First-home savings accounts are an excellent way to save a down payment for a first home because they offer a tax deduction for contributions and tax-free compounding and withdrawals. The catch with FHSAs is that they can stay open for 15 years at the most, which is less time than you’ll likely spend with tax-free savings accounts, registered retirement plans and registered education savings plans.
My first thought is a question: What’s the grandson’s timeline for buying? GICs can be bought with terms of one through five years for the most part, but you get the best rates when you lock in your money. If there’s a chance of buying a home before a GIC matures, use something else.. Other conservative investments for an FHSA include high interest savings account exchange-traded funds, which keep money in big bank savings accounts, and T-bill or money market ETFs. These latter two types of ETFs hold assets in short-term government and corporate borrowings, which offers a high degree of safety. Yields are in the 4.6 to 4.8 per cent range now, with declines expected as the Bank of Canada lowers the overnight rate.