The RBC Bank stated that it has seen tremendous demand for the First Home Savings Account (FHSA), with Canadians opening tens of thousands of these savings accounts since the program's rules came into effect on April 1.

The FHSA is a new program that allows potential home buyers to start saving and investing for a tax-exempt down payment.

For her part, Flora Do, Vice President of Investment and Client Sectors at RBC, said that the bank has witnessed remarkable interest in this new tax-exempt account, especially among younger Canadians who are building a down payment for their first home.

RBC did not specify exactly how many accounts have been opened so far, but it states that 26% of FHSA holders have contributed the full or most of the annual maximum amount of $8,000, with a similar percentage making regular pre-authorized contributions.

The bank added that clients aged 25 to 34 account for the largest percentage of FHSA holders at 56%, followed by those aged 35 to 44 at 20%, then those aged 18 to 24 at 18%, and clients aged 45 and older at 6%.

It is noteworthy that with the FHSA, account holders can start saving for up to 15 years, with an annual deposit limit of $8,000 starting from the year the account is opened, and a contribution limit of $40,000.

This account features the ability to claim deposits as a deduction from taxable income, and investments grow in the account and can be withdrawn tax-free if used for the down payment. Additionally, unused portions of the annual contribution can be carried over to the next year, and unused tax-exempt savings can be transferred to an RRSP or Registered Retirement Income Fund.