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Toronto-headquartered Scotiabank has launched a tax-free First Home Savings Account (FHSA) designed to help Canadians purchase their first home.

According to Scotiabank, the FHSA enables lets first-time homebuyers contribute up to $8,000 each year, with a maximum lifetime contribution of $40,000. Scotiabank is offering an interest rate of 5.00% on new FHSA deposits with the Savings Accelerator Account from now until Jan. 31, 2024.

Also with the product, spouses can each have an FHSA account and double their combined maximum contribution, and the FHSA can be used alongside $35,000 from the Registered Retirement Savings Plan Home Buyers’ Plan.

“We know home affordability is a big issue on the minds of Canadians. The FHSA unlocks tremendous value and flexibility for those looking to save for a down payment toward their first home,” said Kingsley Chak, senior vice president of retail deposits, savings, and investments. “Customers are encouraged to work with a Scotiabank Financial Advisor to determine what investment option best aligns with their personal situation and goals, and to leverage tools such as Scotia Smart Investor via Advice+ to help set, track and manage their financial goals.”