Interactive Brokers launches tax-efficient FHSA in Canada

Published 22/04/2025, 15:06
Interactive Brokers launches tax-efficient FHSA in Canada

GREENWICH, Conn. - Interactive Brokers Group, Inc. (NASDAQ:IBKR), a global electronic brokerage firm with a market capitalization of $66.5 billion and an impressive 90.6% gross profit margin, has introduced a new savings account aimed at assisting Canadians with the financial goal of purchasing their first home. According to InvestingPro data, the company maintains a "GREAT" financial health score, positioning it well to expand its product offerings. The First Home Savings Account (FHSA) is now available to eligible Canadian residents and offers a tax-advantaged method to save for homeownership.

The FHSA is a government-registered savings vehicle that allows for tax-deductible contributions, with the added benefit of capital gains and interest income being non-taxable. The account supports investment in a variety of tradable instruments, including US and Canadian stocks, options, and US bonds, through Interactive Brokers Canada’s trading platforms.

Interactive Brokers has set high contribution limits for the FHSA, allowing individuals to deposit up to CAD 8,000 annually, with a maximum of CAD 40,000 over their lifetime. Should the funds not be utilized for a home purchase within 15 years, account holders have the option to transfer their savings tax-free into a Registered Retirement Savings Plan (RRSP), thus continuing their tax-deferred growth.

Steve Sanders, EVP of Marketing and Product Development at Interactive Brokers, stated, "Buying a home is one of the biggest financial milestones, and we’re pleased to offer a savings solution that helps Canadians reach this goal." He emphasized the FHSA’s features, such as tax-free investment growth and access to global markets, as ways to maximize savings potential for prospective homeowners.

The FHSA is available to first-time home buyers or those who have not owned property in the previous four years. Interactive Brokers Canada promises a straightforward process for opening an FHSA, coupled with low commissions and no additional platform fees.

This initiative aligns with Interactive Brokers Group’s longstanding commitment to providing sophisticated trading technology and a wide array of investment products at competitive prices. The firm, which has maintained dividend payments for 16 consecutive years and achieved 18.2% revenue growth in the last twelve months, has continuously received industry recognition for its services and technology, serving a diverse clientele that includes individual investors, hedge funds, and financial advisors. For detailed insights into IBKR’s performance metrics and growth potential, InvestingPro subscribers can access comprehensive analysis and additional ProTips in the Pro Research Report, available exclusively on the platform.

The information regarding the launch of the FHSA by Interactive Brokers is based on a press release statement. For more details on individual accounts, including the FHSA, Canadian residents can visit the Interactive Brokers Canada website. Investors seeking deeper analysis of IBKR’s financial performance and market position can access the comprehensive Pro Research Report, along with over 10 additional ProTips and extensive financial metrics, through InvestingPro.

In other recent news, Interactive Brokers Group reported its first-quarter 2025 earnings, with an earnings per share (EPS) of $1.88, slightly exceeding the forecast of $1.87. The company also surpassed revenue expectations, reporting $1.43 billion against an anticipated $1.38 billion. Despite these positive results, Piper Sandler adjusted its outlook by reducing the price target from $192 to $182, maintaining an Overweight rating. This adjustment was influenced by higher compensation expenses and lower net interest income. Meanwhile, BofA Securities also revised its price target for Interactive Brokers to $243 from $265, keeping a Buy rating, due to concerns over the impact of tariff disputes on international demand for US assets. Interactive Brokers demonstrated strong performance with record net revenues and pretax income, alongside a 36% increase in commissions. The company announced a 4-for-1 stock split and a dividend increase from $1 to $1.28, reflecting confidence in its business model. Despite a 12% decrease in margin loans in April, Interactive Brokers continues to see robust demand from international clients.

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