An FHSA follows the same qualified investment rules as a TFSA and RRSP. You can hold stocks, ETFs, bonds, GICs, mutual funds, and cash — but not real estate directly, cryptocurrency, or most private company shares. What matters most is choosing the right type of investment for your purchase timeline.
For the account rules around those choices, read this with the main FHSA guide, the provider comparison in best FHSA accounts, the time-horizon modelling in FHSA calculator, and the allocation-order decision in FHSA vs TFSA vs RRSP. If your plans change, the next page to compare is what happens to your FHSA if you never buy a home.
Eligible investments
| Investment Type | Examples | Notes |
|---|---|---|
| Canadian stocks | BCE, Royal Bank, Shopify (TSX) | Eligible if listed on a designated exchange |
| US and international stocks | Apple, Tesla (NYSE/NASDAQ) | Eligible; US dividends may face 15% withholding |
| Canadian-listed ETFs | XEQT, VEQT, XIC, ZAG | Most popular growth and balanced ETFs |
| US-listed ETFs | VTI, VOO, BND | Eligible; US dividend withholding may apply |
| Bonds (government and corporate) | Federal, provincial, investment-grade corporate | Eligible |
| Bond ETFs | ZAG, XBB, VAB | Eligible |
| GICs | From chartered banks and credit unions | Must be from an eligible institution |
| Mutual funds | Most Canadian mutual funds | Check with institution |
| High-interest savings accounts (HISA) | EQ Bank, Oaken, Simplii | Offered as specific FHSA-registered products |
| Money market funds | Available through brokerages | Eligible |
| Bitcoin ETFs (Canadian exchange) | BTCC.B, FBTC (TSX-listed) | Eligible because they trade on TSX |
Non-eligible investments
| Investment Type | Examples | Why Not Eligible |
|---|---|---|
| Cryptocurrency (direct) | Bitcoin, Ethereum, Solana | Not listed on designated exchanges |
| Real estate (direct) | Rental property, REITs via private structures | Property itself is not a qualified investment |
| Private company shares | Most startups and private holdings | Not listed on a designated exchange |
| Gold or silver bullion (direct) | Physical gold bars or coins | Not a qualified investment |
| Commodity futures contracts | Directly held futures | Not qualified |
| Leveraged or inverse ETFs | HXDM.U, some inverse products | Technically eligible (exchange-listed) but high-risk; confirm with institution |
| Foreign accounts or investments | International accounts | FHSA must be held at a Canadian institution |
Penalty for holding non-qualified investments: The fair market value is included as income in the year it was acquired, plus a 50% tax on income or gains while held. Remove disqualified assets promptly.
Strategy by purchase timeline
The FHSA exists to buy a home. Choose investments that match when you expect to buy.
| Years to Purchase | Risk Tolerance | Suggested Approach |
|---|---|---|
| 1 year or less | Very low | HISA, 1-year GIC ladder |
| 1–2 years | Low | 1–2 year GICs, short-term bond ETF (e.g., ZMMK) |
| 2–4 years | Low-moderate | 60% bonds / 40% equities, or balanced ETF (e.g., XBAL) |
| 4–7 years | Moderate | All-equity ETF (e.g., XEQT, VEQT) |
| 7+ years | Moderate-high | All-equity ETF with growth focus (e.g., XEQT) |
Important: Unlike a TFSA, you cannot re-contribute if you withdraw from an FHSA for a home purchase. Your contribution room disappears permanently on withdrawal. A loss close to purchase time sets back your entire down payment — do not take on unnecessary risk in the final 1–2 years.
Worked example: building toward a home purchase
Scenario: Patricia opens her FHSA in January 2026 at age 27. She plans to buy a home in 7–8 years. She contributes $8,000 per year.
Year 1–5: growth phase
| Year | Contribution | Balance (7% annual growth) | Investment |
|---|---|---|---|
| 2026 | $8,000 | $8,560 | XEQT |
| 2027 | $8,000 | $17,759 | XEQT |
| 2028 | $8,000 | $27,602 | XEQT |
| 2029 | $8,000 | $38,134 | XEQT |
| 2030 | $8,000 | $49,403 | XEQT |
Year 6–7: shift to capital preservation
| Year | Contribution | Balance | Investment |
|---|---|---|---|
| 2031 | $0 (lifetime max reached) | — | Shift to 60/40 balanced |
| 2032 | — | Target withdrawal year | GICs and HISA for final year |
Patricia’s $40,000 in contributions could grow to approximately $47,000–$52,000 over 7 years in an all-equity ETF, depending on market returns.
FHSA vs TFSA vs RRSP: what to hold where
Each account has different rules around withdrawals and tax treatment that affect which investments make the most sense inside each one.
| Account | Best Investments | Why |
|---|---|---|
| FHSA | Growth ETFs (long timeline) or GICs/HISA (short timeline) | Tax-free growth; must be used for home — match to timeline |
| TFSA | Growth ETFs, US stocks | Tax-free growth; flexible withdrawal, so can take on long-term risk |
| RRSP | Foreign equities (esp. US) | US dividends exempt from 15% withholding under Canada-US tax treaty in RRSP; not in FHSA or TFSA |
Note on US dividends: In an RRSP, the Canada-US tax treaty waives the 15% US withholding on dividends. This treaty protection does not apply to FHSA or TFSA. If you hold US dividend-paying stocks in your FHSA, 15% withholding still applies even though the withdrawal is tax-free in Canada. For this reason, holding growth-focused (not dividend-focused) US ETFs or dividend-free Canadian assets in an FHSA is slightly more efficient.
Top ETF options for an FHSA
Long timeline (5+ years to purchase)
| ETF | MER | What It Holds |
|---|---|---|
| XEQT (iShares Core Equity) | 0.20% | 100% global equity; ~45% Canada, ~30% US, ~25% Intl |
| VEQT (Vanguard All-Equity) | 0.24% | 100% global equity; ~30% Canada, ~40% US, ~30% Intl |
| ZEQT (BMO All-Equity) | 0.20% | 100% global equity; similar to XEQT |
Moderate timeline (3–5 years)
| ETF | Allocation | MER |
|---|---|---|
| XBAL (iShares Balanced) | 60% equity / 40% bond | 0.20% |
| VBAL (Vanguard Balanced) | 60% equity / 40% bond | 0.25% |
| ZBAL (BMO Balanced) | 60% equity / 40% bond | 0.20% |
Short timeline (1–2 years)
| Option | Typical Rate | Notes |
|---|---|---|
| 1-year GIC (e.g., EQ Bank, Oaken) | 3.5–5.0% | Locked; buy to mature before purchase |
| HISA (registered inside FHSA) | 3.0–4.5% | Flexible, slightly lower rate |
| ZMMK (BMO Money Market ETF) | ~overnight rate | Liquid, very low volatility |
Opening at a discount brokerage vs bank
| Provider Type | Options Available | Commission |
|---|---|---|
| Discount brokerage (Questrade, Wealthsimple Trade) | Full range of ETFs, stocks, GICs | $0–$4.95/trade (varies) |
| Robo-advisor (Wealthsimple Invest, Questwealth) | Automatic rebalanced ETF portfolios | 0.25–0.50% annual fee |
| Big bank branch | Often limited to bank’s own mutual funds | Typically no commissions; higher MER on funds |
For most investors, a discount brokerage holding a simple one-ticket ETF (XEQT or VEQT) is the lowest-cost, highest-diversification approach.