |
| CASH.TO high-interest savings ETF | +12.3% | -0.8% |
| VBAL.TO balanced 60/40 | +53.4% | -16.4% |
| XEQT.TO all-equity | +88.6% | -19.1% |
Three conclusions follow, and the second one is the one that gets left out.
You did not need equity risk to beat your target. Cash beat new-build prices by roughly sixteen percentage points over 40 months. The high-interest savings ETF did that with a worst drawdown of 0.8%. For a saver with a firm closing date, that is the whole job done.
Equities still won by a wide margin, and pretending otherwise would be dishonest. All-equity returned seven times what cash did. A saver eight years from buying who sat in a savings ETF gave up a great deal. The argument for the cash tier is an argument about deadlines, not an argument that equities are a bad idea.
The cost of being wrong is asymmetric. If you hold cash and equities rally, you buy the same house slightly later or slightly smaller. If you hold equities and they fall 19% the quarter before closing, you may not buy at all. Those two outcomes are not symmetrical, and the ranking below is built around that asymmetry. Our explainer on corrections against bear markets is worth ten minutes if you have never sat through one with a deadline in front of you.
What this index does and does not measure. The NHPI tracks contractors’ selling prices for new residential houses, house and land, across Canada. It is not the resale market, which is where most first homes are actually bought, and it is a national figure that will differ from your city. Treat it as the cleanest publicly available read on the direction of the thing you are saving for, not as a quote on a specific property.
How These Ten Holdings Are Ranked
The criterion is fit for an account with a deadline, not investment quality. This matters, so it is worth stating flatly: a holding near the top of this list is not “better” than one near the bottom. It is more broadly usable inside an FHSA, because more FHSA savers are close to buying than far from it. Shopify sits tenth here and first on our best TFSA stocks page. The company did not change between those two pages. The wrapper did.
Read the list as a menu sorted by how many years of runway it needs, and take the entries whose runway matches yours.
| # | Holding | Runway it needs | What it is for | Price (Sep 11, 2026) | 1-year total return | Deepest 5-year drawdown |
|---|---|---|---|---|---|---|
| 1 | Global X High Interest Savings ETF (CASH.TO) | 0 to 2 years | Cash that stays cash | $50.04 | +2.11% | -0.80% |
| 2 | Global X 0-3 Month T-Bill ETF (CBIL.TO) | 0 to 2 years | Government-backed cash | $50.05 | +2.25% | -0.06% |
| 3 | A GIC ladder | 0 to 3 years | A locked rate, deposit-insured | rate varies by issuer | n/a | none if held to maturity |
| 4 | Purpose Cash Management Fund (PSA.TO) | 0 to 2 years | Second-issuer cash | $50.06 | +2.26% | -0.04% |
| 5 | Vanguard Conservative ETF Portfolio (VCNS.TO) | 2 to 4 years | 40% equity, bond-anchored | $32.55 | +7.13% | -15.73% |
| 6 | Vanguard Balanced ETF Portfolio (VBAL.TO) | 3 to 5 years | 60/40, one ticker | $39.42 | +11.77% | -16.41% |
| 7 | Fortis (FTS.TO) | 3 to 5 years | Regulated utility, rising dividend | $75.36 | +14.77% | -24.01% |
| 8 | Dollarama (DOL.TO) | 5 years or more | Defensive compounder | $167.11 | -11.83% | -19.07% |
| 9 | iShares Core Equity ETF Portfolio (XEQT.TO) | 5 years or more | Global equity, one ticker | $45.29 | +20.83% | -19.06% |
| 10 | Shopify (SHOP.TO) | 7 years or more | Growth, sized small | $178.41 | -9.54% | -83.47% |
Prices and returns are as of the September 11, 2026 close. Total returns are computed from dividend-adjusted closes. Drawdowns are the deepest peak-to-trough decline in total-return terms over the five years to that date.
Holdings 1 to 4: Money You Will Spend Within Two Years
At this range there is one job, and it is not growth. It is that the full amount is present and liquid on the day your offer is accepted. Equity exposure here risks the purchase itself.
1. Global X High Interest Savings ETF (CASH.TO)
What it is. A high-interest savings ETF, which is a fund whose assets sit in interest-bearing deposit accounts rather than in securities. The behaviour follows from that mandate and is visible in the data: the unit price has stayed pinned near $50, the deepest five-year decline was 0.8%, and the return arrives as a monthly distribution rather than as price movement. That is exactly what you want from money that has a job.
The macro. This is a direct play on the Bank of Canada’s policy rate, which has sat at 2.25% since October 30, 2025. A HISA ETF pays roughly the policy rate less a management fee, so its income moves when the Bank moves. Over the last twelve months CASH.TO returned 2.11%. That is well down from the peak-rate years, and it will fall further if the Bank cuts again. Do not project the last three years of income forward.
The trade-off you are accepting. The units are not deposit-insured. CDIC covers eligible deposits held directly; it does not cover ETFs, mutual funds, stocks or bonds, whatever those funds happen to hold. For most balances this is a theoretical risk. For a saver whose entire down payment sits in one fund, it is worth knowing rather than discovering.
Where it belongs. Any FHSA money with a closing date inside two years, and the parking spot for contributions you have not yet allocated.
2. Global X 0-3 Month T-Bill ETF (CBIL.TO)
What it is. A fund holding Government of Canada treasury bills maturing within three months, rolled continuously as they mature. Where a high-interest savings ETF’s return depends on bank deposit rates, this one depends on federal government paper, which is a different credit exposure for a nearly identical return: +2.25% over the last twelve months against CASH.TO’s +2.11%, with a deepest five-year drawdown of 0.06%.
Why it ranks above a second HISA fund. If you are going to hold your entire down payment in one instrument, holding sovereign paper rather than bank deposits removes bank credit from the picture entirely. In ordinary conditions this distinction is worth nothing at all. It costs you nothing either, and the one scenario where it matters is precisely the scenario in which you would care.
The limitation. Its trading history begins in April 2023, so there is no record of how it behaved through a rate-hiking cycle or a credit event. The instrument is simple enough that this matters less than it would elsewhere, but three years is three years and we are not going to dress it up as more.
3. A GIC Ladder
What it is. A guaranteed investment certificate locks a fixed rate for a fixed term. Buy several with staggered maturities and you have a ladder: money coming free at intervals rather than all at once.
Why it ranks this high. It is the only holding on this list that eliminates market risk outright, and it is the cleanest possible match of an asset to a liability. A GIC maturing six weeks before your target closing date does one thing and does it exactly.
The deposit-insurance point that almost nobody makes. CDIC insures eligible deposits up to $100,000 per category per member institution, and deposits held in an FHSA are their own category, counted separately from your TFSA, your RRSP, your RESP and your ordinary savings. Since the FHSA lifetime limit is $40,000, an entire maxed-out FHSA held in GICs at one member institution sits comfortably inside the insured limit, with room for growth on top. That is a genuinely unusual position: full statutory protection on the whole balance.
The catch. Non-redeemable GICs lock your money until maturity, and houses do not appear on schedule. Keep a meaningful slice liquid in one of the cash ETFs above so an early opportunity does not become an early problem. Rates move daily and vary by issuer, so compare at your brokerage rather than trusting any rate printed on a page like this one.
4. Purpose Cash Management Fund (PSA.TO)
What it is. The same instrument class as CASH.TO from a different manager, with a longer operating record: it has been trading since November 2013, which means it has a history through a full rate cycle that CBIL.TO does not. Twelve-month total return of 2.26%, deepest five-year drawdown of 0.04%.
Why hold it at all if you already hold CASH.TO. For most savers, you would not. It ranks here because splitting a large cash balance across two managers is a reasonable thing to do for anyone whose FHSA is near the $40,000 line, and because a second option matters if your brokerage prices one of them badly.
The macro is identical to CASH.TO: it is the policy rate, less fees, and it falls when the Bank of Canada cuts.
Holdings 5 to 7: Three to Five Years Out
With three to five years of runway, the account can carry some equity risk in exchange for a return that beats deposits, provided the structure cushions the drawdowns.
5. Vanguard Conservative ETF Portfolio (VCNS.TO)
What it is. A single ticker holding roughly 40% global equities and 60% global bonds, rebalanced for you. Vanguard reduced the management fee on this fund from 0.22% to 0.17% in 2025.
The case. Twelve-month total return of 7.13%, three-year return of 34.51%, against a deepest five-year drawdown of 15.73%. That drawdown number is the one to sit with. A 40% equity fund still lost roughly a sixth of its value at its worst point in the last five years, and a saver three years out who hit that point at the wrong moment would have needed most of the remaining runway to get back to even.
Where it belongs. The two-to-four-year band, and the first step down the glide path for anyone rolling out of an all-equity position as their date approaches.
6. Vanguard Balanced ETF Portfolio (VBAL.TO)
What it is. The 60/40 version of the same idea: global equities and global bonds in one holding, automatically rebalanced, at a management fee Vanguard cut from 0.22% to 0.17% in 2025. If you want to see what a fee difference of a few tenths of a percent does across a decade, our mutual fund fee calculator will show you on your own numbers.
The case. Twelve-month total return of 11.77% and three-year return of 48.72%, against a deepest five-year drawdown of 16.41%. Note that the extra 20 points of equity bought about 14 points of additional three-year return over VCNS for only about seven-tenths of a percentage point of additional drawdown. Over this particular window, the balanced fund was the better risk-adjusted choice. Over a window that included 2022, when bonds and equities fell together, the comparison would look less flattering to both.
Where it belongs. The three-to-five-year band, and the default holding for an FHSA saver who wants one decision rather than ten.
7. Fortis (FTS.TO)
The macro reason. Fortis is a regulated electric and gas utility operating across Canada, the United States and the Caribbean. Regulated utility revenue is set by rate-setting bodies against an approved rate base, which makes its cash flows about as predictable as equity cash flows get. The growth is mechanical rather than cyclical: Fortis’s own filing sets out a $28.8 billion capital plan for 2026 through 2030, expected to lift midyear rate base from $42.4 billion in 2025 to $57.9 billion by 2030, a compound rate of 7% a year. Capital expenditures were $2.7 billion in the first half of 2026 against a $5.6 billion annual plan, so the plan is being executed rather than announced. The company is directly rate-sensitive in the other direction too: higher interest rates raise its financing costs and make its dividend less competitive against deposits.
What the filings say. Second-quarter 2026 net earnings attributable to common shareholders were $396 million, or $0.78 a share, against $384 million and $0.76 a year earlier. Revenue was $2,931 million against $2,815 million. Year to date, net earnings were $897 million against $883 million. Those figures are from Fortis’s own June 30, 2026 Quarter Report, news release page 1 and Summary of Quarterly Results page 19.
Across full fiscal years the record is a straight line, which is the entire point of owning it:
Revenue over the same five fiscal years ran $9,448 million, $11,043 million, $11,517 million, $11,508 million and $12,170 million. Diluted earnings per share ran $2.61, $2.78, $3.10, $3.24 and $3.40. The dividend has been raised for 52 consecutive years, and the company guides to 4 to 6% annual dividend growth through 2030. The realised rate over the five years charted above is 4.8%, inside its own guidance range, which is a useful thing to be able to check rather than take on trust.
The quarterly pattern is worth seeing too, because it explains a chart that would otherwise look erratic:
The technical picture. Fortis closed at $75.36 on September 11, 2026, below its 50-day average of $78.71 and fractionally below its 200-day of $75.54. Both averages are computed on dividend-adjusted closes, which is the basis the crossover record below uses; on unadjusted prices the same averages are $79.14 and $76.64, so the stock sits below both on either measure. The 50-day remains above the 200-day, so the golden-cross regime that began on May 10, 2024 is intact: that regime has run 586 days, is up 47%, and has made a new all-time high along the way. Price testing the 200-day from above inside an intact uptrend is the ordinary shape of a pullback, not a break, but the level is the level and it is being tested.
The precedent, computed. Across 15 golden crosses in Fortis stock over the past 25 years, the median gain was 1.4% at 30 days, 7.6% at 90 days and 13.6% at 180 days, with the stock higher 87% of the time at the 180-day mark. That is a mild, high-consistency pattern, which is what you would expect from a regulated utility and is precisely why it appears in this band rather than higher up the page. Fifteen observations is a directional read, not a forecast.
Where it belongs, and the honest caveat. The three-to-five-year band, as a single-stock holding for savers who want a dividend compounding alongside their contributions. But look at the drawdown column: Fortis fell 24.01% at its worst point in the last five years, deeper than the balanced fund and deeper than the all-equity fund. Low beta is not the same as low drawdown. If you want this exposure without the single-name risk, our best Canadian dividend stocks page covers the wider field and best Canadian blue chip stocks covers the large-cap defensives.
Holdings 8 to 10: Five Years or More
If you opened an FHSA at 25 with no fixed purchase date, the 15-year window gives equities room to work before you begin stepping down the glide path. This is the only band where a growth tilt is defensible, and it comes with an obligation: you have to actually de-risk as the date approaches.
8. Dollarama (DOL.TO)
The macro reason. Dollarama sells low-priced consumer staples through 1,734 Canadian stores, and its earnings improve when household budgets tighten. For an FHSA saver that is a genuinely useful property: the economic conditions that delay a home purchase are broadly the conditions in which this business performs. It is one of the few names on this list with a negative correlation to your own bad scenario. The offsets are tariff and freight exposure on imported goods, and a currency effect, since merchandise is bought in US dollars and sold in Canadian ones.
What the filings say. In the second quarter of fiscal 2027, sales rose 17.6% to $2,026.6 million from $1,723.8 million, comparable store sales in Canada grew 5.4% against 4.9% a year earlier, and diluted earnings per share reached $1.29 against $1.16. The Australian business contributed $184.8 million from 414 stores and lost $13.8 million, a drag of five cents a share, and the company expects that segment to remain in a net loss position for the full fiscal year. The Canadian store count went from 1,665 to 1,734 over the year. Every figure is from Dollarama’s own second-quarter release, Selected Consolidated and Segmented Financial Information.
The engine behind that line is not price increases. It is stores:
Reported earnings per share went $2.18, $2.76, $3.56, $4.16 and $4.73 across those five fiscal years, and EBITDA margin widened from 29.6% to 33.2%. This is a business that has compounded revenue at 13.8% a year while getting more profitable.
The technical picture, which contradicts the business. The stock closed at $167.11, down 11.83% over twelve months and roughly 19% below its 52-week high, below both its 50-day average of $184.92 and its 200-day of $186.70. A death cross fired on August 31, 2026 and that regime is nine days old as of writing. A strong operating record and a broken chart at the same time usually means a valuation reset rather than a business problem, and the first-quarter numbers above support that reading. It is still a falling chart.
The precedent, and it cuts against the obvious conclusion. Dollarama has recorded seven completed death-cross regimes in its listed history. The median gain was 2.2% at 30 days, 6.1% at 90 days and 13.6% at 180 days (six observations at the 180-day mark), with the stock higher 57% of the time at 30 days and 71% at 90 days. In other words, death crosses in this particular name have not been reliable sell signals; the median outcome has been positive at every horizon measured. We report that because it is what the record says, not because it is comforting. Seven events is a small sample, the confidence interval around any of those medians is wide, and none of it constitutes a forecast.
Where it belongs. The five-year-plus band, sized as one position among several rather than as the account. For the wider field of Canadian large caps, see our best Canadian stocks to buy and hold.
9. iShares Core Equity ETF Portfolio (XEQT.TO)
What it is. A 100% global equity portfolio in a single ticker, spanning thousands of companies across Canadian, US, international developed and emerging markets. BlackRock’s own product page puts the management fee at 0.17% and the MER at 0.19%, after a fee reduction from 0.18% effective December 18, 2025.
The case. A twelve-month total return of 20.83% and a three-year return of 79.78% is what maximum diversified equity exposure produced over a strong stretch for global markets. Its deepest five-year drawdown of 19.06% is what it cost to sit through. Notably, that is barely deeper than the 60/40 fund’s 16.41%, which is a reminder that in the specific drawdown of the last five years, bonds did less cushioning than their reputation implies.
The FHSA-specific caveat. A global equity fund holds a large US weight, and the CRA notes that foreign dividend income paid into an FHSA can face withholding tax that an RRSP would avoid. The effect on a broad fund yielding under 2% is small, measured in a few basis points a year, but it is real and it is one of the few genuine arguments for holding your most US-heavy positions in an RRSP instead.
Where it belongs. The five-year-plus band, and it is the single best default for that band. If you want to understand why time horizon changes the answer this much, our guide to compounding makes the arithmetic concrete. For the wider ETF field, see best Canadian ETFs.
10. Shopify (SHOP.TO)
The positive case first, because it is the strongest growth story in the country. Shopify is compounding revenue above 30% at a scale where that should be arithmetically difficult. Revenue across the last five fiscal years ran US$4,611.9 million, US$5,600 million, US$7,060 million, US$8,880 million and US$11,556 million: two and a half times larger in four years.
The second quarter of 2026 kept that pace: revenue of US$3,583 million, up 34% year over year and 33% in constant currency, gross merchandise volume of US$115.6 billion, up 31.6%, monthly recurring revenue of US$221 million and gross profit of US$1,708 million. Those figures come from Shopify’s own second-quarter release. Gross profit across the five fiscal years above went from US$2,481 million to US$5,555 million, so the growth is not being bought at the expense of unit economics.
The macro reason. It is levered to global e-commerce penetration and to small-business formation, with an expanding take rate as merchants adopt payments, capital and logistics. It is also levered to discretionary consumer spending, so it is pro-cyclical in a way the rest of this list is not.
The technical picture. The stock closed at $178.41, below its 50-day average of $188.93 and marginally below its 200-day of $181.19. A golden cross fired on August 28, 2026, and price is 16.0% below where that signal triggered nine days later. That decline is not company-specific: it came alongside a broader unwind in Canadian software, which we covered in Canadian tech stocks and the software selloff.
The precedent, and why this instance is already unusual. Shopify has recorded six completed golden-cross regimes. The median gain was 23.5% at 30 days, 65.2% at 90 days and 44.2% at 180 days, and the stock was higher at 30 days in six of six, with the weakest of those six still up 15.6%. The current regime is down 16.0% at nine days, which puts it outside the entire historical range at this stage. Six observations is a very small base, the sample covers a single decade of one company’s life, and the correct reading is simply that this crossover is not following the prior template rather than that a template exists.
How it fits an FHSA. Look at the last column of the ranking table: an 83.47% deepest drawdown over five years. That number is not a criticism of the company, and the operating record above is the counter-argument to reading it as one. It is a statement about what this security does to an account with a date attached. A saver who put a down payment into Shopify in late 2021 did not have a down payment in 2022. So this holding earns its tenth place not on quality but on runway: it needs seven years or more, and it should be sized so that a decline of that order delays nothing. The account where this conviction belongs undiluted is the TFSA, where the gains are sheltered forever and no deadline forces a sale, and it is our number one pick on the best TFSA stocks page for exactly that reason.
Ready to put one of these to work? Open a self-directed FHSA at Questrade and you can hold any holding on this list, from the cash tier to the growth tier, inside the same account and move between them as your date approaches.
The Glide Path: Moving Down the List as Your Date Approaches
These bands are not three separate strategies. They are one portfolio that changes shape, and the change should happen on a schedule rather than on a feeling.
| Years to purchase | Cash tier (1 to 4) | Balanced tier (5 to 6) | Growth tier (7 to 10) |
|---|---|---|---|
| Under 1 year | 100% | 0% | 0% |
| 1 to 2 years | 85% | 15% | 0% |
| 2 to 3 years | 60% | 40% | 0% |
| 3 to 5 years | 30% | 60% | 10% |
| 5 to 8 years | 10% | 50% | 40% |
| 8 years or more | 5% | 25% | 70% |
Two rules make this work. Move on the calendar, not on the market: pick a month each year to step down and do it regardless of whether equities are up or down, because the alternative is deciding to de-risk after the decline you were de-risking against. And treat the step-down as non-negotiable once you have a signed offer, at which point the answer is 100% cash regardless of what the chart says.
An FHSA has one more feature that makes this easier than it sounds: because income earned inside the account does not consume participation room, rebalancing between these tiers has no contribution-room consequence at all. You can move the whole balance from XEQT to CASH the week you start house-hunting and it costs you nothing but the spread.
What We Left Off, and Why
Canadian bank stocks. Royal Bank and its peers are quality holdings and they appear on our best Canadian bank stocks page with the full case. They are not on this list because the single-stock sleeve in a deadline-bound account should be small, and the two slots available went to a regulated utility and a defensive retailer whose earnings are less tied to the credit cycle. There is also a correlation point worth thinking about: bank earnings track Canadian housing and credit closely, so a bank-heavy FHSA ties your down payment to the same economy as the house you are trying to buy.
US-listed ETFs and high-yield US dividend payers. The CRA’s withholding-tax point above makes the FHSA the wrong wrapper for these. Hold them in an RRSP, where the treaty protection applies, and see our best RRSP stocks page for that side of the plan.
Penny stocks and small caps. Not because they are bad, but because the failure mode is permanent rather than temporary and there is no time to recover from it. If that is the part of the market you want exposure to, do it with money that has no deadline, and read our Canadian penny stocks page first.
Anything with a lock-up longer than your timeline, including non-redeemable GICs maturing after your target date. This is the most common self-inflicted FHSA mistake we see.
FHSA Against TFSA and RRSP: Which Account Does Which Job
All three are tax-sheltered, and they are not substitutes.
- FHSA: the down payment account. A deduction on the way in and tax-free growth on the way out for a qualifying first-home purchase, with no repayment ever. If you are eligible and expect to buy, fill this one first.
- TFSA: the growth account. No deduction going in, but every dollar of gain is sheltered permanently and there is no deadline forcing a sale, which makes it the right home for your highest-upside positions. Rules in our TFSA guide, and your room in the TFSA contribution room calculator.
- RRSP: the retirement compounder. A decades-long horizon and the only one of the three where US dividends escape withholding tax. Rules in our RRSP guide, and the RRSP tax refund calculator shows what a deduction is worth at your marginal rate, which is the same arithmetic that applies to an FHSA contribution.
The FHSA and the RRSP also stack rather than compete. You can pair a qualifying FHSA withdrawal with a Home Buyers’ Plan withdrawal on the same purchase, provided you satisfy each program’s conditions. The FHSA withdrawal is never repaid; the HBP withdrawal is repaid on a schedule. Our Home Buyers’ Plan guide covers the repayment mechanics, which are where that program gets people into trouble.
If you are saving for a child’s education alongside a first home, the same horizon logic drives that account too, and we have applied it in best RESP investments by your child’s age.
If You Never Buy a Home
Nothing bad happens, and this is the FHSA’s underrated feature. You can transfer the entire balance, growth included, directly to an RRSP or RRIF with no immediate tax consequence and without using any RRSP deduction room, using Form RC721. In the worst case the account behaves like $40,000 of bonus RRSP room, which is why the tax-deduction argument for opening one is strong even if your plans are uncertain.
The deadline is real, though. The account must be closed by December 31 of the year in which the earliest of these occurs: the 15th anniversary of opening your first FHSA, the year you turn 71, or the year following your first qualifying withdrawal. Money still sitting in the account after that is taxed as income at fair market value. The CRA sets out the mechanics on its page on closing your FHSAs.
Frequently Asked Questions
What should I invest my FHSA in? Match the holding to the number of years before you buy. Inside two years, hold cash instruments: a high-interest savings ETF such as CASH.TO, a T-bill ETF such as CBIL.TO, or a GIC maturing before your target date. Three to five years out, a balanced fund such as VCNS.TO or VBAL.TO, optionally with a defensive single stock such as Fortis. Five years or more, a global equity fund such as XEQT.TO, with individual growth names sized small. The ranking on this page sets out all ten with the data behind each.
Can you buy stocks in an FHSA? Yes. Most securities listed on a designated stock exchange are qualified investments in an FHSA, alongside cash, mutual funds, GICs and Canada and provincial savings bonds. Your issuer may narrow that list by internal policy, and you need a self-directed or trusteed FHSA rather than a depositary one to hold them at all.
What is the best way to invest an FHSA? The best available evidence says start by matching your holdings to your purchase date rather than hunting for returns. Since the FHSA launched in April 2023, new house prices in Canada have fallen 3.4% while a high-interest savings ETF returned 12.3%, so FHSA savers holding nothing riskier than cash gained ground against their target. Equities returned considerably more over that stretch, but only a saver with years of runway could afford the drawdown that came with them.
What is the FHSA contribution limit? Participation room is $8,000 in the year you open your first FHSA. Unused room carries forward only after an account is open, so the most room you can have in a single year is $16,000. The lifetime limit is $40,000, shared across contributions and RRSP-to-FHSA transfers and across every FHSA you hold. Your exact figure is in CRA My Account and on your notice of assessment.
How much do Canadians actually have in their FHSAs? Less than most people assume. The CRA’s most recent published statistics, dated December 31, 2023, covered 739,000 individuals who had opened an FHSA, holding $2.79 billion between them, for an average balance of $3,899. At balances of that size, fees and account type move the outcome more than security selection does.
Are FHSA investments protected if my bank fails? Deposits are, within limits. CDIC insures eligible deposits, including GICs and other term deposits, up to $100,000 per category per member institution, and FHSA deposits form their own category separate from your TFSA, RRSP and RESP deposits. ETFs, mutual funds, stocks and bonds are not deposits and are not CDIC-insured, whatever they hold internally.
Should I hold US stocks or US ETFs in my FHSA? As a rule, prefer your RRSP for those. The CRA notes that foreign dividend income paid into an FHSA can be subject to foreign withholding tax, and the FHSA does not carry the treaty protection that shields an RRSP from US withholding. The drag on a broadly diversified fund is small, so this is a tiebreaker rather than a prohibition, but on a high-yield US position it is a real cost.
Can I use the FHSA and the Home Buyers’ Plan together? Yes. You can make a qualifying FHSA withdrawal and an RRSP Home Buyers’ Plan withdrawal for the same purchase, provided you meet each program’s conditions. The FHSA withdrawal is never repaid. The HBP withdrawal must be repaid on schedule.
What happens to my FHSA if I never buy a home? You can transfer the full balance, growth included, directly to an RRSP or RRIF with no immediate tax consequence and without using any RRSP contribution room. The account must be wound up by December 31 of the year of the earliest of the 15th anniversary of opening, the year you turn 71, or the year after your first qualifying withdrawal.
Is the FHSA better than the TFSA for a down payment? For an eligible first-time buyer, yes. Both give tax-free growth, but only the FHSA also gives a deduction on the way in. The TFSA stays the better account for money that is not earmarked for a home and for your highest-growth positions, since FHSA room is capped at $40,000 for life.
Disclaimer: The content on bestcanadianstocks.ca is for informational and entertainment purposes only and does not constitute financial advice. Past performance is not indicative of future results. Always consult a qualified financial advisor before making investment decisions. Share prices, total returns, drawdowns and moving averages are computed from Yahoo Finance dividend-adjusted closes and reflect the September 11, 2026 close. Every company financial figure comes from that company’s own filing, named in the text. FHSA rules and statistics are from the Canada Revenue Agency at canada.ca. House price data is Statistics Canada table 18-10-0205.