First home savings account: Banks say they’re not ready for an April 1 launch

The first home savings account, a cornerstone of the federal Liberals' 2022 budget, will not be ready when it goes into effect on April 1.

A new savings vehicle for Canadians saving towards their first home purchase will technically be available starting April 1, but financial institutions who spoke to Global News say they won’t be ready to offer the account on that date and Ottawa offered no timeline for when deposits might start flowing.

The Tax-Free First Home Savings Account (FHSA), a cornerstone of the federal government’s 2022 budget, officially comes into effect at the start of next month under legislation passed earlier this year.

The account will allow Canadians to make contributions of up to $8,000 per year to a maximum of $40,000 across their lifetime to save towards the purchase of a first home. Contributions to the account will be deductible against income, and any amounts as well as interest earned on investments within the account will also be tax-free upon withdrawal.

Global News reached out to Canada’s big six banks as well as online financial institutions and some credit unions to hear about their plans for rolling out the savings account.

Institutions that spoke to Global News last week said that while they were keen to offer the FHSA, none could confirm they would be ready in time for April 1.

Royal Bank of Canada said it was looking to offer the FHSA sometime in the spring; others, including TD Bank, CIBC and BMO, pegged the launch for sometime in the 2023 tax year. Scotiabank said it hopes to offer the account “soon.”

“We’re working to make the FHSA available to our clients as quickly as possible after the legislation comes into effect on April 1,” read a statement from National Bank of Canada.

“We’re making every effort to obtain the government authorizations required so we can offer this new plan, while carrying out the necessary technological development.”