The First-Home Savings Account (FHSA) is the newest member of the Canadian registered, tax-sheltered-account family. It helps Canadians grow their savings in a tax-free or tax-deferred environment. It’s different from the more well-known, all-purpose Tax-Free Savings Account (TFSA) and closer to the Retirement Savings Plan (RRSP) in the sense that it allows for tax-deferred investment growth for a specific purpose, the purchase of your first home.
So, what should you place in your FHSA? Cash savings alone may not be enough, and even if they are, the time it would take to reach your desired number would be significant. You can radically reduce that number by parking those savings in the right stocks and keeping them in the FHSA.
A financial stock
If you don’t mind an unconventional bank stock, goeasy (TSX: GSY) can be an amazing pick. It experienced powerful growth in the last decade, and despite a brutal correction that the stock is currently recovering from undid much of the growth, the numbers are still impressive. But a good reason to consider it for your FHSA right now is that the stock is currently quite bullish and modestly valued, a good combination.
If it’s the beginning of a long-term growth phase, the stock can help you boost your home savings to a significant level in a matter of years. At its current pace, the stock looks poised to double your capital in less than two years.
The company also pays dividends, but since the capital is unlikely to be a large sum in this scenario, the dividends may not be substantial enough to make a difference, especially in the short term.
A real estate service company
FirstService (TSX: FSV) is a North American leader in property management with a massive portfolio and a leader in several real estate services. This gives it a strong edge from a business model and presence perspective. It’s also a powerful growth stock that is currently recovering from a deep slump.
The stock lost about 40% of its valuation between Dec. 2021 and June 2022. However, during its recovery, it has already risen by about 38% since mid-June 2022, and despite this slump, its five-year returns have been quite amazing — almost 86%. Now that it is growing at its pre-pandemic pace, the stock may be well positioned to double your capital in fewer than three years.
A logistics company
TFI International (TSX: TFII) is currently one of the largest trucking companies in Canada with a massive fleet, but that’s not a comprehensive enough descriptor of the company. It’s also rapidly growing its network of operating companies and facilities, augmenting its already impressive reach in North America.
It’s also an exceptional growth stock — one of the few that hasn’t yet experienced a sizable correction in the post-pandemic market. It has grown about 278% in the last five years, and if it can replicate this feat again, you can grow your capital by over 2.7-fold in just five years. The modest valuation may also help the stock sustain its growth.
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Foolish takeaway
Even though just one of the three is a large-cap stock, all three represent companies that are leaders and strong players in their respective industries and markets. They have strong growth histories and are currently enjoying a solid bull run.
Riding this bullish momentum in your FHSA can give a significant boost to the sum you have set aside for buying a home, and you may be able to make a purchase years ahead of schedule.
